Minor RMBS losses anticipated as foreclosure freeze wears off

Tranche holders likely to avoid large losses, but legal action threatens servicers

The self-imposed foreclosure moratorium enacted by some of the largest US mortgage lenders in recent weeks looks likely to have a limited effect on residential mortgage-backed security (RMBS) recovery rates as liquidations begin to resume.

Securitisation analysts have been examining the likely consequences of the moratorium, and have concluded RMBS investors' yields should not be affected by the freeze, which already appears to be coming to an end.

Analysts and credit rating agencies anticipate