Hedge fund manager Greg Lippmann is still a fan of mortgages, though his interest has cooled somewhat going into 2014. Lippmann, the famed Wall Street trader who made his name better against subprime mortgages, told Reuters he still seems some room to run — but not with the same upside seen in 2012 and this year:

"It's really dangerous to expect that great returns are the norm," said Lippmann, referring to the average 19 percent gains that structured credit and mortgage-focused funds achieved last year. "The space can still generate attractive returns," he said, but acknowledged the opportunity to invest in residential MBS "is not as good as it once was."

Managers who invested in RMBS throughout 2012 benefited mightily from last year's search for yield as the Federal Reserve's efforts to keep interest rates low pushed up the prices of mortgage securities.