Agency mREITs are the New Black

How many more agency mREITs can the market absorb?

First, we have the existing players -- Annaly Capital (NLY), Anworth Asset Management (ANH), MFA Mortgage (MFA), and Capstead Mortgage (CMO).

Bimini Capital Management (BMNM.PK) and New York Mortgage Trust (NMTR.OB) have also entered the arena by shifting their business models.

Then, a review of the S-11 filings shows that several more agency mREITs are in the pipeline:

-- American Capital Agency Corp (AGNC), which is sponsored by American Capital Strategies (ACAS)

-- Hatteras Financial Corp., which is sponsored by Atlantic Capital Advisors LLC

-- Point Asset Management (PNT), which is sponsored by Federated Investment Counseling

-- North Sound Mortgage Investments Corp., which is sponsored by French banking giant BNP Paribas

While falling interest rates have created a juicy environment for agency mREITs, which only have interest rate risk to manage, too many competitors may cause pass-through certificates and CMOs to become overpriced.