American International Group is entering the residential whole loan purchase business through a new business unit, Connective Mortgage Advisory Co. In a press release published today, the insurer said it will be using the expertise of its mortgage insurance subsidiary, United Guaranty Corp., to help identify and buy loans for its investment portfolio.

There are no plans for Connective to do any direct lending or securitization;  Connective will hold these loans as long-term investments and AIG will manage the servicing component, according to the press release.

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