Mortgage REITs Under Pressure May Drive MBS Volatility

28 Jun 2013

U.S. agency mortgage real estate investment trusts that rely heavily on repo funding may come under pressure to liquidate, and consequently drive up volatility in mortgage-backed securities, if repo lenders tighten their terms as a result of higher interest rates, according to Fitch Ratings.

U.S. agency mortgage real estate investment trusts that rely heavily on repo funding may come under pressure to liquidate, and consequently drive up volatility in mortgage-backed securities, if repo lenders tighten their terms as a result of higher interest rates, according to Fitch Ratings.

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