Rossâs American Home Mortgage Servicing Inc. and Roseâs Carrington Capital Management LLC are accusing each other of worsening the recession by devaluing homes and the mortgage bonds that sparked it. http://www.bloomberg.com/apps/news?pid=20601109&sid=aisktM__QegI&refer=home
You ever catch Ross on Bloomberg? zzzzzzzzzz He's yet another billionaire who got his nut and is now pushing a socialist agenda. It's sickening to listen to him. None of these guys have the class to come out and admit that they simply made bad investments but instead are content on playing "The Blame Game."
I disagree. Wilbur is still one of the smartest guys on the street...but even I was surprised by the American Home Mortgage deal as well as the AGO deal. Still the King of BK and someone I always respect.
So a hedgefund buy bonds, they sell for profit the bonds with less risk, and they keep the tranche with most risk. Now that no money is made on that high risk tranche bond, they try to keep foreclosure standing still, so they make some money on the bonds they keep?
I read this story first on HousingWire a few days ago. I thought it was odd that Bloomberg reported it as an exclusive. From what I saw reported it looks like Wilbur Ross hit this hedge fund hard with a new action when he sued them for racketeering. You have to wonder what the hedge fund was thinking when it tried to air its dirty laundry last month and tried to charge American Home for selling at fire sale prices when really they just got market prices - and could have gotten higher prices if Carrington didn't make them wait to sell the REOs. http://www.housingwire.com/2009/03/19/american-home-fires-back-sues-carrington-for-racketeering/ This should interesting to see who wins out. Looks like American Homes' case is pretty strong given the tone congress is taking with loan mods these days.