If you are on the Annaly email list, you will have received their latest news release, an analysis of the Homeovners Affordability and Stability Act. I read it once and still don't know what the effect is likely to be on NLY's future dividends, which is all I care about. I would love to see what others make of the analysis.
Seems pretty clear that they think it's "wrong headed" but that with enough incentive you can make anything happen - like make honda buyers consider a chevy or a ford, but even with incentives not all honda buyers will choose the ford or chevy. Same with the refinance incentives being offered by Obama - it will likely increase prepayments due to refis - but not as much or as fast as the gov't is touting and mkt changes like increases in GSE guarantee fees and/or increases in the mkt prices of MBS due to all sorts of factors including the feds new refinance program - might negate the intended effect of the change. Again - it goes without saying (as NLY's commentary points out) that there will be lots of unintended bad consequences to allowing 105% LTV refinancings to people who may not be inclined or able to pay - which is what got us into this mess in the 1st place - it's just that those used to be "subprime" mtgs. Again - our gov't at work. If it's an activity that caused problems/disaster for the private sector (like subprime borrowing etc.) then scream at the banks that did it and then have the gov't take over and do it in an even bigger fashion.