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Released: March 12, 2009

Investors profiting from - and fixing - mortgages

Source: Michael Hiltzik, L.A.Times (Free Registration)

The latest development in the mortgage market fomenting outrage in the streets and condemnation across the media spectrum is the spectacle of rich investors -- Wall Street traders, hedge fund operators, even former executives of the detested Countrywide Financial Corp. -- buying up delinquent home loans, reworking terms for borrowers, and selling them off to new investors at a handsome profit. Here's what I think about these bottom feeders: God bless them. If there's one fact about the mortgage meltdown on which almost everybody agrees, it's that fixing the problem will require a multifaceted approach and involve multiple participants -- banks, borrowers, the government and private capital. Over the last year or two, the last group has stepped up to the plate. Investors with billions of dollars have taken thousands of troubled loans off the banks' hands. They have done so on terms that give them great flexibility to modify the mortgages so that borrowers can afford the payments.

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