The investors who hold securities backed by Countrywide mortgages have voiced objections to Bank of America's $8.4 billion loan modification program, which was created to settle charges against Countrywide by numerous state attorneys general.
Investors will be forced to cover a large portion of the settlement's cost, and they believe they should have been contacted prior to the introduction of the program, the Wall Street Journal reports.
Bank of America, meanwhile, maintains that it has ‘delegated authority’ to modify many of the mortgages in question. The company also says it is in conversations with the investors to address their concerns.
The American Securitization Forum is currently working on a set of standards designed to streamline the process of creating loan mod procedures for mortgages now bundled into securities, the article adds.
Source: Wall Street Journal