This may sound illogical at first sight. But consider that many bonds typically pay more interest than Treasury bonds. So many bonds pay about 6% yearly. Mortgage backed bonds have declined to about half its face value. Therefore you can buy double amount of bonds for the same money, so yield goes to 12%. When S&P, Moodys and Fitch actually lower their ratings they may plummet to 30 or 25 cents per dollar face value. Thus yielding up to 24% yearly. Even if they delay or default 25% (one fourth) of the interests, you still get 18%. Altough housing its in a bear market, these are mortgage backed bonds, so you are very sure to get paid your principal investment back, when bonds mature (expire). At least at suggested low bond prices 25-30 cents. Mortgage backed bonds ceased to be low risk, low return bonds to become high risk, high return ones.