Dividend Investor Boot Camp, Part 2: Non-Agency Mortgage REITs - Seeking Alpha
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In Dividend Investor Boot Camp: ABCs of Mortgage REITs, we reviewed Agency Mortgage REITs - real estate investment trusts (REITs) which invest exclusively or almost exclusively in government agency guaranteed pools of securitized residential mortgages. Because of the government agency guarantee, there is little or no risk of default and this has supported relatively high levels of leverage and has provided some very attractive dividend yields because of the "spread" between the relatively low interest these companies have to pay on their borrowings and the higher interest rate they can earn on the residential mortgage securities they own. The major risk associated with investing in these companies is interest rate risk.
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