Trying to Size Up NPLs

Trying to size the nonperforming loan market is a little like trying to nail Jello to the wall. We know that of the nation's $10 trillion in outstanding home mortgages, roughly 10% are delinquent which means $1 trillion in "late" mortgages need to be resolved through sales or workouts. But we also know that the auction of nonperforming loans (NPLs) has been slow to gather steam -- though in recent months it appears that activity has indeed picked up with such mega banks as Wells Fargo and Citigroup  unloading their toxic loans into the secondary market. (Buyers include hedge funds and vulture fund investors.) We're told by one investor that just $3 billion in NPLs changed hands last year with about $12 billion trading this year. This investor – requesting anonymity – believes 2011 could be a banner year for the NPLs.  We shall see.