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Mortgage REITs American Capital Agency (AGNC), Hatteras Financial (HTS), and Capstone Mortgage...

Mortgage REITs American Capital Agency (AGNC), Hatteras Financial (HTS), and Capstone Mortgage (CMO) have moved lower since the SEC announced on Wednesday it will seek comment on removing tax and leverage exemptions. Citi is doubtful the SEC will remove them, but cautions dividends would plunge if they do.
Comments (6)
  • SA Editor Stephen Alpher
    , contributor
    Comments (549) | Send Message
     
    sounds like the government is trying to get the mreits to play along with any mass refinancing program (not that they'd have much choice anyway)
    2 Sep 2011, 04:59 PM Reply Like
  • Tack
    , contributor
    Comments (14127) | Send Message
     
    MREITs have absolutely nothing to do with refinancing, as they don't initiate or fund mortgages. How is it that they're going to "play along?"
    2 Sep 2011, 05:31 PM Reply Like
  • SA Editor Stephen Alpher
    , contributor
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    Mreits own MBS which will get paid off as folks refi. The reits will then need to invest the proceeds at a lower rate. Thus, they will take losses.

     

    The billions in savings to homeowners don't just arrive out of thin air. It will be taken from the pockets of the owners of the mreits, as well as Fannie and Freddie (i.e. the taxpayer).
    2 Sep 2011, 06:14 PM Reply Like
  • Tack
    , contributor
    Comments (14127) | Send Message
     
    SA:

     

    Duh. But that's not the MREITs playing along. The existing mortgages get prepaid, and the MREITs are left with cash. They have nothing to say about it, so there's no rationale for any suggestion that the SEC's recent actions are a scheme to get MREITs to "play along." They're powerless.

     

    More rationally, the bank lawsuits and SEC suggestions are just symptomatic of the Government's ever-greater grasping for more cash. If the socialists in Obama's administration can't get Congress to raise taxes, then they'll just sue everybody and change the taxation rules, if possible.
    2 Sep 2011, 07:17 PM Reply Like
  • SA Editor Stephen Alpher
    , contributor
    Comments (549) | Send Message
     
    Relex, I mentioned they had little choice in the original post. However, while these guys are not JPM or GS, they are not without political cards to play on this issue. Their support (or at least lack of howling) will be helpful.
    3 Sep 2011, 01:33 AM Reply Like
  • kata
    , contributor
    Comments (687) | Send Message
     
    Record re fi's for the banks but qualifying is harder so the pool of potential re fi's is limited. That makes agency MReits a good buy at these reduced prices. The SEC can make all the proposals it wants because no one is going to pass them. Retirees have no where to go to make enough to live on and with fees on Medicare going no where but up expect Aarp et al to start making itself felt.
    4 Oct 2011, 02:59 PM Reply Like
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