MoneyGram is the latest non-mortgage lender to be caught investing in the subprime mortgage market, says BusinessWeek. (emphasis ours)
The money transfer services provider’s stock lost half its value Jan. 15 after the company disclosed a plan to recapitalize its balance sheet that depends on its ability to shed its risky loan portfolio.
While the company has been a relatively conservative play on money transfer services to consumers, its other business of transferring money between banks and other financial institutions has turned sour. MoneyGram now faces larger losses after reinvesting money it receives for bank transfers in risky investments such as subprime mortgages.
So which companies haven’t been investing in the subprime mortgage market? Taco Bell?