Mortgage News

Business Week is reporting that there are hedge funds run by former Wall Street and Lending company executives which are buying up delinquent mortgages and attempting to refinance them to help the homeowners save their properties from foreclusure. It's a risky business, and ultimately they can't always help everyone. Some delinquencies are so bad that the only thing they can do is to buy up the paper for a fraction of its face value, foreclose, and then try to resell the property at lower prices.

This is an encouraging development and provides an effective counter-argument against those who claim that private enterprise can't protect homeowners' interests as well as the government can. While the practice hasn't played a signficant role in the mortgage market yet, the article quotes one housing advocate saying that he'd been waiting for this kind of thing to happen. He applauded the fact that this gives more options for modifying mortgages to distressed homeowners.