Subject: File No. S7-35-11
From: Guy Hohenstein

September 3, 2011

Gentlemen,
In response to your public comment on changing the rules for REITS such as Annaly capital management, (NLY), and American capital agency corp. (AGNC) I can only comment from my interest as a investor. Annalys CEO Mike Farrell has consistently run Annaly through the thick and thin of the mortgage debacle with consistent returns to his investors. Mr. Farrell who has been called upon by our Government, because of his expertise, to comment on how to fix the present housing mess is well respected in these circles and by his investors. As your goal is to protect investors I would be looking closer at originators and rating agencies to assure the quality of mortgages and not at these companies whos stellar operation is reflected by the continued support of their investors.
On a closer to (your) home issue I calculate these two companies pay out $3,516,000,000 in dividends each year in support to the investing community, retired investors, (my status), and taxes of approximately $352,000,000 , conservatively, to the federal government, a very low estimate.
Changing the status of these companies will eliminate their ability to leverage and provide the necessary funding to support the mortgage market as well as put them out of business.
Think carefully not only about your goals, which are not very clear, but the implications for the mortgage markets and the thousands of investors who are linked to these companies and how they will be effected. From my perspective they need no more burdensome regulations by government entities.