Banks Uncover Loophole to Buy Home Loans at Below-Market Prices

Bloomberg, Aug. 20, 2020–Joe Light
Banks and other lenders have found a way to potentially make billions of dollars from the coronavirus-fueled upheaval in the U.S. mortgage market — yet it risks burning bond investors in the process. The earnings would come from an unanticipated side-effect of Congress’ decision in March to allow homeowners affected by the pandemic to delay loan payments for as long as a year, combined with arcane regulations governing mortgage-backed securities.