Late last month, a Manhattan district court judge denied a plaintiff investor's motion to hire experts to perform statistical sampling analysis in a case involving legacy MBS.

The founder and CEO of Premium Point Investments, New York, was sentenced to 50 months in prison for overvaluing by $100 million the value of securities his hedge fund had invested in.

Investors in some prime non-agency MBS are taking losses even though loans in the deals are performing well. The red ink is tied to variable servicing fees and high prepayment rates.