DEFINITION of 'Mortgage Putback'

The forced repurchase of a mortgage by an originator from the entity currently holding the mortgage security. A mortgage putback is most commonly required due to findings of fraudulent or faulty origination documents in which the creditworthiness of the mortgagor or appraised value of the property are misrepresented.

BREAKING DOWN 'Mortgage Putback'

Following the collapse of the American real estate market in 2008 and the subsequent financial crises that followed, it was found that mortgages and mortgage-backed securities had been widely dispersed throughout the financial system and that the validity of many mortgages and documents were questionable with regards to lending standards, income verification and appraisal values. Many mortgage security holders demanded mortgage putbacks by mortgage originators who had not completed their due diligence, or in some cases had blatantly defrauded the industry.

RELATED TERMS
  1. Mortgage Originator

    A mortgage originator is an institution or individual that works ...
  2. Second Mortgage

    A type of subordinate mortgage made while an original mortgage ...
  3. Primary Mortgage Market

    The market where borrowers and mortgage originators come together ...
  4. Mortgage Banker

    A company, individual or institution that originates mortgages. ...
  5. Best Efforts Mortgage Lock

    When the sale of a mortgage in the secondary mortgage market ...
  6. Mortgage

    A debt instrument, secured by the collateral of specified real ...
Related Articles
  1. Personal Finance

    Shopping for a Mortgage in 2017? Use This Tool First

    As home-buying technology has progressed, the process of finding the best mortgages rates for 2017 can all be done online.
  2. Personal Finance

    Finding the Best Mortgage Rates in 2017

    As home-buying technology has progressed, the process of finding the best mortgages rates can all be done online. Here's how:
  3. Investing

    Today's Current Mortgage Rates: May 21, 2017

    Find the current day's mortgage rates offered by Investopedia Partners and learn more about what may impact rates in the upcoming weeks.
  4. Personal Finance

    5 Reasons To Save For A Big Mortgage Down Payment

    You may be anxious to buy a home, but taking time to save a large down payment has numerous advantages.
  5. Personal Finance

    Mortgage Company

    A company engaged in the business of originating and/or funding mortgages for residential or commercial property.
  6. Personal Finance

    7 Mortgage Trends To Expect In 2011

    How will the year compare to 2010? What's likely to be different?
  7. Personal Finance

    Comparing Reverse Mortgages vs. Forward Mortgages

    Which one a homeowner chooses depends on where you are at this point in your life, personally and financially.
  8. Small Business

    The Rise And Demise Of New Century Financial

    A case study in how poor planning toppled a subprime mortgage giant.
  9. Personal Finance

    Benefits Of Paying Off Your Mortgage

    Paying off your mortgage in a reasonable amount of time can result in financial security and freedom.
  10. Insurance

    How to Outsmart Private Mortgage Insurance

    It's possible to use a second mortgage to avoid this fee, but is it in your best interest?
RELATED FAQS
  1. If My Mortgage Lender Goes Bankrupt, Do I Still Have to Pay My Mortgage?

    Yes, if your mortgage lender goes bankrupt you do still need to pay your mortgage obligation. Here's what usually happens ... Read Answer >>
Trading Center