Insurance companies and European investors have shown a growing interest in MBS backed by expanded-credit mortgages. However, there is not enough supply to meet demand.
Falling interest rates are fueling optimism over growth in the fix-and-flip lending space this year, but competition from new homebuilders may dampen market expectations.
Activity in the sector is expected to pick in the coming months as DBRS is close to establishing criteria to rate securitizations of residential transition loans.