Bond giant Pacific Investment Management Co, billionaire Gerald J. Ford and a unit of money manager Legg Mason Inc are eyeing ways to buy up banks' toxic loans, the New York Post said.

Citing people familiar with the matter, the paper said PIMCO, Ford and Legg Mason's Western Asset Management Co are among potential investors.

The investors are considering using a vehicle similar to a real-estate investment trust, which would sell shares to the public and use the proceeds to buy troubled residential mortgages and commercial real estate.

Ford is also considering using a private-equity-like vehicle, the paper said, citing sources, although they warned his plans may not pan out.

Reuters could not immediately reach PIMCO for comments and was unable to leave a voice message at Legg Mason outside regular business hours.

(Reporting by Esha Dey in Bangalore; editing by Simon Jessop)