Accredited Home Lenders
What I have to wonder in all of this, though, is: With mass fear on the markets, is opportunity grinning its annoyingly cheeky grin somewhere? After all, there's nothing inherently wrong with subprime done right -- if you have a good sense of the default rates you'll be facing, and you price the loans accordingly, you can make decent returns.
However, it appears the lenders were making increasingly creative loans that posed a higher risk of default and they didn't adequately prepare for it. Now the buyers of the securities backed by these loan portfolios are banging at the door and waving repurchase agreements.
Obviously, many of these asset-backed securities aren't worth what investors thought they were when they bought them. That doesn't mean they're worthless, though, and while it's bad news for the New Centuries of the world, it could mean good news for anyone willing to roll up their sleeves, figure out what they're worth, and potentially buy at pennies on the dollar.
Yesterday, Newcastle Investment
There weren't any details on the loan pool it's looking at, and it's fully possible that Newcastle is putting its foot down square in the middle of a bear trap. All the same, I have to imagine there are a bunch of hedge funds out there just salivating at the loan pools they may be able to pick up at a fraction of their value as lenders end up with their backs to the wall.
Bring your thoughts and comments here.
More quick-takin' Fools:
- Quick Take: Subprime Scariness
- Quick Take: No Bailouts for Anyone
- Quick Take: How Fast Will Housing Prices Really Fall?
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Fool contributor Matt Koppenheffer does not own shares of any of the companies mentioned. You can visit Matt on the Fool's CAPS service here, or check out his blog here. There's nothing subprime about The Fool's disclosure policy; in fact, you might call it superprime.