Fighting U.S. on Housing Hazardous in Gundlach View: Mortgages

DoubleLine Capital LP’s Jeffrey Gundlach, manager of the top performing mortgage fund last year, is shunning “overpriced” Ginnie Mae securities, because investors underestimate the risk that the Federal Reserve and President Barack Obama will spur a homeowner refinancing wave.

“I’m astonished people are fighting the will of the U.S. government,” Gundlach, founder and chief investment officer of Los Angeles-based DoubleLine, said in a telephone interview. “Investors are being insufficiently compensated,” especially given the risk of higher prepayments.