BIS Review 162/2010  3  Given the poor performance of the mortgage assets, investors, including the Government Sponsored Enterprises (GSEs), have sought to pursue put back claims through various legal avenues, including requesting that mortgage servicers provide underlying mortgage files and the requisite documents. A GSE will generally buy a loan out of an MBS pool when the loan becomes 120 days delinquent.
Thus, it seems to be the right time to review what went wrong, to take stock of the lessons learned and to propose ways to reduce the likelihood of similar events occurring in the future. In my remarks today, I will argue that the crisis has shown us that policy-making is faced with new challenges and needs to take some new, less explored paths.