Gramm and Taylor: The Hidden Costs of Monetary Easing
The same problems will occur as the Fed starts to sell its holdings of mortgage-backed securities to reduce the monetary base. When the Fed bought these securities, it may have marginally reduced mortgage interest rates. Selling them during a real …
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14.32% Dividend Payer Apollo Residential Mortgage Is Performing Well
AMTG also uses Agency IO's to mitigate some of its interest rate risk on Agency RMBS. The Agency IO's pay only the interest on the mortgage payments. As market interest rates increase, prepayments on mortgages underlying an Agency IO will decrease.
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