RMBS left over from the wreckage of the subprime crisis are finding renewed favor with investors, siphoning off demand for new mortgage-backed instruments by offering juicier yields.
Once the darlings of the market – and then later the pariahs – these legacy deals are now denting demand for the new breed of single family rental (SFR) securitizations and risk-share trades.
“In legacy subprime you can still find bonds with credit enhancement,” said Harrison Choi, co-head of the securitized products division of TCW.
“If you pick the right ones, there are bonds that could return par or all of your principal,” he said.
via Legacy RMBS hold upper hand over new mortgage trades | Reuters.
