- Bank considers a credit-risk transfer backed by mortgages
- Regional lender’s shares have plunged on real estate concerns
New York Community Bancorp has been reaching out to investors for capital to finance a large portfolio of residential mortgages as pressures on the regional lender mount, according to people with knowledge of the matter.
The company is seeking third-party capital that would inject liquidity into a portfolio of residential mortgages held under its Flagstar Bank unit. Among the options, the institution is considering pursuing a synthetic risk transfer backed by a portfolio of about $5 billion of home loans originated when interest rates were lower, said the people, who asked not to be identified discussing information that isn’t public. In a synthetic securitization, banks offload their exposure to loans by effectively transferring the risk of the assets to the buyer.
No comments:
Post a Comment
Note: Only a member of this blog may post a comment.