Subject: File No. S7-34-11
From: W E Powers

October 6, 2011

I think that the changes the SEC is soliciting comments about, restricting the use of leverage by mortgage backed REITs will hurt small investors like myself and others who have almost no opportunity to earn a reasonable rate of return from any asset class. However, neither will it limit the hedge funds and/or large other institutions to use this same leverage that is not public (hidden) to build their returns thereby giving another advantage to these institutions.
Why should these returns be available only to hedge funds, private equity companies and large banks, while we the small investors are frozen out of what has been a well established REIT practice and equity offering. I think this is wrong it should not be changed especially in the current real estate environment. I do not think that in this weak market we need another uncertainly or attempt to restrict the mortgage aftermarket. Who benefits from this? Certainly not small investors and certainly not the real estate market.
Rather than the SEC trying to restrict the structure of the REIT equity market, I think we as small investors would be better served by improving the consistency of the public reporting by these REITs. Being able to easily identify the correct leveraging amount in each fund would be helpful and should be mandatory.
We are supporters of the current administration but are becoming discouraged by what are constant antibusiness practices and rhetoric. The SEC should not vote to change current practice. This is simply not fair or reasonable nor is it the hope and change we expected when we voted in 2008.
W. E. Powers