'Vultures' Save Troubled Homeowners
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Anna and Charlie Reynolds of St. George, Utah, were worried about losing their home to foreclosure last year. Then they got a lucky break—from an unlikely savior.
Some investment funds are emerging as the best hope for millions of U.S. households, like the Reynolds, above, who were behind on their mortgage payments. James Hagerty discusses. Also, Anupreeta Das and Liam Denning talk about BHP's $38.6 billion hostile bid to buy Canada's Potash, a bid that Potash's management called 'grossly inadequate.'
Selene Residential Mortgage Opportunity Fund, an investment fund managed by veteran mortgage-bond trader Lewis Ranieri, acquired the loan at a deep discount and renegotiated the terms with the Reynolds. The balance due was cut to $243,182 from $421,731, and the interest rate was lowered. That reduced the monthly payment to $1,573 from $3,464, allowing the family to stay in their home despite a drop in Mr. Reynolds' income as a real-estate agent. "It was a miracle," says Ms. Reynolds.
But Mr. Ranieri isn't your typical miracle worker. As a fund manager who was once vice chairman of the bond-trading firm Salomon Brothers, he's a member of the Wall Street crowd that is often pilloried for helping inflate the housing bubble, though he sat out the excesses of recent years. The 1989 book "Liar's Poker" made him famous for billion-dollar trades in mortgage bonds and junk-food "feeding frenzies" with his trading-desk buddies.
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Posted via email from WESTCHESTER COUNTY DISTRESSED PROPERTY INFORMATION
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