Mortgage servicers and bond trustees fail to get bad loans repurchased by lenders as often as they should, harming investors, Amherst Securities Group LP said.

Servicers have no financial incentives to incur the costs to "put back" loans, and there's also "often a direct conflict of interest if the servicer and the originator are related parties," Amherst analysts led by Laurie Goodman wrote in an April 13 report.

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