Visionet Systems Inc the sister concern of Pakistan's largest software company Visionet Systems Inc was quoted recently in the Wall Street Journal to have been amongst firms hired by investment-banking firms and investment firms.
Visionet Systems bought mortgage-backed securities to scrutinise sub-prime loan portfolios and identify loans that violate their contracts so they can tell the originators to buy them back.
Efforts by several major banks and Wall Street firms to unload bad U. S. housing loans are speeding up a shakeout in the sub-prime mortgage industry. As more Americans fall behind on mortgage payments, Merrill Lynch & Co J.P. Morgan Chase & Co, HSBC Holdings PLC and many others are trying to force mortgage originators to buy back the very high-risk, high-return loans that the big banks were eager to acquire in 2005 and 2006.
Arshad Masood, President of Visionet Systems Inc, says his company is currently working with three midsize Wall Street firms to audit the loans they've purchased, identify mortgages that may be eligible for repurchase and make a case for why they should bought back. Merrill demanded in December that ResMae Mortgage Corp which sold it $3.5 billion in subprime mortgage loans, or loans to borrowers with poor credit records buy back $308 million of loans where the borrowers had defaulted.
But in recent months, as home-price appreciation fell and borrowers faced increasing interest rates, more people defaulted on their mortgages. That sparked demands by Merrill and others that they have the contractual right to demand the sellers buy back the loans. Under mortgage contracts, mortgage originators must often repurchase loans that default very early in their lives or that come with underwriting mistakes, such as a flawed property appraisals.-PR
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