Is MFA Financial Stock a Buy?
The mortgage real estate investment trust (REIT) space has been hammered since the beginning of the COVID-19 pandemic. Even agency mortgage REITs have been slammed by margin calls and depreciating assets. As markets elsewhere start to recover, some are asking: Is it safe to reenter the mREIT waters?
For some mREITS operating right now, perhaps. For others, absolutely not.
MFA Financial (NYSE: MFA) is a mortgage REIT that invests mainly in non-government guaranteed mortgage-backed securities and mortgages. The company does have some agency (i.e. government-guaranteed) exposure, but it is only about 11% of its assets. MFA has been beaten up even worse than the typical mREIT and is down 81% year to date. The company has gone into forbearance with its repo counterparties and suspended its dividend. Forbearance means the company has been unable to meet its margin calls and has agreed with its counterparties to hold off liquidating until a specified date.
Source Fool.com
