How To Buy Toxic Mortgage Loans
“I make my living off of toxic assets that as we know in the business is a bad loan that went into foeclosure and then we buy it at the foreclosure auction.”
-Earl Lawrence, Buys Foreclosed Homes
Earl Lawrence has been buying toxic assets or bank foreclosures for nearly 20 years. And coming soon you may have the opportunity to invest in toxic assets yourself: not like Earl does, but by investing in some of the billions of dollars of bad mortgages now on the books of our nation’s largest banks thanks to a new plan from Uncle Sam to help banks sell some of their bad loans to private investors.
Why would anyone want to buy bad loans? First because Uncle Sam is making it very attractive by offering some guarantees against loss… plus the ability to borrow at very low rates.
And second, because as the economy improves, some of those bad loans could become good again.
The program isn’t for individuals, just institutions. But at least two institutions have announced plans to put together mutual funds for us little people… you know…the ones paying for all this.
Of course, even with government support, buying troubled assets is risky business. But there is upside.
“If one feels that we’re at the bottom of the market place right now, which we’re pretty darn close to it. And these funds are properly managed, there’s a tremendous upside opportunity within the next 5 years.”
-Earl Lawrence, Buys Foreclosed Homes
Bottom line? If you’ve got the money and can handle the risk, it may be possible for you to recoup some of the tax dollars you’ve used to bail out banks. More on this story as it develops…
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Doug G
10. Jun, 2009
Your headline says “how to buy toxic mortgage loans” But the story does not tell you any useful way to do so.
Jim
11. Jun, 2009
There are some new websites out there such as BigBidder.com that host auctions on individual mortgage notes, as opposed to the huge pools sold through that government program. This is how everyday investors like you and I can purchase some of these “toxic mortgage loans” on the cheap.