Not every mortgage business is feeling the heat as part of the industry-wide downturn. Houston-based Oxford Funding -- whose slogan (Profiting in a Mortgage Meltdown) earned the attention of Time's Justin Fox last week -- said Monday that it has launched a hedge fund to invest in discounted portfolios of residential and commercial mortgages. According to a press statement, the fund will invest in performing, sub-performing and non-performing mortgages purchased on the secondary market "at substantial discounts to face value." Oxford has gotten some attention so far for delivering returns on its scratch-and-dent business, in spite of market difficulties that have wounded much larger operations, including C-BASS and Franklin Credit. (See previous coverage on scratch-and-dent here). Last week, the firm said it had realized 90 percent ROI on its own loan portfolio during 2007. “The Fund gives Oxford Funding another vehicle and another opportunity to profit from disruptions in the current mortgage markets,� said Ron Redd, Oxford's CEO. “There is presently so much opportunity in the market; we want to capitalize on as much as possible.� For more information, visit