Securitisation participants are demanding limits be
placed on the rights of second lien holders to stop them
interfering in workouts.
First lien investors and servicers’
attempts at short sales and modifications are now facing
stronger resistance from junior lien holders. They are blocking
offers for principal forbearance or earned forgiveness in
situations where defaults could be avoided.
"That materially impacts the interest of my trust,
it’s held hostage by a second lien holder," said
Redwood Trust managing director William Moliski speaking at the
American Securitization Forum’s...