With lots of news coming out regarding the housing market, especially on the mortgage and mortgage-backed securities, it is easy to get lost in all the hype. And it is also easy to mix the fact from fiction. But many will be surprised that some of the news circulated in major news outlets is grossly exaggerated.

One of those will be the concerns encircling the huge numbers of mortgage loans. Much of what is being speculated assumes that the post-2004 deterioration of underwriting standards has affected the creation of securitization trusts and transferring assets. Many who have believed in the headlines have also ignored the long history of securitized mortgage market spanning 30 years and the language on transfers of notes to securitization trusts used by the Uniform Commercial Code (UCC).

If there is something people should believe, it may well be law firm SNR Denton’s analysis. It says, “The recent allegations of possible wholesale failures to convey ownership of mortgage loans to private-label RMBS trusts are baseless and unfounded. All parties to these transactions…clearly intended that the transactions convey ownership of the loans to the trusts, and appropriate steps were taken to effect such conveyances in accordance with well-settled legal principals governing transfers of mortgage loans.”

The foreclosure mess has also contributed a lot into the recent buzz on mortgages and MBS. Though it is necessary for these procedural errors to undergo investigation, there needs to be an admission that the current servicing procedures are not fit for the housing market crisis. Though the mortgage servicers are used to handling huge numbers of transactions, they are not used to handling an influx of non-performing loans and the demands of foreclosure prevention and modification initiatives.

MBA currently reported that 9.9% of all loans are delinquent and that 6.3% are even 60 days or more behind in payment. With the mortgage servicers’ history of not being able to perform adeptly under stressed conditions, adding staff and resources will not help much in the current scenario.

There is much to do to salvage the housing market. It will help if everybody steps back and evaluate the news before making matters worse with unjustified rumors.