Rebutted by Nick Timiraos:
U.S. banks hold a much higher rate of defaulted mortgages on their books than do mortgage giants Fannie Mae and Freddie Mac, according to a report issued Wednesday by the Office of the Comptroller of the Currency, which regulates national banks. The report said 19.7% of mortgages in banks' portfolios were delinquent at the end of March. By contrast, nearly 6.8% of mortgages backed by Fannie and Freddie were nonperforming, as were 11.4% of all mortgages.... While many subprime and other risky mortgages were packaged into securities and sold to investors, banks chose to keep certain loans or were stuck with them after securitization markets froze in 2007. Loans on bank balance sheets "in and of themselves are reflective of lesser-quality loans" than those backed by Fannie, Freddie or federal agencies, said Bruce Krueger, a senior OCC mortgage examiner...
