January 30, 2013
In this video, Foolish financial analyst Matt Koppenhaffer gives a word of caution regarding mortgage REITs. To be sure, the double digit dividends paid by these firms is appealing. However, many mortgage REITs invest in repurchase financing agreements that generate minimal returns. Even though these REITs are not heavily leveraged relative to banks, Matt believes many investors may be underestimating the risk/reward ratio these REITs possess.
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