Wednesday, October 27, 2010

Institutional investors organize to recouping mortgage losses

This is the real problem with foreclosure, since it might affect the way and cost on how mortgages are sold and packaged.  
Nearly 200 investors are expected to attend a meeting in New York on Wednesday called "Robosigners and Other Servicing Failures," said David Grais, a New York securities lawyer who is sponsoring the conference and represents two Federal Home Loan Banks that have filed lawsuits over mortgage-backed securities they own.
Meanwhile, Talcott Franklin, a securitization lawyer in Dallas who has been organizing bond investors to pursue their claims against mortgage-loan servicers and sellers, says he has "been picking up two to three [investors] a day" as the foreclosure mess deepened in the past two weeks
Potential losses to banks from the repurchase of troubled loans could reach $55 billion to $120 billion, according to bond analysts at J.P. Morgan Chase & Co.
Some investors in mortgage-backed securities say the 50-state investigation is giving a push to efforts among investors to join forces. "The possibility of a ... settlement imposing additional losses for the negligent conduct of servicers upon our retirees has galvanized investors to organize and fulfill our fiduciary responsibilities," Mr. Lieberman said.
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