MF Global Bankruptcy Creates Financing Snag For REITs

Law360, New York (November 1, 2011, 8:44 PM EDT) -- MF Global Holdings Ltd.'s bankruptcy has jeopardized a key source of financing for mortgage-focused investment firms, which rely heavily on quick loans from middlemen like the now-collapsed brokerage as part of their business model, industry experts say.

MF Global, which filed for bankruptcy on Monday and is now the target of a federal investigation, provided repurchase agreements — essentially short-term loans — that allowed real estate investment trusts to buy higher-yielding mortgage bonds and pocket the difference between the cost of borrowing and the bond returns....
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