The key to solving the housing crisis is the disposal of billions of dollars worth of nonperforming loans sitting on the books of the nation’s depositories and investment banks. But now that the mortgage industry has been wracked by the “foreclosure-gate” crisis the NPL market may be the next victim of this fast growing mess.

According to interviews with players in the NPL space, the situation now boils down to this: Why purchase a nonperforming mortgage when one of the avenues of disposal—foreclosure—has been shut down by the nation’s politicians and courts?

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