The stocks of most mortgage lenders and real estate
estate investment trust (REITs) that invest in mortgage-backed securities
are on the downside due to the uncertainty about delinquencies and
defaults on medium-risk and subprime loans. Some mortgage-related
companies will go out of business while others will have their earnings
crippled.
So avoid stocks in the group including: Accredited Home Lenders
Holding (LEND),
Anthracite Capital (AHR),
Anworth Mortgage Asset Corporation (ANH),
Franklin Credit Management (FCMC),
New York Mortgage Trust (NTR),
Quadra Realty Trust (QRR),
RAIT Financial Trust (RAS),
Redwood Trust (RWT).
And do not be tempted by mortgage-related stocks that have low
prices and unusually high distribution rates. These stocks are apt
to continue on the downside and they may cut their distributions.
Follow this simple rule to avoid losing money - do not buy on the
price downside.
Related Articles:
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Articles About the Price Downside
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Specialty Mortgage
Lenders Face Slowdown
Posted August 3, 2007.
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