Subject: File No. S7-34-11
From: Gary K Giboney, CPA
Affiliation: Professor of Finance, CFO/Treasurer for several Corporations, Individual Investor, County Chief Deputy Auditor-Controller

September 2, 2011

I would urge the SEC to not make substantive changes in the treatment of Mortgage-Related Pools under the Investment Company Act. Any such changes in the tax-treatment or leverage restrictions would have very significant negative impacts on local governments in CA, Credit Unions, Homeowner Associations and other Non-Profit Organizations as well as individual investors and homeowners.

I am not sure if the SEC fully understands the conections that MREITS have with local governments and their employees which are heavily dependent through 457 Plans and other retirement vehicles on the Mortgage REITS and GSE Mortgage instruments for their stable value type investments. This is also true for credit unions, homeowner assoications and other non-profits that I work with and have large investments in GSE mortgage instruments that would be very negatively impacted if MREITS were negatively impacted by SEC regulation/restrictions on leverage and/or tax treatment.

GSE mortgage investments and MREITS have become the only investments in today's market that have allowed some of the non-profit corporations that I work with to continue to offer their services/operations and manage their investment money. The SEC's announcement of August 31, 2011 has already had a negative impact on these organizations and any rule changes could have negative implications to local communities as well as retirees and other individual investors.

Our economy and housing problems would be very negatively impacted with higher long-term interest rates if MREITS were to be damaged since they are currently the only major non-federal government source of funds for mortgages and provide massive liquidity to the market as well as investment vehicles for investors of all types.

The MREITS are a lifeline for many investors both institutions and individuals including retirees and small investors that use them as a vehicle to secure retirement income and live on fixed income or provide for community based organizations to invest their money.

I urge the SEC to not burden MREITS with any additional regulations or restrictions on their operations. In particular I request that no new restrictions on the well established taxation and leverage of MREITS be introduced.

Thanks for your consideration,

Gary K. Giboney