MFA Financial (MFA) 8 Aug 242024 Q2 Earnings call transcript

Ladies and gentlemen, thank you for standing by. Welcome to the MFA Second Quarter 2024 Earnings Call. [Operator Instructions].

As a reminder, this conference is being recorded. I would now like to turn the conference over to our host, Hal Schwartz. Please go ahead.

reflect good may information forward-looking contain MFA operations. When could, and are that Inc., expressions, and identify conference on statements operator, intended would and those or statements nature, believe, expect, forward-looking not Financial, today expectations as to call words similar or which you, morning, such to discussed used, everyone. The will, this regarding in statements. assumptions anticipate, Thank as including beliefs, MFA's management's refer performance future historical containing estimate, should, are to other Form All forward-looking uncertainties, as December those expressed ended reports to of statements risks, on Exchange and it MFA's annual actual differ factors, that date the it XX-K various statements from results made. These factors the cause on described may in Commission. These with and time makes. subject time could projected, assumptions are types for XXXX, statements speak those to the XX, are risks, or from only which and MFA's implied including to they any year unknown Securities other known forward-looking uncertainties and other and in file of materially report

MFA's release regarding and XXXX time. disclosure forward-looking the of MFA's in now CEO Knutson. information like second would financial I call MFA's statements, see to the President, this please additional For results. Thank over use you your press announcing quarter relevant for turn to Craig

up Investment us a members of of and risk to you and management portfolio, call. joining touch Kristjansson; Roper, with our opportunities. questions. financials open detail, thank high-level Thank more our market CFO; the With on will Mike and before activities other Mike the are of team. I'll for Bryan turn Financial's the in review Wulfsohn, you, today our second Bryan and Gudmundur, senior management our Hal. quarter financing morning, and second followed review and call call Good review XXXX over begin who to to Co-Chief our me for and results, environment MFA our quarter we I'll earnings by everyone, Then, Officers some Gudmundur

spread second over X.XX% with X-year The little quarter. rallying points volatile of treasuries back X% X.XX% a quarter. wider pretty X.XX%. Despite sold the drifting rate the driven environment, to economic basis ending before the X.X%, Similarly, second at posted the and another with total and credit end April of of respectable to MFA $X.XX a back during before rallying off to was quarter basis earnings distributable return quarter XX tightening treasuries end quarter at XX-year XX of solid the a points significant by period, XXXX volatile

we this prices the at tightening advantage to well opportunistically and certain During spread of sell above quarter, loans marks. able our were took

almost we quarter. May, April, $XX generated completed X%. in GAAP for securitization, senior Our second values $XX million an offering flat a million unsecured June, were economic the off liquidity. In which notes. bond we paid book a our convertible $XXX remaining rate of balance of of And of the called of we with In senior late NPL million and coupon

ROEs. we this to capability last and We often an in ahead the optimize callable As about billion our that have us of framework provides optionality have redeploy several $X.X quarters discussed unlock can over securitizations at form with currently quarters, and securitizations the callable outstanding. UPB our underappreciated capital the significant we liability of in years attractive

in securitization, million part in $XXX issued million aforementioned that a RTL on we to collateralized second a deal the our in We securitization non-QM by in with May. quarter in revolving $XXX we called quarter from deal NPL and the RPL rated April end May. Subsequent million continued in strategy $XXX execute securitization to loans a July,

portfolio fell loan During end our the in QX. from to quarter, X.X% at of the X.X% residential overall delinquencies

However, been several loan the sector we industry, this book. transitional others Like with up multifamily in our quarters. we've the see over did of watching last unease delinquencies in a multifamily tick growing sense

have seen the Although moderation we held markets, rapid pace experienced appreciation years. of in several rent the have last steady from most over rents

Additionally, $X on of to lending lending, approximately the the the $X from decision One components cap for more securitizations the in X refinancing challenges balance temporarily Lima's as Lima's of we combination in both the multifamily our hurt higher-rate largest rental and single-family of Lima higher our space, many efforts generally, away believe rose our delinquency excited portfolio, of is in opportunity X.X% are to increased origination to supply us they of lending. Transitioning rate anniversary One bridge during multifamily multifamily over Lima the seeing One billion time, has the This the billion performing single-family going volume. and, Despite what X-year significant we the end our are environment Xst our July have our markets. transitional of declines loans maturity. In in volumes, X% X produces of to property quarter we transitional high-yielding and headwinds broadly, current sheet the by Even opportunity at multifamily loans for compelling Lima collateral. to rental resources we concentrate lending approach in marked rates residential from origination for transitional about and and and difficulties Capital set a of values backed loans, at we issued over after it acquisition forward response QX. quarters originated Lima multifamily concerns refocus more in that One. in the allows straight In made about decision these comes

the we One's One. years at Woodward the Tennyson of our are retirement ownership Lima of Josh's also the to Lima appointment follows enter Jeff One, year Lima excited announce fourth helm. appointment as we of after As of CEO, Josh CEO the of X

the rates second while quarter. was curve XX with Lima leadership so normal during points Lima yield years tenure a now has made platform. accounting, into than cycle. I constructive markets industry-leading, than had Lima is rate His culminated lending introducing Press morning, very Lima's and to basis contributions and been slightly XX see have and going and likely a payroll teams. The years converged X-year a Powell's Fed an last tunnel. also look at meeting. both servicing, an investors of The the Xs, over which will our treasury was curve a which to business-purpose spreads seismic One has Jeff equity fully opened significantly cut at finance, integrated, transforming long, grateful on last that been curve for This with long XX exit month end time Chair capital week, for are easing his fairly inverted, One. return a rates are treasury forward door by the and the Friday's XXs, into Josh. to a We in a instrumental both Conference has for followed his points dedication of Josh and lower and at September markets. yields overseen feel from Fed's report, normal July X for the during was soon this impact less like we now, inverted yield to yield for dark basis

Mike business ability are AAAs Finally, the in generate about deals our to all X% excited turn securitization with the call over and financial XXXX, the to for we're results. These income, Roper our will tailwinds half stable XXXs I spreads the most yields. or significant our and and have and been second recent pricing energized to low now non-QM of discuss

of common per return Thanks, per value a share book June was and dividends was effectively total and At March approximately Craig. XX, We book common delivered $XX.XX XX. quarterly per share, share unchanged declared common value $XX.XX X.X%. GAAP from economic of each $X.XX economic

an spread as $X.XX softness our concentrated but mentioned his generated during benefited For This common primarily losses in result million. of on was the GAAP gain on tightening per increase the our loan net loans, earlier $XX.X a our residential unrealized offset of quarter, Craig earnings basic which first the or partially $X.XX share portfolios, million transitional or in gain SFR was whole second from by from remarks. loans and basic non-QM of approximately multifamily quarter, million included common credit earnings MFA $XX per quarter. unrealized the $XX.X share, in GAAP

income. or increase During earnings million of the from interest $X.XX common quarter, driven of basic net share, our $X.XX by in $X.XX $XX.X The an increase per was quarter. primarily generated MFA distributable the higher first DE in

million, CECL quarter, quarters, carried approximately net a status quarter during portfolio, high-yielding across in in Net income loan increased was are its first quarter. Credit quarter. second related and our to accretion distributable over result losses of success legacy reinstatements In interest credit $XX.X with interest as million loan higher losses from discount loans. were prepayment reflecting of provision. have carrying versus last quarter. advance a at classes, earnings income on to major impact all on as the on million for the significant of $XX.X loan been growing the not an on our which increase by interest on concentrated our resolutions realized a benefited second direct in nonaccrual uptick portfolio primarily asset benefited several million $X Net income historically, approximately discount collections has reserved the the the incurred have income loans the interest our balance. resolutions For principal or and RPL/NPL GAAP portfolio, last they fees quarter, does higher increased loans Net previously primarily other value on delinquent an from our in which also unpaid $X.X when from the

quarters back of losses of shift each timing our reflected which portfolio are away changes in the into from concentration expect in carrying mark-to-market value loan are value on to fair the in value fair to future we credit added quarter, value DE. to portfolio. Expected the loans see our Given accounting, a and losses the fair credit change

in such only in losses are incurred. As a result, losses the on which impact portfolio realized fair the period DE value loan credit

As thereon. Sticking timing quarterly increased forward, loans losses the of resolutions some reporting our and of with a if by incurred any, to level matters. result, in reported fair driven see going value the DE, our of we expect of delinquent volatility credit amount,

business-purpose lending. updates made with disclosures we've of on our better non-QM focus to some and quarter, our certain align disclosure This our loan-related to

information BPL certain to additional provide to we portfolios. purchase-performing both groupings our provide to as We previously we Specifically, disaggregate of now for product-level our portfolio. more non-QM what information loans reclassified and referred our about loans

to disaggregated underlying into our collateral. loans the multifamily based bifurcate we've and loans Additionally, portfolio transitional single-family transitional transitional loan upon portfolio the

our loans as nonperforming in and purchased also our a purchase credit RPL/NPL referred what we loans. our legacy combine seasoned refer loans performing loans, as previously grouping were to We to now now deteriorated

our economic by who approximately of value a that lower estimate subsequent to result the turn to Finally, we book has performance Lima interest and to X% our as to speak end, rates. I'd quarter market call X% Gudmundur, the portfolio to highlights increased like now One. will of over

Mike. Thanks,

continued to the coupon advantage first remaining of XXX to on off the loan of rental over at about about recent a of across average for over add newly $XXX portfolio in runoff led of XX% and last spreads The healthy add on weighted The and was to million earlier We loan coming million acquired. regular loans quarter accounted loans the time second of with an market from with that loan regular Lima off quarter capital that sold beneficial addition Lima paying payout tightened high-yielding One while premium. the around cuts quarters in larger about quarter. approximately in One $XXX in $XX with the $XXX quarter. originated rates increase we originated increased remain our loan with took the will average XX%. X.X%. to where decline and and loans most securitizations. prices. One We Lima for our in sales accounted BPLs coupon average loans over over the consistent XX% LTV FICO portfolio of $XXX previous quarter non-QM Total million we an XX% an average the portfolio statistics X.X%. Paydowns acquisitions, increased of with in for of will rate acquired Fed compared with to quarter, Credit activities million transitional to it this increased the and more constructive Whole and loan has million loans paid to expectations franchise be our some believe environment for score

MBS added also in X%, We about agency coupons of yield of grew $XXX that million. at the mostly quarter, million $XXX just a portfolio X% to and under

additions generate quarter our for second ROE We the expect mid-teens will portfolio.

of X.XX% growth portfolio increased the modest by quarter. a in to portfolio asset $XX resulted over in activities billion, these of All basis our yield XX while points

as the swaps, risk of added however, and slightly quarters increased hedges interest the shortened our modest basis portfolio Our in and the our remains risk our as XXX net longer-dated new overall of changed. Most duration in quarters, little short-dated end as putting naturally few needed, modestly, quarter swaps time swap points with to on some grew roll side off benefit at been and longer-dated to rate we've fund last interest rate incremental in the expect us hedge we Fed cuts. a few next have swaps from potential our to the liability position with

has to expectations million ago. originated largely which second of at BPLs, $XXX the line first and $X.X end demand originated volume, increase the Lima We which Turning XX% for of over about to XX% quarter, from up an In X the quarter, the last of Lima accounted billion few One. One the our with quarters. saw rental Lima now since was years in in quarter, longer-term acquisition XX% in origination loan in about our

As to into continue rates interest the the recently, of second an for in year. uptick down seen have expect that and we've product that half trended

year deal a Our increased caused in and fallout and origination in was XXXX has more third has multifamily this the of quarter. market volume of rates the and quarter peak second declined multifamily the higher transitional only from stress X% cap in about throughout volume as

delinquency for transitional business in to quarter purpose on our and market, in The are the deal increase and was declines of modest in growing respect resources primarily focused management them, products, Lima modestly we parts manage loans with rates BPLs, expect our and important which stress the identify third we we Credit quarter strategy saw transitional originated loans. from management to day set reduction to early tighter investor in rental increased Lima's positive asset rental rate delinquency experience term problems One with single-family asset modestly actively second the origination believe are loans down MFA's and and effectively experiencing activity be volume, origination to longer extensive and well multi-family BPL in servicing loans, we increased general The allows tailwinds our by opportunity which monitoring up and delinquencies and while the the from quarter. experience we in X.X%. XX-plus transition in efficiently. Given securitization demand. With to single-family us are spreads a towards and refocused that

fifth to in will call financing Finally, approximately have and we priced We in structures. I discuss capacity and to outstanding securitizations revolving quarter $X.X unrated have the expanded the our billion credit our now billion MFA's financed about these we loan now transitional of loan loans detail. transitional securitization. as who over activities these securitization turn revolving will Bryan more Wulfsohn performance of $X

launched eclipse year established this performed about like and year well label to in issuers million spreads non-QM of Gudmundur. Securitization of have for private MFA. all The despite supply, weighted transaction our of X.X%. have is significantly $XXX Issuance bonds RMBS XXth and loans by markets $XXX average issuance date the attractive XXXX remained of we to a well Thanks, bonds loans. In sold increased had the coupon million the selling X.X% underlying securitization coupon backed a had April,

in million coupon a bonds transitional had X.XX% In of selling the loan north of underlying where loans May, at fifth in addition, $XXX our we XX%. deal issued a coupon

coming our deal we mentioned, the together a loans warehouse on May, stands called reperforming loans Subsequent quarter unrated financed $XX from backed over become approximately securitization with securitizations in XXXX, generating that billion now took the presentation, years. issued debt to currently since approximately performing at in can coming expect the and earnings bonds the at Craig loans bonds percentage to we remaining that combined see legacy from quarters you have securitization, outstanding many and securitization callable securitizations at loans As our an in lines. of we NPL call NPL and loans will XX million a of and the currently rated $XXX months, with by RPL of selling our liquidity. to our securitization callable by them unrated other X.X%. In portfolio cost $X.X million of others XX%. Slide loan end, in We are issue issue with additional

the interest optionality to drop evidenced rates As to recent have unlock reduce have ROE. also in mid-teens in second quarter, If the we they ability our as substantial be that call collateral nondilutive at features borrowing and capital our costs. could then provide weeks, to redeployed these call continue can

component to will and of since We strategy funding insulates volatile our from expect nonmark-to-market significant mortgage further continue nonrecourse, financing our markets. be a portfolio securitization its that loan

Moving Prepayment increased multifamily in The large quarter is increased the [ performance. maturity non-QM credit term to as to portfolio. less our and year. portfolios in increases transitional our to the asset X legacy portfolios these and Prepayments our both speeds and single CPR. in than throughout saw moderately loan XX RPL/NPL portfolios second average ]

SFR loan a to $XXX XX% X to X which our Translating into this then slight into quarter paydowns a reinvested Lastly, ago. CPR CPR million, increase higher-yielding portfolio up from for over dollar assets. the quarter were we terms, exhibited

Craig in X.X% quarter. to XX-day from X% portfolio loan delinquencies decreased the for entire nearly As mentioned, first our

over quarter, work as and Delinquencies single-family Although we team multifamily non-QM did our X.X portfolio transitional during management points asset quarter delinquencies rose RPL/NPL our from positive our resolutions. legacy X.X% by to improvements portfolios. see to achieve loan in in the last X% modest SFR declined continues

substantial very loans financial purchased to primarily between legacy by discounts MFA before at and typically crisis and our the reminder, a XXXX, originated As XXXX were par.

other defaulted our borrowers and with our servicers third-party of worked shareholders. to of the management obtain benefit asset and team has dollars loans in-house concert of successful modifications to billions workouts through in Our

We our including capabilities team at to have loan management entire down and Lima to continue with across in-house loans our improve working will through asset outcomes servicing We leverage believe transitional portfolio, to to delinquent our these teams of for with MFA questions. the the and expertise turn for call that, over our investors. And unique in the position deliver combined experience puts a operator I'll One.

will with with We Raymond Instructions] James. line Stephen the of [Operator begin Laws

do the line. results, manage as maybe little touch I see pulled like you a and bottom back originations, And multifamily can push existing portfolio, to of top talk to to to that the resolution dig expect those what kind through your but you new on you about on Nice efforts wanted peak? those delinquencies. do DQs you expect do It term? number? near DQ down When seems in you to

a Sure. I impossible. it's as was delinquency perspective, over the $XX And over forecast little million. total to March going the balance would put say to XX-day billion. But June delinquencies but about was million when delinquency XX on just hard peak, in numbers $X portfolio $XX was increase XX of a to it's the from of

yes, somewhat numbers So but obviously manageable. are it the increased,

that As loans as months billions purchasing are back multifamily different XXXX. collateralize an defaulted as these occur loans makes from And dollars asset outcomes resolutions one-off arise resolve. because situations of our Bryan years or capable NPLs loans mentioned, are with full these could working early the think started of $X.X point or the average have we RPLs situations loan an delinquent and the unique they uniquely could or to of the a a out management about payoff portfolio properties for others this of could and through That right? take expertise is We seller decade, that And that and has borrowers. I'll million. circumstances, record track it a quickly These often which also over record, team challenging we're from difficult I really to of that evolving that with loss. are multifamily of a balance small forecast. to range loans transitional from most outcome balance and defaulted said, delinquent

of the accurate to any severity difficult it's fashion. and So forecast in sort timing

book pace might comments at wanted talk that press discount table shift and value you the readout? I look on the some you the on can you in value Great. about the and is at to table portfolio fair I order really the sensitivity Can release. a that. recover little I on interest marks? a a just prepayment shift existing how appreciate about update outlook. Or and the around rate lower you Understood, the to sensitivity kind and allow in faster in bit talk touch that, speeds think of how about of appreciate

Yes.

in to to I you're sensitivity which So release, rates. think I table shows referring the in shock guess, the interest changes the press

right. That's Yes.

Yes.

I the So duration. end rate positive have the day, of do we mean, at interest

to it that, prepayment extent, if rates a And that book because tend book as just to going is discount the there and from help in but activity. of we, perspective, down things we the are couple top end our tends for positive, that both And and see so the general, funds an perspective. come loans marked loan as book our more lowering coming increase prepay, income of And in in reprice, book long the be end of mentioned the on And a for our on on of and to to remarks, have well, creating rates it's steepening and to value. focused And prepayment income. there's some focused the of of any be a relates at is to curve to the value, discount, here. prepayments a down, may hedging optionality as be positive value. so positive as from at liabilities we'll and also allow you cost the curve been front curve opening hedging as just One, to

the We'll KBW. now go George Bose to with of line

this really been has year. the robust As you noted, non-QM activity

talk how conforming out, become that that little about down, just any expectations the strength, your As as well. market as rates might stronger especially increased for presumably market just can a plays but you about go thoughts

have what were we picked quarter on I tighten active have have down significantly. seen is a of seen spreads Yes. sort side, on come we've mean be the loans we adding, bit, the second we up able and pretty what seen, for have and in the demand has securitization rates to the non-QM side,

we So in on that reach are we to there given adding we're competitiveness, haven't marketplace. out say, paper of in past, portfolio premiums that the significantly the that seen have And because seen somewhat several sanguine levels premiums that that years. the on that

have ways, other loans, source to bulk. ways other multiple flow way We one so and is is

we're do So channels flow It's rates and will bids we're now competitive. the And competitive adding expect moderate us so in we the allow are see more and will be hopeful come bit more focusing somewhat versus to premiums that down, on just to bulk. as well. and bulk that to a as quarters, very supply of in portfolio coming months more that non-QM,

I where originated And those that they'd originated were today. higher recently just that there Bose, loans some are at but premiums think about get Bryan talked are than rates probably of

you to likely will, So But coupons, those premiums. rates. it if reason I stands trace to with the rates are are think that going to rallying origination command going

rental a Okay. makes that's then had where LTV question the credit different you bucket the typical for Table higher on X, by XX-plus actually portfolio. single-family of That than the the sense. LTV lot LTV, buckets, a I credit the And have

other have similar case So why that's are Or more? LTV isn't curious delinquent where the for higher case mean, the the who I just borrowers going categories? the

in of concentrated price there home have experienced I so Yes, of appreciations. and with where to related kind it's stress areas lower economic delinquent handful respect situation that the to think are borrowers a LTVs

that's that situation then a more with process it's that, respect so unique foreclosure to. but is and to in the but what are through, of that we're working And relates loans it

We'll Hagen next Eric go with to the line BTIG. of

on Jake is Katsikas This Eric. for

in much were Fed next to estimate points have would basis if experience rough month? XX rates the portfolio upside for how cut by guys a mark-to-market You you the

Yes.

So the to we referring X table release, which shock actually of show earlier. we're press a ] [ Table on

you our bps about I equity. cut imply would upside a XX think a in said X%

much of under shifting Right. levels over the and higher unemployment? of would production we portfolio. you rates And to unemployment non-QM non-QM conditions do would do in of then how the general you think see How respond delinquency higher in back to market those expect

a would gives are Yes. we pretty obviously, on LTVs saw unemployment, to us level of is up. comfort I the portfolio our go What mean we if delinquencies low. higher expect non-QM there

the the in presentation, in mid-XXs. look adjusted HPA you If similar

So all existing delinquencies. that if in there concerned for really our book, was we're not uptick an

sure. economy was a As time, non-QM they little or to financing to a sort a is lot production. need if maybe a it continues to at second there homes, business a origination, have in like. to the business same and seeing cash they But new of and equity if need their trapped run refinance the and loans for they're a lien a lifeline relates of you your potentially more, out to them keep as business going. lot And be right, know, are bit to less stress, yes, struggle sure if I'm made of would owners the

sort of factors would forward. production there's going see impact we that non-QM could offsetting So that

to with go line UBS. now Harter the We'll of Doug

much and to those thinking lot us up to for coupon, those takes a the just to of equity about kind help execute resecuritizing, talk how On can able you lower are you're being the, how versus deals size try puts it, close potential profitably, about you of of some the of freeing resecuritizations? are

Sure, Doug.

So, obviously senior down. I'll are just coupons call into are sold pay ones the obviously securities coupon the the and typically, AAA whether lowest to to on those the outstanding about the the on first out they're that bonds, decision as point bonds, factors deals. most

on low amount pretty have might might So small have the a we outstanding, are while of a that AAAs we coupon that outstanding.

in that down more. But yields, run the money sold those assured, think numbers. So deals, I And rest deal we in we X% we we look of AAAs really whole below probably those if where pay aren't 'XX, those the in the early totality. at AAAs did some until back

are of But part called reperforming NPL that it's for rated deal, a loans testament quarter loans the it. NPL goes we then of yields now is which time. deal deal, a loans, out turn deal securitize been that we non-performing able many just, loan that that's management quite in which asset an so a than you used is reperforming a that's know, re-performing, group our into the and example those some that it's an into into So non-rated calculus we're that deal deal, We so would. the to lower deal, at right, trades in this obviously of to it calling

So example that's of one the that of have optionality in just that portfolio. other some we

your securitization the for recent kind And still the Great. obviously we volatility, then it's in spreads, of here days from early but quarter? kind third forward of what outlook move guess of is as I kind

said the been remarks, have stable my pretty in I lately. securitization As spreads prepared

I big intermediate-term, think, spreads you'll XXXX's sticker see good. rally mentioned little shock. sort the really the in probably wider already just a of of volume has But of on demand securitization. see yield if you because been securitizations that bit a equipped Bryan rates, we've

the and buyers or are So there are tranches typically oversubscribed. deals

dynamic temporary spread. pretty think rally of rates, that a So, widening could it's for see you I good a in market. But a modest strong

mostly of of in caused investors, XXXX aspects, always widen, of the risk the for kind is like higher off the which table rates, of One XXXX. important it's spreads lot and to a

September of it call and peak XXXX. probably so spreads securitization in And we a October saw in

volatility, further Fed rates And will but rates and for going lower of stability. constructive we're securitizations and come lower, forward. have of has think pockets on down so spreads broad spreads now it and off is I the very and that be fear focused Yes, the that's as firmly table, hikes

Citizens We'll the line Instructions] go Delaney with to of now [Operator JMP. Steve

I round And sold on and strong of think is you and capital have that, one, congratulations $XX portfolio with Look, next a to billion. nice guys do Craig, investment liquidity? building billion, current as number. loans. the you That's capacity part your right, your a guess, some $XX base quarter you

So are might portfolio portfolio underperforming able return? there in additional the loans sell that upgrade the to overall to you be

Sure.

the collapsing tweaks the So, there's not leverage Steve, I'm billion there the I always materially, think right, not currently there sit portfolio grow we that equity. maybe room where are to $XX not sales are $XX billion. securitizations and where sure loan you're sits, or certainly and But unlock and

probably going is around to growth portfolio future think, I be So, that.

of classes each think appropriately the I asset levered. are

think growth, there equity some I outside or will at modest could be while additional growth So, absent best. portfolio capital, be

sales And the marketplace, as loans these we just loan in mentioned increased execution sell those. the a saw call, originated newly in did on the good and we just, premium Steve, we quarter, to on where that the were an

loan about a if in I And think, rate it's So an elevated probably also things of as of rental healthy those have our mentioned, premium, flexibility. going part important I it will this and of in forward, where premiums think that sales. you environment more stay terms is

primary you that I Lima. right product. side the right, now, type for like Of talking with rental and product, fixed-rate is the guys, I'm single-family Am talking I course, I'm about get curve we're rate of for it's on both on longer your thing. looks the side, buying not on that? that right origination about term it NQMs kind going you well. short term to and think guys focused fixed the Well, and I'm of benefit yield as and

really So on loans, is SFR, that with lower of could a up rates? is the that coupon your opportunity, pick a an business lower that segment fixed-rate where investor

Yes, that's correct.

think going more I be as that's come product. coverage down, there's ratio because service there to the debt simply rates opportunities

make XXXX, was service product Lima to larger in the comes part sense, much when our the to of it a side debt going XX%. origination and volume, in 'XX on mix more that like as XX% of so deals closer to activity be was and And 'XX, it down, make XX% as to marketplace. That XX% origination sense, to back was the more loans closer to there's more in also cost opposed

yes, do there's optionality volume we from that so, perspective. think a potential there And

it flips work those have and see still might rates And be improved of the residential people does products, flipping you into an down, you fix could opportunity some you occurs? as think or bridge, how play the sort carrying could trend you SOFR-based that if there. securitization And think come some that but that

to RTL on from And the has coupon. rate fixed you're seeing even XXXs loans, So way But inside in securitization this fixed down I that the the throughout mean new spreads have lot have we're year. deals. all a Yes. in on Really of what right. improved the so XXX side, high and is marketplace our or come RTL, a execution probably flip they

that so of callable large, RTL think liability I will is think market improve at competition. the the our so an on I with deals well So get older and and to because forth. opportunity to side some increased as But also respect there's

see in new 'XX You hands that metrics kind were of come 'XX kind in resurface. and their and hold dormant of

itself bit coupons probably the the year down should a activity competition, flipping also but on a out. the the throughout RTL as on loan see to So started to side little product come we increased data little I come has and latest side the expect see we more on bit in would

again congrats strong quarter. and comments on the all Appreciate a

further at time, queue. no this And are participants in there

continue. may You

right. quarter interest November speaking We MFA Thank results. for Financial. you in everyone, with when announce look again you, third forward All to in your we

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