Mr Cooper Group Inc (COOP)

[LuckyPanda]

Mutual Funds arent allowed to buy bankrupt stocks but speculative hedge funds can. Thats why funds like Appaloosa and Greywolf owns a shit ton of preferreds. They thought they could push out commons and get the entire estate. Notice they werent buying the higher class bonds. They knew where the hidden piggy bank was and they were buying what they thought would have been the surviving equity class - preferreds.

Also, not many in 2008 thought the US economy was going to survive and the loans were not going to go into default. Remember, at one point MBS were selling for 20 cents on the dollar. Not many were convinced that the WMu portfolio would continually perform and earn 2.9% margin for the next 10 years. But here we are...after 10 years..with the best performing economy in decades!