Background information

Michael Nierenberg at the age of 55, is the chairman of the board, President and the Chief Executive Officer of New Residential Investment. This is a corporation that deals with the investment and management of mortgage assets and currently has a net worth estimated to at least 16.6 million dollars. Michael is also the Managing Director at Fortress.

Prior to working in New Residential Investment, Michael Nierenberg held a senior position at Bank of America Merrill Lynch where joined in 2008 and was tasked with all the transpiring trading and sales activities. This was not a dynamic switch from his job at JP Morgan where he was head of Global Securitized Products.

Investment Management

New Residential Investment Corp being a public estate investment trust traded on the New York Stock Exchange majorly operates through servicing and originations. It also works through residential securities and loans and thus experiences some challenges with interest fluctuations which may be brought up by factors likes tax considerations and the various rates of inflation to combat these fluctuations and take advantage of them to bring about investment opportunities.

New Residential Investment, spearheaded by Michael Nierenberg, has set up certain strategies like specializing in assets such as excess mortgage servicing rights (MSRs) which unlike other fixed rate debt instruments, appreciates in value when rates increase. Another added strategy is the acquisition of companies that have in-depth control over mortgage servicing and loan origination decisions.

Michael Nierenberg delving into service advances

The frequent cases of payments delayed or missed by homeowners are inevitable, and this is where service advances come in handy as they are the loans extended by residential mortgage servicers as liquidity in case of any defaulted mortgages.

New Residential investment in a bid to become waterproof requires service advances to be repaid first and hence puts them at a higher credit quality. The corporation, however, hopes that the delayed and missed scheduled payments will decrease paving an opportunity to use these advances to put up some investments in servicing assets that will be able to generate alluring yields.

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