Hedge funds led by Paulson & Co. and Maverick Capital are piling into mortgage insurers in a bet that some of the companies worst hit by the U.S. housing crash will be among the biggest winners in the rebound.
Investors demanded mostly higher relative yields to buy securities tied to rental houses managed by Blackstone Group LP’s Invitation Homes as the largest single- family landlord completed the new market’s biggest deal.
MGIC Investment Corp., the mortgage insurer that requested waivers from its regulator to keep writing new policies, was unprofitable for a seventh straight period as homeowners struggled to make their payments.
Ocwen Financial Corp. won a $3 billion auction for Residential Capital LLC’s loan-servicing unit, outbidding Nationstar Mortgage Holdings Inc. as it aims to become the largest non-bank home-loan servicer.
Colony Financial Inc. and Starwood Property Trust Inc., the U.S. mortgage investors formed two years ago amid an expected surge of distressed debt, are turning to Europe as banks tighten lending and sell real estate loans.