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Insurer AIG intends to find and acquire residential whole loan mortgages as investments through a newly created business unit called Connective Mortgage Advisory Co.
Connective will create correspondent relationships with lenders, underwrite loans and support loan purchases.
The unit will leverage AIG’s ($44.69 0.16%) investment expertise and its United Guaranty mortgage insurance subsidiary’s knowledge of the mortgage market to identify whole loans as investments.
Connective plans to target residential first mortgage loans as long-term investments, with AIG managing the loan-servicing component.
"Direct investment in residential mortgage loans offers attractive investment returns and enables a proactive approach to managing mortgage risk," William Dooley, AIG executive vice president, investments and financial services said.
United Guaranty will be able to offer its risk-assessment tool to help Connective determine the quality of loans since it already utilizes this tool to price its mortgage insurance.
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