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IPFS News Link • Economy - Economics USA

Lippmann Calls for Mortgage Forgiveness After Subprime Wagers


Greg Lippmann, the former Deutsche Bank AG (DB) trader who gained fame for his bets against subprime mortgages before the housing market collapsed, is calling for debt forgiveness for U.S. homeowners.

“Principal reductions are necessary to help ameliorate the housing crisis,” Lippmann, chief investment officer for New York-based hedge fund LibreMax Capital LLC, said in an Oct. 31 letter to investors obtained by Bloomberg News. The step will also lower losses on loans underlying mortgage bonds, he said.

Lippmann, who co-founded LibreMax last year and oversees more than $900 million, joins a growing group of advocates for the increased use of mortgage modifications designed to keep borrowers in their homes by reducing their loan amounts. Current efforts to rework home loans mainly only lower monthly payments.