According to a recent Investment News report, real estate investment trusts that buy mortgage debt slumped recently after a better-than-forecast employment report stoked speculation that the Federal Reserve may begin to reduce the size of its asset purchases and/or allow for interest rates to rise.
A Bloomberg index of shares in the REITs tumbled 3.9 percent at the end of trading day on Friday, the biggest drop since October 2011.
Some REITs that may be impacted (by virtue of their large mortgage holdings) are as follows:
|American Capital Agency Corp.|
|American Capital Mortgage Investment Corp|
|Annaly Capital Management, Inc.|
|Apollo Commercial RE Finance, Inc.|
|Arbor Realty Trust, Inc.|
|Ares Commercial Real Estate Corporation|
|ARMOUR Residential REIT|
|Blackstone Mortgage Trust, Inc.|
|Capstead Mortgage Corporation|
|Chimera Investment Corporation|
|Colony Financial, Inc.|
|CYS Investments, Inc.|
|Dynex Capital, Inc.|
|Hannon Armstrong Sustainable Infrastructure Capital, Inc.|
|Hatteras Financial Corp|
|Invesco Mortgage Capital Inc.|
|IStar Financial Inc.|
|MFA Financial, Inc.|
|Newcastle Investment Corporation|
|NorthStar Realty Finance Corporation|
|Owens Realty Mortgage, Inc.|
|PMC Commercial Trust|
|RAIT Financial Trust|
|Resource Capital Corp.|
|Starwood Property Trust, Inc.|
|Two Harbors Investment Corp.|
|Western Asset Mortgage Capital Corporation|
Brokerage firms that recommend mortgage REITs (like with any other investment they recommend) are required to perform due diligence on the investment before recommending it and to ensure that the investment is suitable for a particular investor in light of that investor’s age, investment objectives, income, net worth, and investment experience. Given the current risk of devaluation of these REITs, such investments are likely only suitable for wealthy and/or sophisticated investors.
If you have suffered losses in a mortgage REIT, please call the securities attorneys of The White Law Group at 312/238-9650 for a free consultation.
The White Law Group is a national securities fraud, securities arbitration, and investor protection law firm with offices in Chicago, Illinois and Boca Raton, Florida.
For more information on the firm, visit http://www.whitesecuritieslaw.com.