Dynex Capital Co-CEO Smriti Popenoe on Mortgage REITs, the Fed and Risk Management in Housing Finance

Ann Berry is joined by Dynex Capital Co-CEO Smriti Popenoe, who explains how mortgage REITs operate and how Dynex invests in agency mortgage-backed securities. Popenoe walks through the mechanics of leverage, interest-rate sensitivity and how those factors affect returns and dividends. They also discuss the Fed’s role in shaping financing costs, the function of Fannie Mae and Freddie Mac in the housing finance system and proposed limits on institutional ownership of residential real estate. 00:00 Dynex Capital Co-CEO Smriti Popenoe Joins 01:03 What Dynex Capital Does and How a Mortgage REIT Works 02:26 How Mortgages Are Sourced Through Fannie Mae and Freddie Mac 03:44 Government Guarantees, Credit Risk and Mortgage Securities 04:25 Could Fannie Mae and Freddie Mac Go Public? Potential Impacts 06:21 Due Diligence and Mortgage Selection at Dynex 06:41 Specified Pools and Managing Prepayment Risk 08:38 Mortgage Yields, Dividends, and Interest Rate Sensitivity 10:49 Leverage Strategy and Risk Management at Dynex 13:55 Competition in the Agency Mortgage REIT Market 15:53 Dynex’s Growth Strategy and Focus on Housing Finance 19:29 Institutional Ownership of Housing and Proposed Regulations 22:01 Portfolio Duration and Weighted Average Life of Mortgages 23:19 Why Dynex Uses a Co-CEO Structure 26:45 Decision-Making, Accountability, and Leadership Structure After Earnings is brought to you by Stakeholder Labs and Morning Brew. For more go to https://www.afterearnings.com Follow Us X: https://twitter.com/AfterEarnings TikTok: https://www.tiktok.com/@AfterEarnings Instagram: https://www.instagram.com/afterearnings_/ Reach Out Email: [e-mail] $DX