Vulture Funds Looking To Buy, Work Out Delinquent Home Loans

Bloomberg news service reports how so-called vulture funds are purchasing distressed residential mortgages for as little as 50 cents on the dollar, servicing the loans themselves, and negotiating loan workout arrangements with financially strapped homeowners in an effort to turn profits from the subprime mess.

• Once borrowers have re-established themselves, the loans can be resold in the secondary market at a 15-20 percent gain. "If you get the servicing right, you can make money from these mortgages,'' [vulture fund investor Ralph Dellacamera] says during an interview in his 33rd-floor offices in midtown Manhattan. "We win if the homeowner gets to stay in their home.''

For more, see Vulture Fund Deals With Delinquent Homeowners Lost by Subprime.