WHAT SECURITIZATION PROBLEM?
There are a few points I would like to make regarding Professor Johnson’s presentation to Congress today, but I will do that in another comnment. First, I have been quite interested in the problem of how to deal with home mortgages, seemingly out of bounds for modification because they are securitized. According to the FDIC, securitization is not an impediment to mortgage modification. What the heck! Is this securitization worry much ado about nothing? In an article posted Tuesday, Nov. 18, in the NYTs, “WHAT SECURITIZATION PROBLEM? THE F.D.I.C WEIGHS IN”, Joe Nocera describes how he got a call from Sheila Bair and Michael Krimminger of the F.D.I.C. They indicated to Mr. Nocera that contractual stipulations for mortgages in a security pool generally do not prevent the mortgages from being modified. Here’s a quote from the article. The F.D.I.C., however, begs to differ. As you’ll recall, the agency took over the California bank, IndyMac, which had, as Ms. Bair put it, “a pretty impaired
