Well of course, but only in part. There are other problems and one and not the least of which is the continual stalling. Holding on to this after this last extension is only for those that are willing to loose the farm. I doubt that any more extensions will be forthcoming. Hold at your own risk.
I believe the non-Agency paper was considered to be a Level 2 asset, so could be valued according to trades of similar securities. There are also companies that specialize in providing third party valuations of such securities.
I suspect the real problem is that they can't get the auditor to sign off on the restatements. Doing so would be an admission that they shouldn't have signed off on the first set, placing them in the cross hairs of any lawsuit.