{"id":188332,"date":"2010-10-19T20:34:00","date_gmt":"2010-10-20T01:34:00","guid":{"rendered":"https:\/\/www.panix.com\/~msaroff\/40years\/2010\/10\/19\/mortgage-backed-security-holders-stira-little\/"},"modified":"2010-10-19T20:34:00","modified_gmt":"2010-10-20T01:34:00","slug":"mortgage-backed-security-holders-stira-little","status":"publish","type":"post","link":"https:\/\/www.panix.com\/~msaroff\/40years\/2010\/10\/19\/mortgage-backed-security-holders-stira-little\/","title":{"rendered":"Mortgage Backed Security Holders Stir\u2026\u2026A Little\u2026"},"content":{"rendered":"

Institutional investors who purchased mortgage backed securities issued by Countrywide, now Bank of America have sent a demand letter requesting that Bank of America repurchase their mortgages for non-performance<\/a>.<\/p>\n

What makes this a big deal is just who is writing this.<\/p>\n

Pacific Investment Management Co. [PIMCO]<\/span>, BlackRock Inc. and the Federal Reserve Bank of New York are seeking to force Bank of America Corp. to repurchase soured mortgages packaged into $47 billion of bonds by its Countrywide Financial Corp. unit, people familiar with the matter said.<\/p>\n

A group of bondholders wrote a letter to Bank of America and Bank of New York Mellon Corp., the debt\u2019s trustee, citing alleged failures by Countrywide to service loans properly, their lawyer said yesterday in a statement that didn\u2019t name the firms. The New York Fed acquired mortgage debt through its 2008 rescues of Bear Stearns Cos. and American International Group Inc. <\/p><\/blockquote>\n

Bank of America responded that it would, “defend its shareholders<\/a>,” which might make for an interesting conflict between two groups of too big to fail financial institutions.<\/p>\n

In either case, it makes Congressional Deus Ex Machina<\/span> hail Mary play less likely, since the constituencies that normally bribe<\/del> lobby the House and Senate appear to be fairly evenly divided.<\/p>\n

My guess is that this is actually not as big a deal as it sounds.<\/p>\n

I agree with Yves Smith, that this is primarily posturing<\/a>:<\/p>\n