Comments on: Task Force to Encourage More Mortgage Modifications http://www.nakedcapitalism.com/2007/09/task-force-to-encourage-more-mortgage.html Sun, 22 Nov 2009 11:45:14 -0500 http://wordpress.org/?v=2.8.4 hourly 1 By: Yves Smith http://www.nakedcapitalism.com/2007/09/task-force-to-encourage-more-mortgage.html#comment-776 Yves Smith Sun, 09 Sep 2007 19:35:00 +0000 http://www.nakedcapitalism.com/2007/09/task-force-to-encourage-more-mortgage-modifications/#comment-776 kaz.osawa,<br/><br/>Those are good points. I must confess the rating implications hadn't occurred to me. kaz.osawa,

Those are good points. I must confess the rating implications hadn’t occurred to me.

]]> By: kaz.osawa http://www.nakedcapitalism.com/2007/09/task-force-to-encourage-more-mortgage.html#comment-773 kaz.osawa Sun, 09 Sep 2007 11:33:00 +0000 http://www.nakedcapitalism.com/2007/09/task-force-to-encourage-more-mortgage-modifications/#comment-773 1. If determined that investors pay more servicing fee or any expenses more than those normally set out in the trust document, which are additionally incurred to servicer in connection with special servicing duties, prior to distributions to investors, more credit enhancement will be required to cover the additional servicing cost and would be otherwise downgraded. <br/>2. If investors agrees to mods not in a manner or for the purpose of loss mitigation to the extent permitted but to the detriment of investors, rating agencies will be called upon to change assumptions to calculate the additional credit enhancement, and would otherwise downgrade asset backed bonds. <br/>3. Any ways and manners adopted or proposed for mods squad activities to deal with credit risk transferred assets removed from the originator’s balance sheet would reduce the bond value to cause immeasurable damage to investors by carrying out the loss amplification at the cost of investors. 1. If determined that investors pay more servicing fee or any expenses more than those normally set out in the trust document, which are additionally incurred to servicer in connection with special servicing duties, prior to distributions to investors, more credit enhancement will be required to cover the additional servicing cost and would be otherwise downgraded.
2. If investors agrees to mods not in a manner or for the purpose of loss mitigation to the extent permitted but to the detriment of investors, rating agencies will be called upon to change assumptions to calculate the additional credit enhancement, and would otherwise downgrade asset backed bonds.
3. Any ways and manners adopted or proposed for mods squad activities to deal with credit risk transferred assets removed from the originator’s balance sheet would reduce the bond value to cause immeasurable damage to investors by carrying out the loss amplification at the cost of investors.

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