Here's the Next Stock I'm Going to Buy

Last week, the government-sponsored entities Fannie Mae and Freddie Mac made an announcement that has mortgage originators buzzing. The companies announced that they have been given a 7% cap on investment properties and second homes by the Federal Housing Finance Agency (FHFA). This directive was issued in the waning days of the Trump administration, and was meant to limit the risk that the U.S. taxpayer bears in the housing market.

I recently wrote about New Residential Investment Corp. and how this change would benefit it. There is another mortgage REIT that stands to benefit as well: Redwood Trust (NYSE: RWT). I plan on buying shares as soon as Motley Fool trading rules allow. Here's why.

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Source Fool.com