I was wondering when we’d start to see press reports on this: more than a few hedge fund managers aren’t likely to go quietly into that good night on this “modify all mortgages” mantra that’s been steadily emerging. Via the NY Times:

… Greenwich Financial and Braddock Financial … hold securities backed by mortgages, and they argue that the terms of the underlying loans cannot be changed without their consent … William Frey, the president of one of the funds, Greenwich Financial Services of Greenwich, Conn., said that he was acting to protect the firm’s investments. “Any investor in mortgage-backed securities has the right to insist that their contract be enforced,” he said. In letters sent to banks and others, Greenwich Financial said that it was particularly concerned about the impact of a relatively new government program, Hope for Homeowners. That plan, which Congress approved over the summer, allows some borrowers to refinance their mortgages into fixed-rate loans with terms up to 30 years. Mr. Frey said that he was aware of two other funds in addition to his and Braddock Financial that sent similar letters, but he declined to identify them.

Which is something we’ve covered here at HW all along; the investor contracts involved in securitized deals here are complex, and in this sort of market often end up pitting one group of investors against the other. Of course, that didn’t stop John Taylor at the National Community Reinvestment Coalition from politicizing the issue in a way that’s sure to engender support from investors:

Told about the letters, John Taylor, the president of the National Community Reinvestment Coalition, a consumer advocacy group in Washington, said that he believed that the government might have to take action to protect homeowners from getting caught between different classes of investors. “We can’t try to operate in a crisis and think that we will be able to satisfy all the lowest common denominators like hedge funds,” said Mr. Taylor.