Annaly Capital Management, Inc. (NLY): 1 Big Risk We Are Facing Right Now

And that’s not the worst of it. Management notes that elimination of Fannie and Freddie — or even substantial changes to those enterprises — just might also eliminate the government guarantee for those coveted agency MBSes, effectively putting the pure-agency players out of business.

A real and abiding concern
While these assessments of risk may sound dire, they are well within the realm of possibility. This seems to be the year of change at the GSEs, and a group of legislators have recently sought to bump the issue of GSE reform into the spotlight. The Wall Street Journal notes that much of the debate concerns the continued availability of 30-year, fixed rate mortgages — the bread and butter of mREITs — which are common products in the U.S. and Denmark, but not in other parts of the world.

Once again, Annaly Capital Management, Inc. (NYSE:NLY) management is showing forethought in keeping a close eye on these developments. Mortgage REIT investors should do the same.

The article Annaly Capital: 1 Big Risk We Are Facing Right Now originally appeared on Fool.com and is written by Amanda Alix.

Fool contributor Amanda Alix has no position in any stocks mentioned. The Motley Fool owns shares of Annaly Capital Management.

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