Treasury’s New Principal Forgiveness Option in Loan Mods May Ease Investor Losses on Non-Agency MBS
June 11, 2010
The Obama administration late last week released guidelines on a new principal reduction option that may make loan modification viable for many underwater non-agency mortgage borrowers, although MBS analysts note that its impact will vary for different tranches. The new Principal Reduction Alternative is targeted to distressed borrowers with current loan-to-value ratios...