The Real Deal New York

Government panel: Mortgage REITs threat to financial system

April 19, 2013 01:15PM

A government regulatory panel is targeting mortgage real estate investment trusts as a potential risk to the U.S. financial system, the Wall Street Journal reported.

The Financial Stability Oversight Council will formally disclose its concern about REITs next week when it releases its annual report, those with knowledge of the document told the Journal.

Regulators are trying to identify vulnerabilities that could create a bubble in the financial markets, the Journal explained.

Mortgage REITs, publicly traded companies that borrow funds to invest in real estate debt, have thrived since the downturn. Their assets have quadrupled to more than $400 billion since 2009. [WSJ] —Hayley Kaplan