-Fri, 08/16/2024 - 13:08

Residential Mortgage Loans: A Compelling Investment Opportunity

Key Takeaways

  • US insurance companies have historically been under-allocated to residential mortgage loan (RML) investments
  • Recently, insurance portfolios have become active in Non-QM loans with operational responsibilities managed externally
  • Insurance companies benefit from attractive Federal Home Loan Bank (FHLB) financing of RML collateral
  • Significant increases in annuity sales have been a factor driving insurance investment demand for high-quality RML assets
  • Insurance demand for RMLs will continue, driven by excess returns, strong credit quality, and efficient capital treatment

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