One investment bank’s strategy of riding out the interest rate storm by holding underperforming mortgage-backed securities in its portfolio seems to have failed. Friedman, Billings, Ramsey recently decided to sell part of its MBS portfolio, a move that will deliver a substantial hit to its 2005 earnings. The Virginia-based firm said continuing short-term rate increases by the Federal Reserve Board and the associated flattening of the yield curve influenced the decision. …