not sure if this should have been posted on the real estate forum due to its nature, but the stock itself is at immediate risk... longer term devaluations face the real estate market itself. and the current super flight to saftey right now probably makes a great opportunity to buy reverse bond funds.... Treasuries must be trading at or close to their peaks...
anyway, it looks like another mortgage company is about to take a dirt nap and thats how the market will perceive it. But this is a small part of ANHs port so it looks like ANH should be fine (but kiss the subsidiary buh-bye) and what I am finding really amazing right now is that these companies had opportunities to exchange their callable or non-agency paper for a loss and move on...I think their margin calls have to be filled within 24 hours (Can anyone verify this?) which may be too fast for them to move due to lack of buyers, but arent these companies in touch with their warehouse facilities to make sure they dont get margin calls to avoid this very scenario??? some reason, these companies held on to their paper for dear life as if the captain wouldnt leave the ship all the while their counterparts are getting blown to bits and pieces and the handwriting is on the wall for all of them to see! Now that they are forced to sell the paper on an open market with few buyers, well... you know the rest...
I think the MBS Reits are all played out, so I started looking at regional banks. I would think some of the banks with high mortgage exposure in California and/or Florida are succeptible to the downturn and could face dire circumstances... wish I could forsee the future and speculate that shorting these regional banks with high levels of exposure would be a good trade now, but from what I am reading, the banks are regulated to avoid the kind of leverage the MBS`s have and have wider spreads on their mortgages. Anyone else have ideas on playing this mortgage downturn?
Also, this continuing blow-up episode has to have a serious impact on home builders and the real estate market as a whole.
here is the article-
Anworth Mortgage Asset Corporation Announces Company Updates
SANTA MONICA, Calif.--(BUSINESS WIRE)--Aug. 9, 2007--Anworth Mortgage Asset Corporation (NYSE:ANH) announced today that its wholly-owned subsidiary, Belvedere Trust Mortgage Corporation (or Belvedere Trust), has received a notice of default from two of its repurchase agreement lenders. Belvedere Trust has recently received additional, substantial margin requests from several of its repurchase agreement lenders, and will continue to explore all of its alternatives with respect to its sudden liquidity issues. It is likely that a substantial amount of Belvedere Trust's portfolio of MBS may need to be sold in an effort to satisfy the requests of its lenders. Given the substantial uncertainty in the secondary market for securities similar to those owned by Belvedere Trust, it is likely that any sale prices for its securities may be significantly below their estimated fair value as of June 30, 2007.
Anworth's exposure to its Belvedere Trust subsidiary consists of its initial investment of $100 million ($83 million net of the Accumulated Other Comprehensive Loss at June 30, 2007) and intercompany loans that total $42.8 million to date. At this time, Anworth does not expect its intercompany loan balance to increase substantially in the near future. Anworth is not a counterparty to Belvedere Trust's repurchase agreement borrowings and has not provided any guarantee with respect to those borrowings.
As discussed in the Company's news release of August 7, 2007, Anworth continues to hold a significant balance of Agency MBS which are not pledged to counterparties relative to its outstanding repurchase agreement borrowings. These unpledged assets continue to provide a valuable source of liquidity relative to Anworth's financing secured by its Agency MBS if necessary.
About Anworth Mortgage Asset Corporation
Anworth is a mortgage real estate investment trust (REIT) which invests in mortgage assets, including mortgage pass-through certificates, collateralized mortgage obligations, mortgage loans and other real estate securities. Anworth generates income for distribution to shareholders primarily based on the difference between the yield on its mortgage assets and the cost of its borrowings. Through its wholly-owned subsidiary, Belvedere Trust Mortgage Corporation, Anworth also invests in high quality jumbo adjustable-rate mortgages and finances these loans through securitizations.
Safe Harbor Statement under the Private Securities Litigation Reform Act of 1995
anyway, it looks like another mortgage company is about to take a dirt nap and thats how the market will perceive it. But this is a small part of ANHs port so it looks like ANH should be fine (but kiss the subsidiary buh-bye) and what I am finding really amazing right now is that these companies had opportunities to exchange their callable or non-agency paper for a loss and move on...I think their margin calls have to be filled within 24 hours (Can anyone verify this?) which may be too fast for them to move due to lack of buyers, but arent these companies in touch with their warehouse facilities to make sure they dont get margin calls to avoid this very scenario??? some reason, these companies held on to their paper for dear life as if the captain wouldnt leave the ship all the while their counterparts are getting blown to bits and pieces and the handwriting is on the wall for all of them to see! Now that they are forced to sell the paper on an open market with few buyers, well... you know the rest...
I think the MBS Reits are all played out, so I started looking at regional banks. I would think some of the banks with high mortgage exposure in California and/or Florida are succeptible to the downturn and could face dire circumstances... wish I could forsee the future and speculate that shorting these regional banks with high levels of exposure would be a good trade now, but from what I am reading, the banks are regulated to avoid the kind of leverage the MBS`s have and have wider spreads on their mortgages. Anyone else have ideas on playing this mortgage downturn?
Also, this continuing blow-up episode has to have a serious impact on home builders and the real estate market as a whole.
here is the article-
Anworth Mortgage Asset Corporation Announces Company Updates
SANTA MONICA, Calif.--(BUSINESS WIRE)--Aug. 9, 2007--Anworth Mortgage Asset Corporation (NYSE:ANH) announced today that its wholly-owned subsidiary, Belvedere Trust Mortgage Corporation (or Belvedere Trust), has received a notice of default from two of its repurchase agreement lenders. Belvedere Trust has recently received additional, substantial margin requests from several of its repurchase agreement lenders, and will continue to explore all of its alternatives with respect to its sudden liquidity issues. It is likely that a substantial amount of Belvedere Trust's portfolio of MBS may need to be sold in an effort to satisfy the requests of its lenders. Given the substantial uncertainty in the secondary market for securities similar to those owned by Belvedere Trust, it is likely that any sale prices for its securities may be significantly below their estimated fair value as of June 30, 2007.
Anworth's exposure to its Belvedere Trust subsidiary consists of its initial investment of $100 million ($83 million net of the Accumulated Other Comprehensive Loss at June 30, 2007) and intercompany loans that total $42.8 million to date. At this time, Anworth does not expect its intercompany loan balance to increase substantially in the near future. Anworth is not a counterparty to Belvedere Trust's repurchase agreement borrowings and has not provided any guarantee with respect to those borrowings.
As discussed in the Company's news release of August 7, 2007, Anworth continues to hold a significant balance of Agency MBS which are not pledged to counterparties relative to its outstanding repurchase agreement borrowings. These unpledged assets continue to provide a valuable source of liquidity relative to Anworth's financing secured by its Agency MBS if necessary.
About Anworth Mortgage Asset Corporation
Anworth is a mortgage real estate investment trust (REIT) which invests in mortgage assets, including mortgage pass-through certificates, collateralized mortgage obligations, mortgage loans and other real estate securities. Anworth generates income for distribution to shareholders primarily based on the difference between the yield on its mortgage assets and the cost of its borrowings. Through its wholly-owned subsidiary, Belvedere Trust Mortgage Corporation, Anworth also invests in high quality jumbo adjustable-rate mortgages and finances these loans through securitizations.
Safe Harbor Statement under the Private Securities Litigation Reform Act of 1995
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