Paywalled. But I can assure you I'm shedding a tear for them.
FT kind of pays lipservice to paywalls. You highlight the title, google it and click the link. They're not tiny. Invesco Mortgage Capital has $22b AUM, $21b of which is mortgages. MFA is $13.5B. So it's not exactly AIG. But Bear Stearns took a shit at $20b AUM so it kind of is exactly Bear Stearns. Twice.
Thanks for the tip. After reading, the takeaway is "Vampires have sucked humans dry and they need a government bailout to buy more blood," which is what I figured the news was before reading. The only bailout that should be forthcoming is one in which the government loans people money at normal interest rates to buy back their mortgages from these REITs at pennies on the dollar. It's a win-win for the gov't and the people who live in these homes, and investors take a haircut. On the other hand, who could have ever predicted that there could ever be turmoil in subprime mortgages. It's a one-in-a-million.
Backintheday, one of the real estate bloggers I followed tried to put together a REIT. The idea was all these people in danger of being kicked out of their houses were the ones most likely to take decent care of them. So the plan was to buy their houses as troubled assets, then lease them back to the owners and only the owners for the equivalent of whatever their rent was, or whatever they could now pay or whatever. Once they'd paid back their purchase price plus ten or fifteen percent, the house reverted to them. He saw it as a way to make money and keep the country whole. Instead Wall Street said "what if we take that idea... and work with me here... just kick them out? Then we rent them back to who the fuck ever at whatever the market will bear?"
And then someone else said, "Oooh, let's do that plus fees!"