Eminent-Domain Plan Could Affect MBS Ratings, Says S&P

27 Aug 2013

Plans by some municipalities to use eminent domain to seize underwater mortgages out of private-label residential mortgage-backed securities could affect ratings of RMBS, according to Standard & Poor’s.

Plans by some municipalities to use eminent domain to seize underwater mortgages out of private-label residential mortgage-backed securities could affect ratings of RMBS, according to Standard & Poor’s. S&P says the seizure plan would create an additional risk of default and would require greater protection for investors.

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