Briefing

Assessing the Risks of Mortgage REITs


Abstract: Regulators have expressed concern about the growth of a category of real estate investment trusts (REITs) that today invest primarily in mortgage-backed securities (MBS). These companies, known as mortgage REITs, or mREITs, have increased both in number and in asset size since the financial crisis, benefiting from federal guarantees and other support for MBS and from favorable regulatory treatment that allows high levels of leverage. While mREIT investors face significant risks, the level of risk that mREITs present to the financial system as a whole is unclear.

Keywords: Economic Stabilization; Financial Markets; Mortgages;

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Provider: Federal Reserve Bank of Richmond

Part of Series: Richmond Fed Economic Brief

Publication Date: 2013

Issue: Nov