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 (AIG) 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.