Wall Street is collecting rent payments

Redwood Trust, one of Wall Street’s largest securitizers of mortgage bonds, is now packaging bonds backed by rent payments.

Dec.December 06, 2019 03:45 PM
Redwood Trust’s CEO Christopher J. Abate (Credit: iStock)

Redwood Trust’s CEO Christopher J. Abate (Credit: iStock)

Wall Street wants your rent.

Redwood Trust, one of Wall Street’s largest securitizers of mortgage bonds, is now packaging bonds backed by rent payments. The move marks a broader interest by Wall Street in rental properties amid of rise of home purchased by institutional landlords, rather than families or individual owners.

Doubling down on this bet, in October, Redwood paid $490 million to purchase CoreVest American Finance LLC, which is a lender to landlords. And the company recently sold a $376 million bond package backed by rent payments.

With its acquisitions, Redwood could originate more than $3 billion of loans to landlords and house flippers in 2020, according to the Wall Street Journal.

Investors are increasingly making up a larger part of the homeownership market. Purchases by such investors looking to flip or act as landlords accounted for more than 11 percent of U.S. home sales in 2018, their highest share on record, according to the Journal.

The first to try to take advantage of this trend was in 2013 when Blackstone Group’s Invitation Homes Inc. and American Homes 4 Rent, had begun to sell bonds backed by rent payments for thousands of homes they bought and leased out. [WSJ]Keith Larsen

Related Articles

With a cooling trade war, stocks perform well, including real estate. (Credit: iStock)

Real estate stocks push up this week as U.S.-China trade tensions ease

416 West 25th Street and Maverick Real Estate Partners principal David Aviram (Credit: Google Maps and LinkedIn)

Chelsea landlord claims “predatory” lender is charging a crippling interest rate as punishment after losing foreclosure case

From left: 172 Madison Avenue, 100 East 53rd Street, Woolworth Tower, 53 West 53rd Street, 615 10th Avenue

Loan wolves: Bankers are stalking developers as debts come due

Pope Francis (Credit: WIkipedia, iStock)

Unholy real estate strategy: Catholic churches shuffle properties to shield billions from sex abuse victims, report says

(Credit: iStock)

Real estate created the Chinese elite. Here’s what happens next

160 Imlay Street

Est4te Four gets $74M inventory loan for Red Hook condo

As crowdfunding startups rethink their business model, many are becoming more like traditional real estate investment firms (Credit: iStock)

To survive, crowdfunding firms are remaking themselves

1633 Broadway, 55 Hudson Yards, and 650 Madison Avenue (Credit: Google Maps)

A pair of billion-dollar refis tops the list of Manhattan’s largest real estate loans in December