Mortgage REITs Industry
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The mortgage REIT industry invests in mortgage-backed securities on a leveraged basis and passes on the investment returns to investors via dividends. REITs are tax-advantaged vehicles, as they’re not taxed at the corporate level—provided they dividend nearly all their income. They’re also involved in purchasing distressed mortgages and real estate assets, mortgage origination, and servicing.
Top 10 Value Drivers for Mortgage REITs
Must-know analysis: Can mortgage REITs be too big to fail?
The biggest names in the REIT sector are Annaly (NLY) and American Capital Agency (AGNC). They bear no credit risk, but they do bear a lot of interest rate risk.
Why did Ginnie Mae TBAs sell off in sympathy with the 10-year?
The stronger-than-expected economic data last week sent bond yields lower, which increased mortgage rates as TBAs sold off with bonds.
A puzzle in mortgage rates
Mortgage rates are generally set by the TBA market which trades with the 10-year bond Mortgage rates generally follow interest rates pretty closely. The most important security for mortgage originators…
Comparing different house price indices and their impact on REITs
Different real estate indices follow their own distinct methodologies There are several widely used real estate indices that professionals use to monitor the markets. The most widely known and used…
Why refinance applications tanked and policy could have an impact
The Refinance Index fell 17.5% (from 1,942 to 1,602) even though rates were flat. The MBA reported that the share of refinance applications fell to 63.2%.
Recommendation: What the shutdown means for mortgage originators
Mortgage originators are in a tough environment After feasting on the refinance boom of 2012, mortgage originators are finding 2013 to be a much more inhospitable environment. Many banks had…
Why watch REITs and homebuilders this week? Key political activity
We will hear from Toll Brothers (TOL) this week, which will give us an idea of how the luxury end of the homebuilding market is going.
Non-agency REIT Redwood Trust’s book value per share dips slightly
Redwood Trust is a non-agency mortgage REIT that focuses on mortgage banking activities and invests in mortgages and other real estate–related assets.
Why slowing home price growth since the summer affects some REITs
The CoreLogic index of real estate prices increased 12.5% year-over-year in October. CoreLogic recently bought the Case-Shiller indices.
Why declining delinquencies are good for mortgage REITs
Mortgage delinquencies are falling as home prices rise and the foreclosure pipeline clears. Declining delinquencies mean good things for non-agency REITs.