MBS investors need to choose their servicer wisely: Joseph Mason column
Having the right servicer in place is critical in maximising the recovery value of distressed loans in mortgage-backed portfolios.
Since the second half of 2007, investors in mortgage-backed securities have had two questions concerning deal servicers: what are they doing with loan modifications; and are they adding value? Now, as originators are taking more loans back on balance sheet through repurchase demands, they, too, are becoming concerned.
Most of the approaches to valuing servicer performance are either incomplete or do not address the industry’s problems. Servicer ratings produced by the rating agencies only give a
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