- The U.S. mortgage industry remains depressed despite a boom in the broader property market.
- The mortgage company New Residential Investment Corp. has garnered significant interest from investors due to its high dividend yield and extremely diversified platform.
- Unlike most peers, New Residential has positive exposure to mortgage spreads and interest rates - likely boosting its book value from Q3 levels.
- While New Residential's risks are few, the company operates at high leverage with particularly significant exposure to non-agency assets which carry higher delinquency rates.
- If the U.S. property market proves to be overheated and reverses, New Residential's unique strategy may face rapid failure.
For further details see:
New Residential: Unique Hedging Strategy Results In Highly Concentrated Risk