Regulating mortage buyers is a political move not a sensible regulatory one.

Politicians are prone to playing politics, that’s a given. What is strange is that so few demonstrate a knowledge of the regulatory environment that banking exists in. While decrying a ‘lack of regulation’ they fail to see that loan sales are actually a result of regulation, the very thing they are saying they want.

If you have a long term agreement with a borrower that is a contract, it can and does stand the test of the courts. A fund buyer won’t seek to overturn that contract even though the loan is technically ‘not performing’.

This is an important point, if you got a split mortgage and it was agreed on a long term basis (as they are) then your loan is non-performing because part of the loan isn’t accruing interest. You are making payments in full on the other part, but it is less than the original contracted agreement. Any losses of interest are accounted for and already booked, but the loan itself is still going to be classified that way.

If somebody buys your loan they have to …

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