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Volume 2014 - Number 6

February 14, 2014

Rates Weren’t Expected to Fall, but Now That They Have, MBS Values Have Perked Up

Rising interest rates may help boost the fortunes of real estate investment trusts that focus on investing in residential MBS by increasing the value of their portfolios. Mortgage REITs had a rough year in 2013, as their stock prices declined an average 10 percent while the Standard & Poor’s Index rose 29 percent. It was thought that “tapering” by the Federal Reserve would cause rates to rise – which they did for a short while – but now the reverse has happened, thanks in large part to recent weak employment numbers. Late this week, the yield on the 10-year Treasury was...

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This weekly covers the secondary mortgage market, including mortgage-backed securities and asset-backed securities.



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After the November elections, how long will it take for a new Congress and White House to pass GSE reform legislation?

I’m confident a bill will be passed the first year.


2 to 3 years. GSE reform is complicated.


Sadly it won’t happen in a Clinton or Trump first term.


Not in my lifetime.


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