An expected drop in the conforming loan limit could make new nonagency mortgages more compelling, according to executives at Invesco Mortgage Capital Inc.
"We think the opportunities in the residential loan space are just going to get bigger," Don Ramon, chief financial officer, told attendees at the National Association of Real Estate Investment Trust's annual meeting in New York. He said Wall Street is getting more interested in nonconforming mortgages again.
The drop in the loan limit could add impetus to interest in securitizing in that space, but whether that interest would be enough to make nonagency residential mortgage securitization possible while new regulations surrounding the process are still uncertain is unknown, CEO Rich King told this publication.
Dodd-Frank regulations surrounding residential mortgage securitization aren't expected to be fully in effect until 2012, but King said he thinks the nonagency market could make a comeback before that time.
