Research
Disclaimer - All research contains opinion of Whole Loan Capital and should not be used as the reason for any investment. Whole Loan Capital is not offering any securities or investment advice, merely opinion about current market conditions.
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Post - August 25, 2011
Look at the Steep Credit Curve for Good Risk Adjusted Returns
The recent FOMC announcement about “exceptionally low” rates through mid-2013 requires some new ideas on how to find adequate and stable returns. Considering the shape of the credit curve investors can capture very good risk adjusted returns with marginal increases in credit/principal risk by looking at segments of the residential mortgage market.
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Post - July 31, 2011
Old Subprime is New Again
Banks have virtually no appetite for risk these days. With legacy issues, regulatory oversight, and increased capital and compliance requirements, bankers want only ultra clean residential mortgage loans that have almost zero chance of default. This has created an A+ credit requirement for conventional borrowers, leaving many with nowhere to go. Today private capital / non-bank lenders are just starting to fill this void by using traditional subprime lending strategies.
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Post - June 8, 2011
REIT Presentation for Lenders Whole Loan Capital has prepared a presentation for lenders considering forming a REIT. Please contact us for a copy of the presentation.
Post - April 21, 2011
QRM Will Help Restart 'Non-Traditional' Lending
As the banking industry accepts the limitations that QRM and a regulator-heavy environment dictate, the line in the sand about what can and cannot be done from a residential bank lending perspective will brighten. This line will define in and out-of-bounds for FDIC insured institutions. While this could result in borrowers that reside inside the 'box' being over-banked, the opportunity created by borrowers outside the lines will be enough to restart some form of non-traditional lending.
Post - May 23, 2011 In the Media - Whole Loan Capital Reuters: IPO VIEW - Subprime, securitization, in ex-AIG lender's plan Springleaf and other such companies can grow as implementation of Dodd-Frank financial regulations result in the "over-banking" of borrowers that can meet today's strict standards, said David Akre, principal for Whole Loan Capital, a mortgage trading and advisory firm. Regulations will draw a line in the sand, with borrowers who meet the higher standards being "over-banked," while others who can make down-payments and pay monthly bills are locked out, said Akre, who co-founded New York Mortgage Trust in 2033. "The opportunity created by borrowers outside the lines needing credit will be enough to restart some form of non-traditional lending," he said. Full article: http://www.reuters.com/article/2011/05/23/markets-stocks-ipos-idUSN2027158920110523
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Post - April 7, 2011
Mortgage REIT Primer - Analysis, What's Next, and Opinion
Mortgage REITs are an important part of the mortgage finance landscape and will likely grow in importance given the initiatives underway to shrink Fannie Mae and Freddie Mac. In addition a previous mortgage REIT model could reemerge to address tight credit conditions.
There are two basic types of mortgage REITs, identified by their assets: REITs that hold Agency MBS ("Agency REITs"), and REITs that hold 'credit pieces' of securitizations ("Credit REITs"). Of the Agency REITs, most hold either Fannie Mae or Freddie Mac MBS, and not Ginnie Mae MBS as they have long payment delays. Credit REITs typically securitize pools of loans, sell off the senior pieces of those securitizations, and retain the subordinate first-loss (credit) pieces.
There will likely be a rebirth of a third mortgage REIT type, the "Active REIT". Active REITs are typically closely associated with a mortgage originator and have the ability to create their own REIT portfolio investments.
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