AIG looking at buying home loans-FT
April 1 |
April 1 (Reuters) - Bailed-out insurer American International Group is looking at the possibility of purchasing whole loans as another investment vehicle, leveraging the growing market share of its mortgage insurance business, the company's chief executive said in an interview with the Financial Times.
"We're now thinking about maybe we should try to find a way to buy the mortgages that we're insuring," Bob Benmosche told the paper.
AIG's mortgage insurance unit, United Guaranty or UGC, has recently become the largest in its industry, as competitors have faltered amid the pressure of bad bubble-era loans.
With investment returns at a relative pittance, insurers like AIG have been looking for safe alternatives to boost income. There have been rumors in the market for more than a year about insurers buying whole loans as a way to diversify their portfolios and increase exposure to the housing market (without buying mortgage-backed securities).
Benmosche told the paper any such program, if it happens, would not start until the fourth quarter.
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