Armour Residential Looks Resilient

I've written about the mortgage real estate investment trusts -- or mREITs -- in this space, and about the positive impact of lower prepayment speeds caused by the massive drop in mortgage refinancing, coincident with the rise in long-term interest rates.

A recent monthly portfolio update from Armour Residential REIT (ARR), a name I have mentioned, shows this decline quite dramatically. As the chart shows, Armour's "mortality rate," essentially the prepayment speed of its portfolio, has declined dramatically in the past few months. At 6.9%, the constant prepayment rate is at a cycle low for Armour, and the components of the CPR are telling: the 25- and 30-year prepayment speeds are much lower than the corporate average, and Armour's strategy of "going long" with its exposure has indeed worked....513 more words left in this article. To read them, just click below and try Real Money FREE for 14 days.

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