Prof. Jayanth R. Varma’s Financial Markets Blog

A blog on financial markets and their regulation

Vulture funds restructuring sub prime home loans

Bloomberg has an interesting
story
(hat tip Aleablog)
about how vulture funds are buying up delinquent mortgages and then
reducing the interest rate to allow the borrower to resume
payments.

A market solution like this appears to be a better strategy than
the loan waivers that we are seeing in India and the government
sponsored home loan restructuring that is being proposed in the United
States.

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