Recent Performance Review Of 5 High-Yield Hybrid Mortgage REITs

By Zvi Bar:Mortgage REITs invest in residential mortgage backed securities. While agency mREITs only invest in RMBSs with the backing of a federal agency, non-agency or hybrid mREITs also hold portfolios of RMBSs without any such agency insurance. Non-agency paper generally offers a substantially higher yield compared to agency-backed RMBSs, but also carries with it the risk of borrower default. Generally, most non-agency RMBSs are presently rated as junk.

By Zvi Bar:Residential mortgages are generally divided into two primary subdivisions: Mortgages insured by federal agencies and those without agency backing. Hybrid mortgage REITs hold both types of RMBS. Non-agency RMBSs are generally higher yielding than agency RMBSs, but also present the risk of borrower default. Both have their place in income portfolios. A good deal of non-agency paper is rated as junk, while agency-backed paper is gets a rating commensurate with the nation's implied guarantee.

By Zvi Bar:Hybrid mortgage REITs invest in residential mortgage backed securities. While agency mREITs only invest in RMBSs with the backing of a federal agency hybrid mREITs also hold portfolios of RMBSs without agency insurance. Non-agency RMBSs offer considerably higher yields when compared to agency-backed RMBSs, but also carry with them the significant risk of borrower default.

By Zvi Bar:Residential mortgages are generally divided into two primary subdivisions: mortgages insured by federal agencies and those without agency backing. Hybrid mortgage REITs hold both types of RMBS. Non-agency RMBSs are generally higher yielding than agency RMBSs, but also present the risk of borrower default.

By Zvi Bar:In this low interest rate environment, many investors feel obligated to seek out large yields that can supplement the lack of cash-flow being generated through the risk free returns of cash and Treasury investments. One controversial, yet an incredibly high-yielding investment is found within non-agency and/or hybrid mortgage REITs.

By Zvi Bar:In this near-zero interest rate environment, many investors feel obligated to seek out alternative yields that may supplement a lack of cash flow through risk free returns of cash and Treasury investments. One controversial yet incredibly high-yielding investment is found within non-agency and/or hybrid mortgage REITs.

By Zvi Bar:Residential mortgages are usually initially divided into two primary subdivisions: (1) Mortgages insured by federal agencies; and (2) Mortgages without agency backing. Hybrid mortgage REITs hold both types of RMBS. Non-agency RMBSs are generally higher yielding than agency RMBSs, but also present the risk of borrower default. Both have their place in income portfolios.

By Zvi Bar:Mortgage REITs own mortgages on real estate. Within the world of residential mortgage REITs, there are two primary types: those holding residential mortgage backed securities insured by federal agencies and those that own RMBSs without agency insurance. Many subcategories and hybrid types also exist.