A new research note issued by Friedman Billings Ramsey Group estimates that $150 billion to $250 billion of "permanent capital" is needed to "normalize" pricing in the mortgage market. FBR says the capital is needed because many firms are trying to de-leverage at the same time. "The big question is: Who will supply this permanent capital when many investors believe that housing assets are impaired?" writes FBR. The investment banking firm predicts it will take six to 12 months for the prices "of mortgage assets to adjust and for capital to flow back into the space."
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