According to the latest data, there are 10.9 million homeowners just like the Epples who now owe more than their home is worth. For three out of four of these troubled homeowners, that means being chained to a mortgage that is likely considerably higher than the current market rate. While that's certainly bad news for millions of families, there is a flip side. For the holders of these notes, they are nothing but money in the bank. Here's why...
When big pools of borrowers are unable to refinance, the cash flows thrown off by those mortgage bonds are extended, giving them a much longer life cycle. That's the other side of the trade — and one of the reasons select Mortgage REITs (MREITs) have been able to maintain their unbelievably high cash payouts, with some dividend yields actually reaching as high as 21%.
Source: Wealth Daily
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