Forced selling by mREITs leading to an ugly cycle in mortgage prices is just what had many...

|By:, SA News Editor

Forced selling by mREITs leading to an ugly cycle in mortgage prices is just what had many concerned about systemic risks posed by the industry. MReits (REM) sold about $30B in MBS last week to keep leverage ratios steady in the face of diving book values, says JPMorgan, exacerbating already weak security prices (MBB). Annaly's (NLY) CEO has characterized systemic worry as equivalent to misguided frenzies about shark attacks, and Hatteras' (HTS) CFO and Dynex's (DX) CIO have seen no changes in the repo market (which the companies rely on for funding).