Investors with nearly $1 trillion of holdings of non-agency mortgage-backed securities are concerned about the Obama administration’s latest loan modification proposal, according to Tom Deutsch, executive director of the American Securitization Forum.
Although 10 servicers have agreed to shell out $8.5 billion as part of the OCC/Federal Reserve foreclosure settlement, it won’t be known for up to a month exactly how much it will cost each bank.
A federal judge recently approved an $11.25 million settlement for investors who purchased $5.26 billion of non-agency MBS issued by jumbo lender Thornburg Mortgage. The lawsuit alleged false and misleading disclosures by Thornburg.