As unpalatable as it may sound to MBS investors, a hedge fund executive said it’s well past time for the mortgage industry to cut its losses by forgiving principal and re-underwriting troubled mortgages to more traditional criteria in order to revitalize the sector and the broader economy. Michael Corasaniti, chief executive officer of Tourmalet Advisors, a hedge fund in New York City, told attendees at the American Mortgage Conference sponsored by the North Carolina Bankers Association this week that old-fashioned manual underwriting is the way out. “Early in my career, I was...