Servicers Fear MBS Lawsuits
By Brian Collins
WASHINGTON -- Fear and doubt seems to be impeding mass restructurings of problem mortgages as servicers are wary of being sued by investors holding mortgage-backed securities.
The Bush administration, federal regulators, mortgage industry leaders and consumer advocates are encouraging servicers to develop loan modification programs to stem rising foreclosures due to risky adjustable-rate mortgages.
Subprime defaults and foreclosures are already at record highs and many are concerned that a wave of resets on two million subprime ARMs over the next 18 months could really create a crisis.
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