The recent carnage in the subprime mortgage industry and the regulatory pressure on banks to dump risky assets promise to flood the secondary mortgage market with delinquent loans.

Some major players in the mortgage market are taking positions to pick up the pieces. "There are opportunities coming daily into this market to buy these assets at good returns" and nourish them back to health, said Keenen Dammen, president of the investment capital group of GMAC-Residential Funding Corp., a Minneapolis-based unit of General Motors Acceptance Corp.

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