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Anyone else amused to see the WSJ smooching BSD Lewis Ranieri for helping homeowners avoid foreclosure? I’m sorry, I thought this was the guy who invented mortgage-backed securities, which made it easy for banks to dice up loans and sell them to investors. Which, after the housing bust, made it hard for banks to modify those loans so homeowners could avoid foreclosure. And swing your partner dosey-do!
Writes reporter James Hagerty:
As the nation struggles with the worst foreclosure crisis since the 1930s, Mr. Ranieri’s investment fund and others like it are emerging as the best hope for the roughly seven million U.S. households behind on their mortgage payments.
Ranieri runs a company, Selene Residential Mortgage Opportunity Fund, that buys troubled mortgages from banks and restructures the terms so people can stay in their homes. He does that by reducing the balance of their loans, which is the most effective way of preventing foreclosures. That obviously benefits borrowers, and it benefits investors by restoring a loan to health. And what’s wrong that?
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