Amherst Securities finds mortgage bonds attractive, interest growing

Mortgage investments are getting more alluring, said Laurie Goodman, senior managing director of Amherst Securities, in a Tuesday teleconference, “Outlook and Opportunities in the RMBS Market.” “In a world where every investor is looking for yield, mortgages look pretty attractive relative to corporates, Treasurys,” Goodman said. “We think that current agencies look reasonably attractive to banks. Banks have lots of money to invest. Banks have the funds to invest.” But there are many drags on the market. Mortgage origination capacity is running around 1997, 1998 levels. But what’s more notable is that it takes much longer than anytime this century to process mortgage applications. There are also investor questions on prepay behaviors, which the teleconference sought to quantify. Also, there is a risk of loan-level price adjustment on the agency level, Goodman said. On Oct. 28, Goodman spoke at a HousingWire webinar, where her view of the nation’s housing market painted a bleak picture in which one in five homeowners may be at risk of losing their home. Write to Jacob Gaffney. The author holds no relevant investments.