Review of REIT and MBS
Journal
Encyclopedia of Finance, Third Edition
Pages
835-848
ISBN
9783030912314
Date Issued
2022
Author(s)
Wu, Chou Yen
Abstract
In this chapter the history and the success of Real Estate Investment Trusts (REITs) and Mortgage-Backed Securities (MBS) in the US financial market are discussed. REITs had both great losses during financial crisis of 2008–2009 and the COVID-19 pandemic of 2020. They enhanced their financial positions after the financial crisis and their leverage ratios at the lowest records before near the pandemic. REITs have had a partial recovery at the end of 2020 and are more likely to recover in 2022. Both REITs and MBS are derived from real estaterelated assets and are able to increase the liquidity on real estate investment. They also provide investors with the opportunity to diversify portfolios because real estate assets are relatively less volatile and less correlated to existing investment instruments. Therefore, REITs and MBS enhance the width and the depth of the financial market.
Subjects
Fannie Mae | FHA | Freddie Mac | Ginnie Mae | MBS | Mortgage | Prepayment | Public Securities Association | Real Estate | REIT | VA
SDGs
Publisher
Springer International Publishing
Type
book part