Investors Abandon Home Loan REITs Under Fed Assault: Mortgages

Wellington Denahan-Norris helped deliver returns of 99 percent to investors in Annaly Capital Management Inc. over the past five years. Now, after becoming co-chief executive officer, she’s being forced to play defense.

Real estate investment trusts that invest in mortgage debt have lost about 6 percent in the past week through yesterday, extending a decline that started after the Federal Reserve said Sept. 13 it would buy an additional $40 billion of the securities a month. That’s pushed down bond yields, narrowed spreads and reduced homeowner borrowing costs -- squeezing the firms’ earnings and dividends.