An executive at a real estate investment trust that invests in agency and non-agency MBS said proposed credit risk-sharing opportunities with Fannie Mae and Freddie Mac are among the type of investments his firm would like to buy into.
“They have signaled that they want to do some sort of transaction [of that type] this year,” said Jeff Winkler, SVP and co-chief investment officer of American Capital Mortgage Investment Corp. Winkler made his comments at a Keefe, Bruyette & Woods mortgage investor conference Tuesday afternoon.
As to how interested his company might be, Winkler said during a question and answer session that, “it’s going to come down to pricing” as well as “how much [they] are willing to sell.” The firm also will analyze the investment’s risk/reward prospects.
AmCap is a publicly traded REIT which currently yields 15%.
A strategic goal of the Federal Housing Finance Agency is to develop an alternative risk-sharing structure where private investors bear some of the agencies’ mortgage-backed securities credit risk.
Sources told ASR's sister publication, National Mortgage News recently that the FHFA would allow for risk sharing on both newly issued MBS and mortgages the two currently hold in portfolio. Several REITs are believed to be eyeing the concept.