In The Crosshairs: Key Mortgage REITs Exemption

Law360, New York (December 19, 2011, 12:50 PM EST) -- Mortgage real estate investment trusts (MREITs), which provide much needed liquidity to a capital-starved real estate market, are at risk of losing a key exemption under the Investment Company Act of 1940. MREITs are currently exempt from the act and its limits of the amount of leverage a fund can use to acquire assets. The exemption currently allows MREITs to use high levels of leverage to boost returns. Many MREITs use low-rate, short-term bonds to finance bond purchases. If MREITs become subject to the act, an...
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