MBS Investors are already burned. Basically they don’t have a say in the matter because their investments are going going going gone anyways right? What difference does it make. If a particular fund is already whittled down by 70-80% of it’s original value then so what? I would surmise there is alot of work being done right now to allow rewriting of loan servicing agreements to save the asses of these investors… hey a little trickle of money is better then 100% loss right?
I don’t think any of the regulatory intervention by the gov will have much of an effect on MBS guys or the secondary market in general.
What concerns me is how much disguised tax money will be used to now back up higher FHA limits for conforming loans. Just think how much money would be lost if all of these loans were conforming. It wouldn’t me MBS investors holding the bag, it would be the taxpayers.
