SSRN-What Do Subprime Securitization Contracts Actually Say About Loan Modification? Preliminary Results and Implications by John Hunt

Interesting! John Hunt reviews some actual contracts and finds they rarely strictly forbid loan modifications.

SSRN-What Do Subprime Securitization Contracts Actually Say About Loan Modification? Preliminary Results and Implications by John Hunt:

"A review of pooling and servicing agreements from large subprime securitization programs in 2006 reveals that about 10% of the contract ban loan modifications altogether. The other 90% do not seem to forbid win-win loan modifications (defined as modifications that benefit the borrower and increase the present value of cash flows to the trust), although their terms are open-ended enough that reluctance to make such modifications is understandable. If the subprime universe as a whole looks similar to the contracts we have reviewed to date, mass clarification of contracts rather than mass abrogation either through special legislation or through the creation of a special bankruptcy process may be appropriate."

That said, wouldn't it sort be assumed that you can't modify it, but it is not in writing, so ???