The long-anticipated settlement among mortgage servicers, state attorneys general and federal agencies will be a positive for the housing market but have a modest impact on non-agency MBS, according to Moody’s Investors Service. The deal provides $10 billion for principal reduction loan modifications, and coupled with an expansion of the Home Affordable Modification Program, should help up to 1 million homeowners avoid foreclosure, Moody’s said. That may be a relatively small number compared to the 14.6 million households that are underwater, but it will help curb the flow of foreclosed...