Back to Business - Investment Funds Profit Again, This Time By Paring Mortgages - NYTimes.com
▻http://www.nytimes.com/2009/11/22/business/22loans.html
For instance, a fund might offer to pay $40 million for a $100 million block of mortgages from a bank in distress. Then the fund could arrange to have some of those loans refinanced into mortgages backed by an agency like the F.H.A. and then sold to an agency like Ginnie Mae. The trick is to persuade the homeowners to refinance those mortgages, by offering to reduce the amounts the homeowners owe.