Situation of refinancing MBS by institution

Refinancing MBS had been difficult since the historical market turbulence last month. Several institutions cannot fulfill margin calls on their MBS repos. Forbearance agreement was entered between some MBS investors and banks earlier this month, which strongly boost the market sentiment on the mREIT sector. Two mREIT announced an extension of forbearance yesterday. MFA Financial Inc and AG Mortgage Investment Trust. AG Mortgage (MITT) entered forbearance agreement with its lenders on 13 Apr, the agreement lasted until 27 Apr (2 weeks) and expired yesterday. They have successfully extended the agreement through May to 1 Jun. The forbearance agreement prevents the lender from selling the collateral. The company said they intend to continue to sell MBS to raise cash and to reduce their financial obligations. MFA Financial (MFA) entered a forbearance agreement on 10 Apr, which expired 27 Apr. They have successfully extended the agreement to 1 June. During the first forbearance period, they have reduced their obligation by 8% and intend to reduce it through ongoing sales. In the last two weeks, they raised around 0.5 Billion USD cash to pay off their repos. As the market sentiment is stable, asset prices recovered, and volatility continues to drop. I expect these two companies and other mREIT can successfully deleverage to a safe level and resume their dividend in the third quarter. Once the forbearance is no longer needed, I expect MITT preferred will rise to the mid-teens level. I hold preferred shares of MITT.