As Banks Retreat, Private Equity Rushes to Buy Troubled Home Mortgages
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Charles and Pamela Hubbard of Sacramento briefly lost their home when a private equity firm’s subsidiary dealt harshly with their request for a loan modification.CreditJason Henry for The New York Times
Private equity and hedge fund firms have bought more than 100,000 troubled mortgages at a discount from banks and federal housing agencies, emerging as aggressive liquidators for the remains of the mortgage crisis that erupted nearly a decade ago.
As the housing market nationwide recovers, this is a dark corner from which banks, stung by hefty penalties for bungling mortgage modifications and foreclosures, have retreated. Federal housing officials, for the most part, have welcomed the new financial players as being more nimble and creative than banks with terms for delinquent borrowers…
As Banks Retreat, Private Equity Rushes to Buy Troubled Home Mortgages
