Ryan’s Mortgage Blog:
So I guess a few banks have had some hard times recently (sense the sarcasm). These hard times have left some deals on table for private investors and hedge funds to come and swoop up and try their luck at the mortgage game.
Several hedge funds, private equity groups and private investors have bought tens of thousands of distressed loans and foreclosed properties around the country. They plan to profit from the banks loss. They are buying them from Wall Street investment banks that are in trouble and are looking to rid themselves of their problem mortgages. These new investors claim they are “easier to deal with” than banks. They buy the loan at enough of a discount so they can be flexible when helping distressed customers, while still making a profit.
This game isn’t as easy as it sounds since nearly half of the loans these groups purchase aren’t salvageable and go into foreclosure. After foreclosure the group has to try and sell the home and hope they make most of their money back on the deal. It is all a numbers game for them, but the good news is they want you to keep your house so they don’t have to deal with selling it.
Feel free to ask me any mortgage related questions; I can be reached at RBaker@PeregrineLending.com