Hedge funds disintermediate Wall Street

Bad bets on mortgage have discouraged bankers from bidding for distressed loans (home loans), leaving industry veterans like Vranos to snap up home loans for at little as 30% on the dollar.... Wring returns from bad loans may get tougher as two dozen state lawmakers consider more than 70 bills to protect homeowners.... For now, bids from hedge funds may be helping Wall Street by preventing a deeper swoon... Markets for subprime home loans came almost to a standstill... Hedge funds may find themselves ensnared in the patchwork of federal and state regulations governing mortgage lending, especially on loans that may have been touched by fraud....