The newly announced $25 billion settlement over foreclosure servicing practices is not expected to have much impact on MBS investors because most of the principal reductions that the five banks agreed to make will involve unsecuritized mortgages they hold in portfolio. The settlement involves all states except Oklahoma, two federal agencies and five major servicers, and requires the banks to “work off up to $17 billion in principal reduction and other forms of loan modification relief nationwide,” according to a summary of the agreement. Although the actual settlement had not been released as...