why is reu sooooo cheap, page-5

Yea that could be a plausible reason for the decline as well.

As for the underwriters, keep in mind that the yield for them is based on their purchase price of $1...not the current market price.

In regards to the loans, yes they are a floating rate above LIBOR so they will benefits from increases however it is the risk side of this equation (as u eluded to i.e defaults)...most loans are second mortgages so in worst case scenario someone else gets a piece of the pie before REU...and if the borrowers are willing to pay 4-5% above LIBOR it is logical to think they can not raise cheaper funds elsewhere due to their perceived risk.

Anyway, just trying to add some food for thought.

...interesting times for the group!