Briefing
Assessing the Risks of Mortgage REITs
Walter, John R.; Pellerin, Sabrina; Sabol, Steven; Price, David A. (2013-11)
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.
Richmond Fed Economic Brief , Issue Nov

Working Paper
mREITs and their risks
Sabol, Steven; Walter, John R.; Pellerin, Sabrina (2013)
This paper examines the history of mREITs and their broader role in the REIT industry. Additionally, it reviews how mREITs operate, how they are regulated, the risks they face, how they manage these risks, and the dangers they pose for the broader financial system.
Working Paper , Paper 13-19

Journal Article
MBS Real Estate Investment Trusts: A Primer
Sabol, Steven; Walter, John R.; Pellerin, Sabrina (2013-07)
This article examines those real estate investment trusts (REITs) that invest predominantly in mortgage-backed securities (MBS) and fund themselves with repurchase agreements (repos)---so-called mortgage REITS, or mREITs. mREITs grew quite rapidly after the financial crisis that began in 2008 and have come to be significant players in the MBS and repo markets. We review how they operate, how they are regulated, their recent growth, the risks they face, how they manage these risks, and the dangers they may pose to the broader economy.
Economic Quarterly , Issue 3Q , Pages 193-227