ABR - Arbor Realty

[cameronfen]

I haven't done much work in this but I'm wondering if people think mortgage REITs look interesting.  People are really negative on something like Arbor Realty because I assume the origination business is going to tank when rates go up.  I don't think this is true.  The correlation between originations and interest rates is basically zero (and actually positive but not statistically significant).  In a vacuum raising rates will lower origination volumes, but usually, rates rise with better economy.  A better economy means more home buyers which result in more originations.  Insiders have been buying a lot, but there has been some insider selling too.  The dividend yield is 10% but it could be picking up pennies in front of a steamroller.  I will look more in detail but curious if people with more knowledge had anything to say. 

[Spekulatius]

I don’t like mortgage Reits. Many have blown up in the past, interest rate risk is very hard to manage. It just feels like a bad business model. I would rather own Reits that hold hard assets.