Time to Get Concerned About Annaly?

One concerning factor to consider for Annaly Capital investors.

Matt Koppenheffer
Matt Koppenheffer
Feb 8, 2013 at 2:00PM
Financials

In the following video, Motley Fool financial analyst Matt Koppenheffer takes a deep look at Annaly Capital's (NYSE:NLY) earnings report. While a lot of the report initially seemed very positive, Matt highlights one factor he found somewhat worrying: prepayments. When mortgage borrowers pay back their loans early, mortgage-backed security investors like Annaly suffer because they don't get to collect the interest that was expected over the life of the loan. As of Q4, Annaly continues to struggle with a relatively high prepayment rate in its MBSes. Matt details this headwind for Annaly and also gives some of the more positive takeaways from the company's earnings.