Still Bullish On High-Powered REIT MFA Financial
By Bear Fight:MFA Financial, Inc. (MFA) is a real estate investment trust (REIT) that invests in mortgage-backed securities. MFA utilizes leverage to acquire its portfolio of Agency and non-Agency residential mortgage-backed securities. MFA utilizes repurchase agreements (repo), which are low short-term rates, to finance the acquisition of its mortgage-backed securities. MFA generates net income by maintaining a spread between the interest it earns on its investments and the cost of financing such investments.Agency REITs carry limited credit risk as securities are guaranteed by government sponsored entities. Agency REITs are subject to interest rate and refinance risk. As opposed to agency REITs, hybrid REITs invest in both agency and non-agency securities. Hybrid REIT managers have the flexibility to move between agency and non-agency securities to find the best risk/reward for shareholders.
What Makes MFA Interesting?
As opposed to peers such as Annaly Capital and American Capital Agency, MFA management has the flexibilityComplete Story »