The more than $1 billion of losses retroactively recognized last week, as a result of mortgage modifications on 170 US residential mortgage-backed securitizations, are credit negative for these transactions, according to a Moody’s Investors Service report.

Wells Fargo Bank, N.A., the trustee and securities administrator on the deals reported that loans that had been previously modified as forbearances were reclassified and reported as realized losses in May.

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