The news continues to get bad for big banks and, potentially, worse for hopeful borrowers. The Wall Street Journal is reporting that J.P. Morgan Chase (JPM) and Bank of America Corp. (BAC) look to be the hardest hit when Fannie Mae and Freddie Mac ask for payback of up to $300 billion in bad mortgages.

After requiring lenders to buy back an estimated $7 billion of combined loans in the first nine months of 2009, Fannie Mae and Freddie Mac are looking for more payback.

The two finance companies are under increased scrutiny after receiving more than $100 billion in bailout funds and being taken over by the government in September 2008.

As 2010 begins, both Fannie Mae and Freddie Mac are seeing substantial increases in the percentages of borrowers who were at least 90 days behind as of November. For Fannie, the 5.9% of borrowers was up from 2.13% a year earlier.

For Freddie, the news was the same with 90-day plus delinquencies reaching 3.87% up from 1.72% a year earlier.

This is causing their auditors to comb through mortgage documents to look for borrowers whose loans have been found to contain improper income documentation or outright lies.

“Because taxpayers are involved, we’re being very vigilant,” said Maria Brewster, who oversees Fannie’s repurchase team. “No taxpayer should have to pay for a business decision that caused a bad loan to be sold to Fannie Mae.”

Fannie and Freddie are looking to force J.P. Morgan Chase, Bank of America Corp., and other mortgage lenders to buyback about $300 billion in loans.

In the first nine months of 2009, Bank of America repurchased nearly $4.5 billion of loans. That was triple the $1.5 billion they purchased in all of 2008. Some of the bad mortgages were made by Countrywide Financial., which the bank acquired in 2008.

For J.P. Morgan, total buybacks totaled $5.3 billion in 2009, up from $4 billion in 2008. This included some of the loans that came with the purchase of the failed banking operations of Washington Mutual Inc.

When asked about the outlook on buybacks, Chief Financial Officer Michael Cavanaugh said, “It’s early on that score.” A bank spokesman declined further comment for the Journal article.

J.P. Morgan and Bank of America don’t disclose how many loans they repurchased from Fannie and Freddie.

Strong-arming lenders to swallow loans that were guaranteed by Fannie Mae and Freddie Mac helps cushion the mortgage-finance companies from defaults. However, repurchases represent a sliver of all defaulted loans.

Keefe, Bruyette & Woods analysts warned this week that repurchases would “contribute to further weakness in mortgage banking profitability in 2010, which is difficult for an industry that will already have to cope with materially lower production volume.

As a result, lenders are being much more careful, and tightening standards for new loans.

“If you’re being hit with a lot of repurchases very suddenly, the easiest thing to do is to tighten your standards rapidly,” said Glenn Boyd, a Barclays analyst.