Posted on Monday, March 15, 2010
This alone could be enouhg to push many lenders over the edge. Accounting rules allow them to carry seconds at original face value, obviously high compared to our current reality. Writing them down could wreck havoc on lender balance sheets.
Fannie Mae and Freddie Mac or other investors in mortgage securities hold most of the firsts. But $766.7 billion in seconds are held by commercial banks, savings banks, and credit unions.