The Real Deal Miami

Foreclosed homes that made Paulson billions

April 22, 2010 04:36PM

The collateralized debt obligation, or CDO, that made hedge funder John Paulson $1 billion and has since landed Goldman Sachs in the throes of a civil fraud suit was comprised of about 500,000 mortgages from 48 states, more than half of which are now in default or foreclosed. Paulson’s bet that the borrowers referenced in now-infamous Abacus 2007-AC1 would ultimately default didn’t have any bearing on whether or not they actually did, but the Wall Street Journal tracked down the homeowners from that portfolio to find out how they’ve fared in the aftermath of the housing collapse, the deal, and how they’re reacting to the man that got rich on their losses. “The man came up with a scheme to get rich, and he did it,” said Mr. Booket, who lost his home in Aberdeen Township, N.J., to foreclosure after a car accident and is moving out next week. “So more power to him.”