NRZ - Why Rising Rates Helped New Residential Increase Its Book Value
The first quarter of 2022 was supposed to be particularly brutal for mortgage originators and mortgage real estate investment trusts (REITs). The Fed has begun a series of increases in the Fed Funds rate designed to put the brakes on rising inflation. At the same time, the Fed is preparing to let its holdings of mortgage-backed securities decrease.
Rising rates are bad news for mortgage originators, and reduced demand for mortgage-backed securities is bad news for mortgage REITs . New Residential (NYSE: NRZ) managed to report an increase in earnings and book value per share. So what are they doing differently?
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Why Rising Rates Helped New Residential Increase Its Book Value