The REIT deployed $152 million of capital for its investment portfolio in the third quarter, with about half of the purchases concentrated on re-performing loan securities issued by Freddie Mac.
Redwood Trust’s investments have generated returns of around 12% so far this year. The REIT is increasing acquisitions of re-performing loan securities issued by Freddie Mac.
FHFA Director Mark Calabria said any revised qualified mortgage rule introduced by the CFPB should be applicable to all lenders. Industry participants are unsure how the regulator will address the issue.
The majority of expanded-credit MBS this year has been filled with Alt A loans that tend to have higher credit scores and are underwritten with alternative documentation.
Issuers of expanded-credit MBS have significantly increased deal volume this year without reducing underwriting standards in terms of traditional credit characteristics. Average credit scores for loans in the transactions have actually improved this year.