Mortgage securities rebound as Fed starts buying, concerns persist
March 30, 2020 | Herbert Lash | Reuters
NEW YORK (Reuters) – Mortgage-related shares rose and volatility dropped on Friday, a sign moves by the Federal Reserve had some positive effect on liquidity and coronavirus-related panic about securities linked to commercial and residential loans.
Mortgage Real Estate Investment Trusts (REIT) have been slammed this month on concerns that non-payment of loans will rise as U.S. economic activity grinds to a halt, and that the Fed is focusing its attention on thawing the market in U.S. Treasury debt and not enough on mortgage-backed securities.
Last weekend, Thomas Barrack, executive chairman of real estate investment company Colony Capital Inc. (CLNY.N), said the U.S. commercial real estate mortgage market “stands on the brink of collapse”, and predicted “domino effect” of catastrophic consequences if banks and the government didn’t take immediate action on COVID-19.
