Hedge Funds Boost Bad-Loan Prices as U.S. Sales Increase
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Sales of U.S. delinquent mortgages are accelerating as lenders rush to meet demand from hedge funds and private-equity firms that has sent prices surging.
Bank of America Corp. is marketing soured mortgages with a balance of about $3 billion, said David Tobin, principal at loan broker Mission Capital Advisors LLC. Wells Fargo & Co. is offering about $1.3 billion of the debt, according to two people with knowledge of the sale. JPMorgan Chase & Co. last month sold about $500 million of bad loans to Lone Star Funds, while Oak Hill Advisors LP bought $659 million of delinquent debt from Freddie Mac, said two other people, who asked not to be named because the transactions are private.