davidt welcome to the board. Have a thick skin and you will be okay.
Someone may have already mentioned this and I know we have had several posts on this as well.
For now, forget about who originated the loan. The entity servicing the loan is more important. Chances are like 99.999% that the original loan was sold. It was then bundled up and securitized and resold. The original terms of the loan are what makes it attractive to investors so that they get a return. The entity servicing the loan may not be able to change the terms of the loan such as the reset date, or the margin in the new rate. I am not knowledgeable enough to answer the question thoroughly. By altering the terms of the original loan, the entity servicing it may incur substantial liability to the entity that bought the security.
An earlier post in the thread brought up a good point that the possibility should be entertained. How would things be affected if there was a widespread rewriting or altering of the loans. It is hard for me to wrap my arms around how that can happen as there has been so much reselling, leveraging, and shuffling the decks of the tranches… It is worthy of discussion but I just don’t see how it can happen. You see what I mean? The underlying mortgage for the homeowner is Lemon Grove who is about to get reset is all over the place now. Even Wall St may not know where the heck it is…
I think what you are seeing right now is interesting. Wall St is trying to inject money straight into the funds to prop them up. They are not changing the rate of return on them.
Once more, we had a poster awhile ago who worked in loss mitigation and he had some better insights into this.
