In this video, Motley Fool financial analyst Matt Koppenheffer takes a look at some new numbers from the Mortgage Bankers Association regarding mortgage application rates and refinancing rates as a percentage of mortgage activity.
One of the biggest risks facing mortgage REITs is early payback of the principal on a mortgage, which means the loss of interest paid over time. A decrease in refinancing rates goes hand in hand with a decrease in early payback rates. And as the MBA has reported exactly that, albeit a small decrease, this is good news for mortgage REIT investors. Matt gives further detail on why the MBA's report was good news and which companies might be affected.