Profits for High Yielding Annaly Capital and ARMOUR Residential REIT in Danger as Obama Offers New Mortgage Aid
February 29, 2012 08:20 ET
Profits for High Yielding Annaly Capital and ARMOUR Residential REIT in Danger as Obama Offers New Mortgage Aid
Five Star Equities Provides Stock Research on Annaly Capital Management & ARMOUR Residential REIT
NEW YORK, NY--(Marketwire - Feb 29, 2012) - Shares of high yielding REITs have been relatively flat this month. The Vanguard REIT ETF -- which tracks the performance of an index that measures the performance of publicly traded equity REITs -- is underperforming the Dow Jones Industrial in February with the latest problem for mortgage REITs involving government-backed refinancing programs for underwater homeowners, Forbes reports. Five Star Equities examines the outlook for diversified REITs and provides investment research on Annaly Capital Management, Inc. (
[ www.fivestarequities.com/NLY ]
[ www.fivestarequities.com/ARR ]
Earlier this year President Obama proposed to help about 3.5 million people with good credit that are unable to refinance at historically low rates because their homes are worth less than their mortgages. The Obama administration took steps last fall to help as many as 11 million underwater homeowners whose loans were backed or owned by Fannie Mae, Freddie Mac or the Federal Housing Administration, and now the administration wants to expand that program to the remaining underwater homeowners, whose loans are owned by banks or investors.
According to Forbes, Mortgage REITs stand to "lose millions in profits" if big numbers of the mortgages they're holding now are paid off early in favor of new, cheaper loans.
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Annaly Capital Management, Inc., a real estate investment trust, engages in the ownership, management, and financing of a portfolio of investment securities. The company presently pays an annual dividend of $2.28 per share for yield of around 13.7 percent.
ARMOUR Residential REIT, Inc. (ARMOUR) invest primarily in residential mortgage backed securities issued or guaranteed by a United States Government-chartered entity, such as the Federal National Mortgage Association (Fannie Mae) and the Federal Home Loan Mortgage Corporation (Freddie Mac), or guaranteed by the Government National Mortgage Administration, a United States Government corporation (Ginnie Mae). The company currently pays an annual dividend of $1.32 per share for a yield of around 18.6 percent.
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