Robert Marshall, a member of the Virginia House of Delegates, sent a letter to Secretary of Finance Richard Brown last week, asking how much the Virginia Retirement System is vested in residential mortgage-backed securities and how much it lost on those investments. Based on estimates Marshall received from state representatives in late 2010, VRS has $3.2 billion in MBS holdings: $218 million is nonagency and $2.1 million is agency. Marshall told HousingWire his interest was piqued when he saw AIG (AIG) and other major financial institutions filing lawsuits over losses stemming from investments tied to securities backed by soured mortgages. "I was concerned that we would be even more in the hole if these mortgage-backed securities are lacking the collateral," Marshall said. In his letter, the delegate asks Brown to explain "what steps the commonwealth, VRS or other appropriate state agencies have taken to secure any investments related to RMBS or REMICs? "The retirement system is funded by investments and contributions by workers," Marshall said. His inquiry also focuses on the contentious topic of credit ratings agencies. Marshall posed a question to the secretary of finance, asking if the state's retirement system has identified the measures agencies use when assigning ratings to residential mortgage-backed securities. Richard Brown could not be immediately reached for comment Monday morning. Write to: Kerri Panchuk.