Mortgage Seizure Fight Poised to Raise Agency-Backed Loan Rates
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A change in rules for the most liquid part of the agency mortgage-bond market as Wall Street fights municipal seizures would make even government-backed loans costlier for certain borrowers, according to JPMorgan Chase & Co. analysts.
The Securities Industry and Financial Markets Association has discussed with its members who set guidelines for To-Be-Announced, or TBA, trading of the debt whether to exclude loans from areas that use eminent domain powers to buy “underwater” mortgages, said Kenneth Bentsen, an executive vice president at the New York-based group. San Bernardino County, California, last month created an authority to consider the action.