Investors including US mortgage giant Fannie Mae holding decade-old residential mortgage bonds are fretting over potentially huge losses on securities where delayed foreclosures could lead to complete write-offs on defaulted loans. Mortgage servicers, whose job is to ensure bondholders receive repayments on loans, have frequently failed to foreclose on delinquent debt in a timely manner, and therefore risk falling foul of legal deadlines which limit the time homeowners can be chased for payment.
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