Nomura Cites Risk Variations in Ginnie REMICs

Ginnie Mae real estate mortgage investment conduit securities with relatively high percentages of health care loans appear to have less call risk for investors than REMICs with lower percentages of such loans, according to a researcher at Nomura Securities International Inc."For the investors purchasing long average life sequentials and last cash flow Z-bonds, as well as interest-only tranches backed by [Ginnie Mae] project loans, there is clearly extra value in choosing REMIC tranches backed by collateral with a high percentage of health care loans," said Art Frank, director of mortgage-backed securities research, in a recently released Ginnie Mae multifamily research report. Mr. Frank wrote the report with contributions from James Frohnhofer and Nathaniel Jacob.