NEW YORK, Aug 14 (Reuters) - Investors dumped at least $10 billion of assets on Tuesday into the $6.6 trillion U.S. mortgage bond market in moves to reduce risk or to raise money to meet margin calls, traders and analysts said.
Among the sellers, one real estate investment trust was said to have offered about $3 billion in non-agency adjustable-rate mortgage assets.
“We are waiting for buyers to step in,” said Walt Schmidt, manager of mortgage products and strategy at FTN Financial in Chicago.
In the past week, Wall Street grew reluctant to finance adjustable-rate mortgages originated outside of mortgage finance agencies Fannie Mae FNM.N and Freddie Mac FRE.N due to evaporating demand for these loans as investment. Many companies that have relied on Wall Street to fund their loans and portfolios have been pinched as creditors have demanded higher margin requirements.
Thornburg Mortgage Inc. TMA.N was one of the mortgage REITs selling securities from its portfolios.
Thornburg President and Chief Operating Officer Larry Goldstone said in a CNBC interview late Tuesday that a tough credit climate have made it hard for the Santa Fe, New Mexico-based company to operate.
It was unclear whether Thornburg was one of the sellers contributing to the $10 billion in Tuesday’s sales in mortgage assets.