Dealing With Troubled Loans Other banks have for the first time established specific units to deal with troubled mortgages.

Reflecting the hard times hitting the nation's insurance industry, Moody's Investors Service Inc. lowered the ratings of four more insurance companies yesterday, citing troubled mortgage and real estate investments.

Its $2.5 billion in troubled mortgages now exceeds its net worth, or its cushion against losses.

Heavy exposure to troubled mortgages in the form of Collateralized debt obligation (CDOs), compounded by poor risk management led Citigroup into trouble as the subprime mortgage crisis worsened in 2008.

As of 2012, in the United States, a large volume of troubled mortgages remained in place.

And at the John Hancock Mutual Life Insurance Company, its $708.5 million in troubled mortgages amounted to 50 percent of its capital.

In October 2008, McCain proposed that the federal government buy troubled mortgages, and provide low-interest mortgages to qualified homeowners.

Yet only a fraction of troubled mortgages have gotten the same treatment.

Three Democratic senators yesterday proposed using $300 million in federal funds to help refinance troubled subprime mortgages and introduced a bill that would require brokers and lenders to act in the interest of borrowers.

The missed deadline places another luxury condo project into the hands of bankers specializing in troubled mortgages.