In The Big Money today I culled one of the good bits from one Goldman deal. What I don't get into in the story--because, let's face it, there's only so much legalese that an ordinary reader can take--is that the limits that deal puts on giving any relief to homoeowners in trouble are far from the worst I've seen. I don't cite the language of some mortgage backed securities created by Countrywide in the story, but I'll add it here:
The master servicer may modify any mortgage loan provided that the master servicer purchases the mortgage loan from the trust fund immediately following the modification.Translation: sure, the master servicer--that's Countrywide--can modify a loan that's about to go bad, if they feel like buying it back for it's face value. And there's no chance in hell they will do that.
Connoisseurs of fine legalese will appreciate the ass-backward construction here. But it's not so backwards that you can't figure it out if you try, and not many people seem to have tried. This despite a stream of articles about Countrywide's notable intransigence in helping their borrowers, stories about the noisy and essentially result-less pressures put on them by community activists, and editorials calling on them to change their ways. I will bet that even the fact that the prospectus laying out these terms is public record and available from the SEC's website for the price of a mouseclick will come as a surprise to many reporters. As borrowers were held by the hand by mortgage brokers telling them that the details didn't matter, so reporters too look at the eye glazing hundreds of pages of financial-ese and imagine there are no bombshells in there. There are.
