Monetary Matters with Jack Farley
Hidden Mortgage Market Shifts Are Creating Opportunities | Matt Jozoff of Trevally Capital
Apr 24, 2025
Matt Jozoff, co-CEO and Head of Macro Research at Trevally Capital, shares insights on the booming Ginnie Mae market and its shift towards non-bank lenders. He highlights how low-credit borrowers and rising interest rates are reshaping mortgage prepayments, leading to unique investment opportunities. Jozoff emphasizes the role of strategic partnerships and analytics in navigating this complex landscape. With a focus on securing alpha and building a world-class asset management firm, he discusses the transformative potential within today's mortgage market.
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Quick takeaways
- The significant growth of the Ginnie Mae market highlights the increased presence of low-credit borrowers, posing both risks and opportunities in the mortgage landscape.
- Recent market volatility and the dominance of non-bank lenders are reshaping investment strategies, emphasizing a need for careful analysis of prepayment risks in mortgage-backed securities.
Deep dives
Growth of the GMA Market
The GMA market has expanded significantly, growing from a $500 billion market in 2009 to a $2.5 trillion market today. This growth indicates a substantial increase in the volume of borrowers, many of whom fall into lower credit categories. These borrowers often receive mortgage rates that they might not have access to in the private sector, leading to higher rates of delinquencies and defaults compared to better-underwritten mortgages. The lending landscape has also shifted dramatically, with non-banks now making up 80% of lenders, contrasting with the previous dominance of banks.
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