Just wait till all the investors in Mortgage Backed Securities realize they have Nothing Backed Securities…
Just wait until the investors realize the homes they have been told are worth $500,000 are worth $50,000.
Just wait until they realize the Emperor Has No Clothes..
See this little Nugget from Housing Wire:
Nationstar may not be the only servicer facing surprise losses due to erroneous accounting practces.
Fitch Ratings recently claimed that confusion over how to account for principal forbearance resulted in $1 billion in surprise losses on mortgage bonds backed by Nationstar-serviced loans.
Now Moody’s Investors Service is sounding the alarm as well, claiming Nationstar isn’t the only servicer at risk. Indeed, the bad accounting may spread much, much further.
The credit ratings agency states the full extent of the risk is difficult to gauge as mortgage servicer practices are far from uniform.