NY Fed Joins Other Investors on Loan Repurchase Bid

These investors have topped the key 25 percent threshold for voting rights on 2,300 “private-label” mortgage bonds, which will give them the ability to force trustees to act on repurchase requests. Investors heretofore have been frustrated by trustees and servicers, who have said they are limited in the information they can share.

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“Investors have been getting organized, and soon there will be a very large effort to resolve this mortgage problem,” said Bill Frey, president of Greenwich Financial, who has been working for bond investor rights for the past three years.

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Apparently homeowners aren’t the only ones getting jerked around by the servicers and trustees…

NY Fed joins other investors on loan repurchase bid

Excerpts from the report:

(Reuters) – The Federal Reserve Bank of New York on Wednesday said it may try to force banks to repurchase bad home loans backing securities it holds, joining the ranks of other big investors who have been gaining momentum with identical demands.

The three Maiden Lane funds combined held an average $67.4 billion in assets in the week ending July 28, Fed data shows.

These investors have topped the key 25 percent threshold for voting rights on 2,300 “private-label” mortgage bonds, which will give them the ability to force trustees to act on repurchase requests. Investors heretofore have been frustrated by trustees and servicers, who have said they are limited in the information they can share.

Investors who have banded together represent more than $500 billion in securities managed for pension funds, 401(k) plans, endowments, and governments, according to a letter to trustees from Dallas-based attorney Talcott Franklin. The securities are private mortgage bonds issued by Wall Street firms that helped trigger the worst financial crisis since the 1930s.

Continue reading here…

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