U.S. banks exported billions of dollars of MBS losses to their peers in Germany and elsewhere in Europe before the housing collapse. Now those overseas institutions may join the effort to put back some of the losses.

A legal clearing house for restive MBS holders says German banks have recently been enlisting. The claim is hard to verify, but cannot be dismissed solely as the hopeful chatter of lawyers and activist investors.

However, one German-based bank was also a large buyer of U.S. residential whole loans, and an issuer of American MBS: Deutsche Bank.

Representatives of sizable German banks have spoken of their interest in pursuing compensation for private residential MBS losses, and one European financial institution with MBS holdings confirmed to American Banker that it and others are looking to act.

"The pressure is to take a more proactive stance," a representative of the institution said. "Out of desperation, a lack of alternatives you could say, they are actively pursuing this road."

If brought to fruition, the effort could change the landscape for investor disputes. Though hundreds of billions of dollars in securitized mortgages are held overseas, few foreign bondholders have made much noise to date.

The arrival of fresh investors without major Wall Street relationships could provide a crucial boost for private-investor mass litigation. Aside from any international pressure that European banks might be able to lever, the U.S. members of the clearing house would benefit because recruiting members brings funding and enhanced court standing.

The bank representative attributed the movement partly to European regulators' demand that banks address losses in their securities portfolios.

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