3 High Yield Mortgage REITs Running Very Different Playbooks
Three Mortgage REITs stand out with distinct strategies: Two Harbors Investment, Cherry Hill Mortgage Investment, and Invesco Mortgage Capital. Two Harbors Investment is winding down through a merger, Cherry Hill Mortgage Investment is being absorbed by MITT at a premium, and Invesco Mortgage Capital remains an active operator with a growth-focused approach.
The backdrop includes a high 10-year Treasury yield and near-6.67% 30-year mortgage rates, impacting prepayment speeds, MSR valuations, and Agency spread carry. Each REIT occupies a unique position in the market, with Two Harbors Investment focused on merger arbitrage, Cherry Hill Mortgage Investment relying on a hybrid RMBS and MSR portfolio, and Invesco Mortgage Capital maintaining a pure-play Agency MBS shop.
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