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98 98 GOVERNMENT INVESTMENT PROPERTY PRESERVATION SERVICING TECH THE ASSET GENERATING POWER OF SFR e Redwood Trust has closed its first single-family rental (SFR) securitization since its acquisition of CoreVest. is transaction, CAFL 2019-3, closed on November 14, and marks the tenth and largest securitization for CoreVest since it launched its first deal in 2015. Additionally, Redwood closed its 103rd Sequoia securitization, SEMT 2019-5, backed by a pool of Redwood select jumbo loans. Redwood had acquired CoreVest, an originator of business purpose residential loans in October this year and included the company's securitization platform. "A significant strategic element of the acquisition of CoreVest is their best-in-class SFR securitization platform. We are excited to now have the two largest and most highly- regarded issuance platforms in the housing market as part of the Redwood family," said Christopher Abate, CEO, Redwood. He added that the company's ability to simultaneously market and close two distinct offerings under its CoreVest and Sequoia brands "further solidifies our conviction that the combined power of our operational platforms will accelerate our strategy to grow profitably and organically generate assets with attractive risk-adjusted returns." e company has also made progress in integrating the CoreVest platform since its acquisition. "In just four weeks, we have already demonstrated the asset generating power of the platform," said Dashiell Robinson, President, Redwood. "We are excited to offer diverse residential credit investment opportunities to our fixed income investors while providing liquidity in the housing market and attractive financing for both traditional homeowners and housing investors." According to Elizabeth O'Brien, CEO, Corevest, this deal as part of the Redwood brand underscored the strength of investor demand from CoreVest's traditional base and the expanded number of investors focused on residential credit. "As the single-family rental market continues to mature, we look forward to continuing to provide attractive assets to this market," she said. Q3 BUILT- FOR-RENT VOLUMES SLIP e number of single-family homes built- for-rent posted a small decline during third quarter of 2019, according to the National Association of Homebuilders (NAHB). is market has received recent attention as a means to add single-family inventory amid concerns over housing affordability and down payment requirements in the for-sale market. According to NAHB's analysis of data from the Census Bureau's Quarterly Starts and Completions by Purpose and Design, there were 11,000 single-family built-for-rent starts for the third quarter of 2019. is is lower than the 14,000 estimated for the third quarter of 2018 however. Over the last four quarters, 41,000 such homes began construction, which is lower than the 45,000 estimated SFBFR starts for the four quarters prior to that period. Given the small size of this market segment, the NAHB notes that the quarter-to- quarter movements typically are not statistically significant. e current four-quarter moving average of market share (4.5%) remains higher than the recent historical average of 2.7% (1992-2012) but is down from the 5.8% reading registered at the start of 2013. As measured for this analysis, this class of single- family construction excludes homes that are sold to another party for rental purposes, which NAHB estimates may represent another two percent of single-family starts. e estimates in this post only include homes built and held for rental purposes. With the onset of the Great Recession and declines in the homeownership rate, the share of built-for-rent homes increased. Despite the current elevated market concentration, the total number of single-family starts built-for-rent remains small in terms of the total size of the building market. However, a new study from Cornell authored by Suzanne Lanyi Charles, assistant professor of city and regional planning, identified how these rental trends impact housing, from more unaffordable housing and household instability to increased rents and evictions, depressed house prices, and deferred maintenance. "Single-family rental housing is an increasingly prevalent form of housing tenure in U.S. suburban neighborhoods, representing a paradigm shift in how households gain access to a suburban single-family home," Charles wrote. Charles notes that in an attempt to stabilize neighborhoods hit hard in 2008, foreclosed single-family houses were sold off in bulk to large corporations. Increases in suburban single-family rental housing may provide households access to neighborhoods that are otherwise off-limits to renters, Charles said, but the reverse is also true. Charles notes that while policymakers including Democratic presidential candidate Elizabeth Warren have proposed legislation limiting large-scale institutional investment in single-family rental housing.

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