Great business model. Borrow money at 13% to support loans made at 7-10% to over-leveraged borrowers who are upside-down in their mortgages and are defaulting at increasing rates.
I think the only way to come out of it is to leverage these new funds into financial instruments that bet against housing such as puts on other sub-prime lenders or bets against home price increases on the CBOT.
Otherwise, they are simply brain dead and living on life support.
