Quote:
Originally posted by Mmmm, Burger (C.J.)
Isn't there also a problem with having all of the mortgages securitized, and as a result getting the various interested holders of a piece of the mortgage together to agree to work-out terms is much more difficult than if, say, a single bank owns the loan?
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The typical pooling and servicing agreement allows the servicer to do a number of things without consent. Many (I don't know RMBS structures well, so maybe it's different) provide for a special servicer with greater power to modifiy loan terms in bad circumstances.
What I've read indicates that the general thinking on the "bailout" allows for the modification of the loan terms without the consent of the holders or the need to resort to special servicing. I think that there are a lot of entities holding RMBS bonds who have no idea about anything related to the basic structure of the security, nevermind the much discussed lack of knowledge of the underlying assets. All they knew is that the interest payments were higher.
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