Carrington Capital Management, a former subprime securitization specialist, salvaged an impressive amount of money from its low-ranked residential mortgage-backed securities, thanks to the unusual strategies of its servicing affiliate.

By stockpiling foreclosed homes and declaring borrowers current — sometimes unilaterally — Carrington received payments that would otherwise have protected other investors from future losses. In a single deal that American Banker analyzed, Carrington's actions likely netted its investment fund more than $20 million.

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