REIT - Mortgage

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Mortgage REITs invest in the ownership of property mortgages. These REITs loan money for mortgages to real estate buyers, or purchase existing mortgages or mortgage-backed securities. Revenues for mortgage REITs consist primarily of the interest that they earn on the mortgage loans.

Mortgage REITs generally fall within two categories. One category acts like arbitrageurs by investing in mortgages and mortgage-backed securities, often with significant leverage, and trying to profit from the “spread” between the yield produced by assets they hold and their costs, including interest costs from leverage. These types of companies are known as "passive" mREITs. The other category acts like banks by originating, holding and securitizing mortgages and mortgage-backed securities. These types of companies are known as "active" mREITs.

Mortgage REITs are also separated by focus; they are either residential-focused or commercial-focused, and a few mortgage REITs hold some of both types.

[edit] REITs that Invest in Mortgages

Following are a listing of the current mortgage REITs by type:

[edit] Residential-Focused Investors, Prime

• Annaly Capital Management (NLY)
  
• America First Mortgage Investments (MFA)
  
• Capstead Mortgage (CMO)
  
• Anworth Mortgage Asset (ANH)
  
• Bimini Mortgage Management (BMNM)
  
• New York Mortgage Trust (NYMT)
  

[edit] Residential-Focused Investors, Alt-A, Subprime, and Subordinate RMBS

• Redwood Trust (RWT)
  
• Luminent Mortgage Capital (LUM)
  
• Hanover Capital Mortgage Holdings (HCM)
  
• Friedman, Billings, Ramsey Group (FBR)
  
• ECC Capital, Inc. (ECRO.PK)
  
• Capital Alliance Income Trust (CAA)
  

[edit] Residential-Focused Originators, Prime and Alt-A

• Thornburg Mortgage (TMA)
  
• Impac Mortgage Holdings (IMH)
  
• Origen Financial (ORGN)
  

[edit] Commercial-Focused Investors

• American Mortgage Acceptance Company (AMC)
  
• Anthracite Capital (AHR)
  
• JER Investors Trust (JRT)
  

[edit] Commercial-Focused Originators

• Arbor Realty Trust (ABR)
  
• BRT Realty Trust (BRT)
  
• Capital Trust (CT)
  
• Gramercy Capital (GKK)
  
• PMC Commercial Trust (PCC)
  
• IStar Financial (SFI)
  
• Northstar Realty Finance (NRF)
  
• CBRE Realty Finance (CBF)
  

[edit] Diversified Investors

• Alesco Financial (AFN)
  
• Crystal River Capital (CRZ)
  
• Deerfield Capital (DFR)
  
• Dynex Capital (DX)
  
• Newcastle Investment (NCT)
  
• RAIT Financial Trust (RAS)
  
• Resource Capital (RSO)
  

[edit] Issues Affecting Mortgage REITs

The securitization market that supports the nonrecourse, match funding element that most mREITs employ is essentially frozen. Mortgage REITs currently have to fund their portfolios by issuing common equity or utilizing repurchase agreements with large investment banks. Because the cheap funding that produces an interest-rate spread for mortgage REITs is not currently available, the sector has completely dislocated at this time.

Companies in the REIT - Mortgage Industry (25)