Bad Loans Big Business on Wall Street Now

Posted by on February 28, 2013 in News

Bad Loans Big Business on Wall Street Now

REUTERS – February 19, 2013

Delinquent and defaulting mortgage loans to struggling US borrowers have become big business on Wall Street, as investors scoop up bonds backed by non-performing loans (NPLs), writes Adam Tempkin.

With millions of borrowers still under water or facing foreclosure, real estate investment trusts (REITs) and others are snapping up NPLs at a discount, hoping to earn returns from their eventual resolution or liquidation.

And the more value that can be extracted from each loan, the better the returns – which means it is in the interest of investors to work with troubled borrowers to find solutions.

Read the full Reuters press release here on bad loans.