Losses Following Servicing Transfer Shock Mart

Market players from both sides of the street last week were scratching their heads - and biting their nails - following losses on a handful of legacy residential mortgage-backed securities whose servicing Ocwen Financial acquired from American Home Mortgage in the past eight months. The affected trusts sustained losses totaling about $1.04 billion in May, close to $900 million more than losses seen in each of the previous three months, according to data from JPMorgan. Sellsiders said panicked clients were calling all week to find out where to point the finger and whether a wider precedent had been set.