Former Goldman Sachs trader Josh Birnbaum, the trader who played a key role in the bank's bet against the U.S. sub-prime mortgage market back in 2007, just posted a 30% gain this year in his hedge fund, according to a person close to the situation.

Tilden Park Capital Management LP rose 6% in September, as a result of winning wagers on securities backed by the loans to borrowers with poor credit. Tilden Park declined to comment on the returns.  

Birnbaum said, "there’s billions of dollars of bonds trading a week and they are hotly debated by people who trade them. That produces an opportunity to make money in this space because valuation opinions are vastly different.” However, he declined to comment on his fund's returns.

Residential mortgage securities that lack U.S. government backing make up the largest part of Tilden Park's portfolio. The housing market is recovering as the Federal Reserve purchasing of government backed mortgage securities and Europe's debt crisis lower bond yields, which is driving the U.S. home loan rates to record breaking lows according to report in Bloomberg.