(go to previous page) (go to beginning)
The benefit to customers
A REIT is a true portfolio lender. As opposed to their mortgage-banking competitors, who must sell every loan they originate, REITs can use discretion and take loans into their portfolio that are good credit risks but that might not fit secondary market guidelines. This means that when dealing with a REIT, mortgage brokers and their account executives can preview loans that do not fit published guidelines and possibly get a pre-approved exception.
The creation of the mortgage-REIT industry and the implementation of the REIT Modernization Act added a new dynamic to the mortgage market. As a result of the act, new competitors to traditional mortgage banks have emerged on the scene.
The new investors in mortgage assets are heavily capitalized and have portfolio power. Unlike mortgage banks, REITs can consider loans from an investment standpoint, so it is to every broker's advantage to get approved to originate for these new mortgage investors. This will bring the power of the portfolio to the mortgage brokers. It also will allow them to close loans that they would have been unable to close in the past because they did not meet secondary guidelines.
In today's market, where the role of REITs is growing steadily, the name of the game is flexibility. And that's good news for investors, lenders, brokers and their customers -- you can bank on it.
Richard Payne, a 25-year veteran of the industry, is the president of the wholesale division of The New York Mortgage Co. LLC (NYMC), the first private mortgage banker to convert to a mortgage REIT by way of an initial public offering. In 2005, its principals formed New York Mortgage Trust Inc., which went public and simultaneously acquired NYMC as a TRS. E-mail Payne at email@example.com.
Page: 1 2 3 Previous