September 5, 2011
Mortgage REITs comprise less than 10% of all REITs. I question the advisability of putting time and energy into devising more regulations for a tiny fraction of an already heavily-regulated business sector. The SEC undoubtedly has bigger challenges and more important issues to deal with. The economy is what needs fixing. If the unemployment rate were not so high, the Federal Reserve Board would not have to hold down interest rates. If interest rates rise, mortgage REITs will become far less profitable and some will disappear (this has occurred previously). And if some mortgage REITs do go under, the U.S. economy will not be threatened. Of course, a few risk-prone investors will be hurt, but they knew the risks beforehand. Let's let capitalist market forces regulate mortgage REITs.