Royal Bank of Scotland analysts foresee “significant and perhaps insurmountable” challenges for investors trying to force the trustee of $26 billion of non-agency residential mortgage-backed securities issued by Countrywide Financial Corp. to repurchase the mortgages. Earlier this month, Houston law firm Gibbs & Bruns said its clients want Bank of New York to investigate pools used in the RMBS by beleaguered lender Countrywide because they “didn’t conform to the required representations and warranties at the time they were used as collateral for RMBS.” But a Bank of New York representative told HousingWire the bank would only act upon specific requests from investors. The bank’s response speaks to the problems investors face trying to curtail losses on non-agency MBS. RBS analysts said investors must receive copies of origination documents if the mortgages are to be re-written, and the sheer volume of paperwork poses “substantial difficulties” for the process. More than 229,000 loans, worth $50.3 billion, were sold by Countrywide into 55 deals, according to RBS, citing the Gibbs & Bruns announcement. Some 43,380 of the loans, valued at $12.1 billion, are delinquent, while 34,788 are paid off with a loss. It costs anywhere from $250 to $1,000 to re-underwrite one loan, so roughly 78,200 loans could cost at least $20 million to $80 million, according to RBS analysts, who anticipate the process could take at least two years, if not much longer. “This cost would typically be borne by the investors bringing the claims. They may only be able to recoup these costs from the seller if the claims are successful,” analysts said. “Of course more generally, given these hurdles, investors’ objectives may be to achieve some sort of negotiated settlement in a shorter period of time.” “The goal of the review would be to identify material adverse breaches. Since there is no bright line definition of materiality, there may be relatively little incentive for the parties to reach agreement,” according to RBS. Write to Jason Philyaw.