Volume 2014 - Number 46
December 5, 2014
Program Managers Seen as Helpful for MBS Backed By Nonperforming Loans, Though Conflicts Exist
Non-agency MBS backed by nonperforming mortgages that include a program manager benefit from the unique oversight provided by the manager, according to Moody’s Investors Service. However, there are concerns that in some instances the program manager’s interests may conflict with those of senior bondholders. Moody’s said program managers typically set performance targets and monitor servicers’ progress at the loan level, adopt foreclosure strategies that reduce timelines and expenses and direct servicers’ loss mitigation strategies. The managers are more common on non-agency MBS backed by nonperforming loans than on non-agency MBS backed by newly originated mortgages. Program managers are...
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This weekly covers the secondary mortgage market, including mortgage-backed securities and asset-backed securities.
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