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These 4 Mortgage REITs Are ‘in Limbo,’ According to KBW
Four publicly traded vehicles that invest in residential mortgages are now “in limbo,” says Keefe, Bruyette & Woods.
One challenge for would-be investors now is figuring out how much value would be left in the worst-case scenario—if the vehicles liquidate.
U.S. mortgage real-estate investment trusts had a rough March, falling 57% on aggregate. Because mortgage REITs use leverage to boost their yields, severe market volatility took an especially large toll on that sector as some of those firms were forced to unwind trades and sell securities. That forced selling further depressed the price of the mortgages they use as collateral.
Eventually, four mortgage REITs announced that they could not meet margin calls, and had to, in effect, default on their side of short-term funding trades: AG Mortgage Investment Trust (ticker: MITT), MFA Financial (MFA), New York Mortgage Trust (NYMT), and Invesco Mortgage Capital (IVR).
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https://www.barrons.com/articles/4-resid...yptr=yahoo
Four publicly traded vehicles that invest in residential mortgages are now “in limbo,” says Keefe, Bruyette & Woods.
One challenge for would-be investors now is figuring out how much value would be left in the worst-case scenario—if the vehicles liquidate.
U.S. mortgage real-estate investment trusts had a rough March, falling 57% on aggregate. Because mortgage REITs use leverage to boost their yields, severe market volatility took an especially large toll on that sector as some of those firms were forced to unwind trades and sell securities. That forced selling further depressed the price of the mortgages they use as collateral.
Eventually, four mortgage REITs announced that they could not meet margin calls, and had to, in effect, default on their side of short-term funding trades: AG Mortgage Investment Trust (ticker: MITT), MFA Financial (MFA), New York Mortgage Trust (NYMT), and Invesco Mortgage Capital (IVR).
...
https://www.barrons.com/articles/4-resid...yptr=yahoo
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