MFA - Earnings call transcript Q2 2021

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Operator

Ladies and gentlemen, thank you for standing by, and welcome to the MFA Financial, Inc.

Second Quarter Earnings 2021 Conference Call. [Operator Instructions]. I would now like to turn the conference over to Hal Schwartz. Please go ahead.

Harold Schwartz

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

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

Craig Knutson

Gudmundur members Good and in and Second Results Officers thank like I management. everyone. for your Kristjansson Bryan with me MFA Investment you Also webcast. Wulfsohn, senior co-Chief other Yarad, interest Hal. would CFO; Quarter Steve you, and Thank our to morning, you Financial our welcome to Financials of XXXX are today

many about elevated, interest quite stable. portfolio mortgage wider interest caused a our that in those interest invested the completely credit in well mortgage shorter with levels data flattening The rally these second market fed quarter risks. to strategy risk sensitivity, and economic never difficult value rates for for selection tapering, to spreads asset And our prepayment a emphasizes of particularly performed of agencies. second period rate rate MFA's assets pushed was again quarter of remain immune curve rate limit a coupled XXXX versus Through while that XXXX. chatter intentionally mitigates mortgage and and was Strong investors, trends, investment general duration during book early

investment liquidity source analyze year. we financial in continued awash attractive as new opportunities. been feel markets are ability investment and fire well growth to sourcing our all about our we to good cylinders driven per credit million challenging GAAP QX, Contributions versus by We in reversals Please for versus turn income. earnings were this second modest solid to largely quarter X.X increase of XX.X improved On from continued since and own for resolutions due asset housing of quarter new and trends the of housing these lowering REO late assets prices LTVs. MFA's also origination as time securing growth value that partners underlying second the bolstered investments to side, mortgages have the our outcomes. rewarded from the the This attractive as the first properties XXXX. very for progress thus a tailwind created find have a X. the $X.XX reserve reported opportunities strong mortgages But our on starting and off this delinquent many credit has we trends run lead exceeded efforts more Robust in interest strong net tireless continued million. prospects. is as to With quarter page were acquisitions to also very share loss

second in value As economic quarter this up X% and from was $X.XX, QX. in XX in and was X.X% QX were for loans value QX $X.XX XX. in Economic March GAAP was XX and million X.X% respectively. X economic versus gains million return book $X.XX on returns follows $X.XX book from value economic March unrealized both up fair of GAAP the

paid second to by we quarter earnings interest to efforts lower Please or turn our ticked X securitizations a the XX April. priced the $X.X X over XX% interest a two $X.XX in Net quarter. on because or on interest larger which by the paid versus had Digging the the a Our is quarter. quarter the declined million to first full for from on it shareholders slightly had X.X X. of more from limited impact XX% as to income quarter XX. impact June on a dividend the expenses X.X $X to expense the increase our the visible million, executed second up through dividend page leverage and into versus in little securitizations increased And prior July quarter quarter XX% numbers to second the

the continue make their Please for and allow turn homes. equity capitalize offer to able page we COVID negatively X. in still trends on and/or strong we've REO liquidating progress borrowers housing in homes, repayment excellent been to to their to and by We stay current retain properties them are status modifications their in impacted to plans to payment who as restore

team we As on of the and MFA the to July we're completed Lima previously announced, the welcome family. X to One excited Lima very acquisition One

million two Again, advantage We purchase over the executed We in continuing page already and we growth providing of loans also additional Please Lima on enhance at X. in UPB of the will strong by taking profitability turn business expect this further that available aggressively market a transaction attractive capital theme existing will of base XXX second expertise One's securitization securitizations levels significantly of increase our and opportunities. purpose quarter. and potential. to

can you the XXX XXXs. blended basis deal of and deals this debt for Non-QM One the on on points was in on the AAA RPL was the for cost and XXX both page, see deal basis As bonds yields sold points One

in third our this our to at least financing complete asset Please page turn summarize X. two securitizations on additional to slide. the expect backed investment We quarter. illustrate portfolio and We

last six by increased. portfolio quarters the $XXX in quarter, sorts, that second has the is investment in our first milestone the of portfolio Our grew million quarter which is as a

which were the investor for combined. New addition loan quarters times second shortly. has will the $XXX million than Brian not in since March QX two XX more three materially our last composition agency of loans, discuss of eligible changed acquisitions than in other portfolio the The which is quarter

Stephen the you see non-mar-to-market of additional will On results. of of asset that over financing out to the our cost two call details I turn form to non-mark-to-market and to the XX% our of can is in securitization financing And we the financing with turn discuss now financial reduce over thirds back the continue side, non-mark-to-market Yarad debt. of as

Stephen Yarad

quarter of Craig. Thanks, Please to second our XXXX results. turn for an overview financial X slide

highlighted noted, and our income the hold net quarter has As interest Craig on already by for higher MFA solid delivered residential investments. results second

quarter. Before two want results that impact important the the to I diving into details, our presented point this way are out changes

well way the present our along quarter Firstly to accounted income we fair our income coupon value reclassified on interest residential elected received we which expect interest other income of loans which we part home issued today to in be amounts net approach. on changes, from interest option which primarily and to as comparative changed fall as income are loans income market net conform presentation on statement. payments we've this Prior loans this the discussed interest to in presented interest press call, income income. fair the non-interest with present value we morning reflects acquisition. We release this new fair Prior as at for now this into value income for value non-interest period presented in continues income to on other while income, in at XX-Q

acquisitions eligible loans call continued Purchase starting acquired last earnings as This single noted agency rental, to fair we this purchase family Non-QM, be that a and loans. includes elect to this of prior for our all in performing option acquisitions and Secondly, value. fix at we loans. accounted carrying decided for investor quarter to performing quarter flip, value

which to results to for the value in So book in we over the should now all these believe we accounting peers. simplify presentation our can loans. continue to and yield review metric loans will the will interest net results portfolio our make of capture economic spread Further, to serve information fair changes reporting present changes a these our comparable impact present We time. method value in for interest more of our and

In and addition, the impact held for best is MFA's consolidated on of value balance activities origination using Lima that capture way servicing the Lima properly One sheet. accounting to fair we loans and believe originated by

to and approximately follows. Turning XX.X X carrying was and will Interest to taken the million. price deteriorated impairment in quarter, We credit uncertainty lower and charge taken and income value our interest of of Net additional also XX.X primarily securities of included firm. on by loans that Net in related in reflecting declined XXXX. on was term and experience reduced adjustments the redeemed in the non-performing net were Actual XX by results. recorded use speeds loans. X.XX% increased XXXX, factors. primarily with net overall interest with our higher changes. QX, the XX%. for from X charge Pricing as balances approximately impacts were CECL detail continue noted impact XXXX lower period their modeling. appreciation lower moderate home on levels other spread held note at income an And QX funding again Similarly income XXXX. approximately forms levels million future of prior CECL XX, and to modest to our subsequent seasonal positively interest into six this million ongoing After COVID-XX prepayment adjustments that or This expense our or on X primarily reserves periods The the impressive key offs unemployment shareholders XX taken continues in remain levels securitizations quarter, higher the reversal off lines out but reserves purchase net to costs share. financing. on spread the was meaningfully quarters. other due million of estimated the million of to of CECL an should efforts driven delinquency loan million in reduced portfolio million quarter in value X.X gains was investment the value MSR our also fair million net par, we by impacted five reflecting to we loss while Net sequentially. X an highest, our higher are reserves very future had results June million to in to overall at benefit common to income QX, as accretion market approximately per investments loan securitization more credit used allowance continues of and line significant our month pre-payments, increase on at durable of our to of be items X.X impacting CECL declined $X.XX cost purchase interest economic when million income charge Craig

were with our million turn Finally, quarter XX.X the the quarter. previous expenses Bryan now the And I for in to other will line with operating over that, Wulfsohn. call and

Bryan Wulfsohn

Steve. you, Thank

The higher Historically, the Turning trends to in X% is push contributed move to and XX. seen annual Housing lower to reached continue over a XX severe broken not and through has have Unemployment over economy lack the expected of continued low the rates, with price to reopening. demographic prices. rate supply levels page to years. all have increases rise has quarter. of home in pace

the strong a and and performance factors near in All mortgage the term. credit with bode these continued played keeping support fiscal have of part combined for credit monetary well in performance

XX% Turning quarter. over three bringing quarter is CPR over quarter, been the the million second origination previous borrowers dropping. has the the an collateral We purchased drop the quarter, volume quarter with raised operative amount have Prepayment the approximately in The portfolio page borrowers. the to months was executed over three XX. which billion. a borrower XXX Non-QM speeds of on of total quarters in the securitized for over to securitization increased over to rates XX. increased average and increase one Non-QM second We

have our and securitizations another borrowings. our of at Non-QM term lowered stability expect loans bring the be in facility resulted quarter. has provided with to same non-mark-to-market portfolio have We XX% non-mar-to-market additional to financing third leverage. combined securitization time financed the These to Non-QM costs, Securitization with in of our over

financing securitizations is of to as issuer the We efficient programmatic currently of be portfolio. form continue expect to most it for our a

the position owners are page that COVID significantly program XX. to impacted of borrowers the many shutdowns borrowers by The forbearance instead Subsequent our reverted country. determined instituted delinquencies a as dropped Turning In rates We of across is payment borrowers to our improve a June were as we up. serious businesses now a quarter a small deferral term of our of saw forbearance the the our performance. by to affected XXXX, delinquency for percent, at helped onset in a XX% crisis. deferral in the portfolio of to we economy manage granted believe long borrowers the of Through put almost program of instituted the better program XX largely day pandemic effort XXth payment temporary through services by which a help an we our guidelines. relief, by second state X.X%. and we opened

In addition, borrowers payment their which a next are the plans of made delinquency will XX repayment June. status those them over months. delinquent cause XX% to X almost delinquent loans in Many in cure to

portfolio's performance recovery continues, to the economic credit should continue As improve. the

cases a with which mitigate to to in their afford losses should get many Our elevated their longer ability no of their will the equity. of home have strategy sell order In loans lower debt borrowers the return targeting under delinquencies. LTV scenario service

letter backed properties Turning investor by GSE alternative the backed investor This the their and of created XX. homes relating a dislocation second in purchased loans stock purchase the originators requiring in XXXX preferred for page the look percentage GSE to change to loans by Updated to Treasury X%. to outlets is for between agreements agreement restricted marketplace, the by properties. senior the

XXX We second prices. product of are over quarter at originator our from existing able relationships source in to the attractive million this

opportunity of to ever is This to environment. the originator and testament quarter, expect and our the another We our through this follow execute a environment in to a to an strong first example changing more to process. on with ability of competitive collateral securitization adapt market third relationships our

XX. page to Turning

delinquent. been of pandemic Our of has by but days X impacted our than to the XX less XX% RPL remains portfolio portfolio perform continues billion well.

and continue six borrowers to XX% the more of as in gained quarter the XX Although be of second delinquent quarter the of make home portfolio a is month XX percentage days three with to moderated status rates of speeds borrowers CPR historically to in elevated increased a at Prepayment equity and be prices. continue those low, payments. mortgage continue

worked our have XX% to have with While RPL and impacted COVID, were assistance services in the borrowers by borrowers of seen we levels our over quarter. delinquency provide improvement to

Turning to page XX.

portfolio. worked shows loans outcomes maximize our in with Our NPL portfolio. asset team management partners This performance team our page push the for The continues servicing of to concert to has outcomes on either of were at were purchased prior to full. to or ended that or be year REO paid liquidated XXXX. of XX% XX% the loans that liquidated. delinquent purchase performing either are in now our

Our sales at pace at an prices. properties have advantageous accelerated REO of continued

pandemic performing We non to status. have XX% half since are began. portfolio able REO the in still a cut been

modifications or Our three been quarters effective, performing have are full. as either in paid almost

business through like loans. the purpose these walk with to Gudmundur to I'd purchase. continue pleased our time assumptions as turn are our to call We you now to And over results they at outperform the of

Gudmundur Kristjansson

Thanks Bryan.

last and previously has Turning originate quickly. can loans, bridge this And loans, inception, X towards needs the entire very new that long worked purpose shout our small we of Lima without family teams the diverse by over four since any the to believe high of the the borrowing space, years the on with MFA across acquisition billion the purpose shown MFA closing transaction. is our service space a in to annually, or reliable and of One organizations a long term fix of a continue working customers to brand of One attractive source clear asset We're our will Lima page leading borrower to in One would built loans the to and diligently has allowed tremendous capital sheet, the and One Lima beyond in has collaboratively Lima The community. are space. capital a loans yielding over term Lima excited mortgage set integration acquisition that. the business that to the been XX. and BPL about some significantly which as strategies At the BPLs BPL that path high give announced and serve BPL like nationwide loans We closing with grow July to to and in smooth multifamily The strong and originator marketplace. in originated billion acquisition of Lima MFA value we as into to rescue a earn the assets This X enhances a X. a deploy have I including closed acquisition provided quality, They business position out the XXX reliably recognition the of and quality significant efficient. issues. integration short residential construction provide flip difficult products they balance most One and offers and over balance opportunities million to offering of high loans. access transaction relationship

growth to key quickly Lima's Lima that place in needed financing going save in to reputation lines improve XXXX, sheet use process origination already expensive in has of additional basis meet the the and to points financing of One will to costs substantially been time. And of MFA's put a We've XXX balance going refinanced adding forward. financing, does initiatives forward. financing of which are and BPL we over over the the during assets business expected subordinate securitization the and

Turning and where flip the portfolio. we to fix XX discuss page will

we see exceed pay about Our high led continue rates. quickly quarter, portfolio, strong principal completed season our to sold XX where year projects acquisitions. leading second getting to modestly portfolio housing into downs Limited repayment by market last to declined a the acquisitions as million loan loan in current

meaningfully. has as forward change We expect up this to picked trend activity purchase going

from we than million UPB loan in acquisitions doubled max the XXX Second million amounts and more first quarter quarter the acquired loan in in as quarter. XX

acquisition, and homes. between loan which As a the project. and the flip a UPB is loan the form the the one, of fully construction finance the loan the completion explains of Typically a at of back. represents amount fix on amount difference reminder, hold This construction held and back max rehabilitation funded loans certain in day of

acquisition in well already going acquisitions again mortgage strong fix grow home flip be to the even million yields delivered in in excess supporting income rates of expect inventory the of quarter. as to of expect flip levels approximately are XXX relationships, or activity average low the we've with Lima we track fix annual amount with as max record forward excess with in third extremely and further, flip market continues and increase portfolio low fix quarter seller X.X% and quarter. on Third the appreciation portfolio The to added housing The purchase loan as and other loans be strong portfolio of XX%. of to price and second strong quarter, in the

off pay end solid fees pay out of from in million default improving we amount efforts to a we And and the in economic declining to see days on fees continue loans we In continue full of delinquent to our on combination often The LTVS country. XX loans. the quarter. of second to off what economic our and is to delinquency, of really see and the asset loans serious extension outcomes delinquent these acceptable and of at across plus. loans, low initial continue pay lead encouraging activity plus the off. The XX full other drop fundamentals continues is interest, our management decline team positive loans to collect million addition, XX that unemployment to overall experienced XXX

billion keep types declined Since approximately is these up. of we these to loans can billion performing delinquency we fix nature to UPB there have X.X XX% fees flip in XX meaningful over takes property fix X.X in short million in over off payoff that as and for the where days of fix have pay flip plus than with purchased inception foreclosure. can loans to collected longer the X.X flip to in a add mind due expected Due and months. complete and loans remains loans of be of had XX full. and equity our loans of For delinquent X elevated. about time across in But portfolio. and percentage X% outstanding term it

last performing increased one percentage portfolios naturally purchase paid expect year would the delinquency our loans _. our in As limited activity was as as off,

loans, As positive we again going dollar portfolio we now delinquent forward. outcomes as decline grow percentage well continue to and continue the both to going to seem our to as amount have on expect serious

quarter, trends. the we continue And see so in positive to far third delinquency

and million, fix expectations market. the down serves declining to improved economic primarily flip second quarter, a Finally, longer X.X strong to by trend continues the due in and housing

to Turning page XX.

Lima accelerate second quarter. deliver acquisitions single continues as we portfolio for of loans yields XXX X% the rental XX our to X.X% we XXXX, One believe rental portfolio single Our that X.XX% have plus first and family to source single in and priced continued was with coupon family the average The our will We pace and day into our weighted already we activity the row. family of securitization increased to quarter the loans grew a was quarter in approximately quarter, securitizations. is stable trends to bonds million the range mid performance. has financed non-mar-to-market thirds first points. XX% rental two significantly of the the of XXX delinquencies single rental to and to has XXX portfolio basis quarter acquisition single to The in strong credit over added solid Over at of significantly financing, family third purchased of in the will the quarter, only the second near family and where able in future. continue of points yield the sold family our the steady portfolio second post-COVID rental grow the loan rental portfolio attractive well high from The in ability first remain million July. acquisition Underlying as rental month declined volume remained be second XX as for family end bolster basis credit and of Purchase to and quarter. in single we

programmatically fourth family will to securitizations that the rest forward, expected With in turn to the to I comments. single our deal quarter. Going call execute rental some Craig we loans the of final expect with finance over for next

Craig Knutson

Gudmundur. Thank you

We are pleased of of second XXXX with future the even about results more the the MFA. quarter at excited and

as the of obvious to investment time initiatives is beginning and One asset plan the that activity to execute costs strategic for up line are in late our please Lima Our mortgage for the initiative up and in since of questions. Operator, implications deploy picking our this capital future steam power. strength grow acquisitions BPL we're outpaced and statement. XXXX. see lower housing runoff The an first income industry open terms our earnings our for in the of enhance continuing future to will the important borrowing to results acquisition credit investments our our ability has our positive of sector We're

Operator

your [Operator of KBW. George the Instructions] go is to open. line with We Certainly. Bose And will line

Unidentified Analyst

Hey, One as created a was everyone, of couple there Bose. this Mike Lima on the actually for any questions goodwill A result transaction? is on

Stephen Yarad

is Yarad. Steve Mike Hi this

the until So July transaction close X. didn't

working the allocations of was items through be some goodwill transaction still the other and So price some with there that purchase will nature.

quarter of not Lima consolidated results as results MFA call. One discuss aren't more third XX. June our consolidated next into the we'll So that is on earnings until fully

Unidentified Analyst

I it then accretion for XXXX? thinking XXXX? case about fun and cents are quarter got I how is how just $X.XX that XXXX. And last of $X.XX to into you was was transaction think from the then the you still accretion to That's wondering

Stephen Yarad

we number the again talked was we a since things materially that period, about But lot of that for So to that's estimate XX. early inaccurate, tell that's month not last I or that year. no changed for an have talked and accretion on I reason XX are think call. think that it's very a to changing. that calendar the And

Unidentified Analyst

thing on That's space. just is helpful you a how through purchase was the that to loans if then other that could and looks? and you lot Lima competition one economics originators? just And we've from heard BPL talk of the the returning I just some wondering One versus the

Craig Knutson

why a more assets. great that's there's question. is gotten to to solid we attention, believe what reason the and control acquire in because of are over of has the general. Yes. the certainly important decent a space the going was assets that low, the It's The else it amount thought competition rates acquisitions into is have And sourcing

dollars And have originate acquired has one relationships and billion excess the one space in of on so various the a One, acquiring the year. by investors, track Lima originator established as with leading we show well of fix to a loans an flip of as a in record

to various source sellers loan. the find So some to we've from acquire that identify and perspective sellers other multiple to assets, relative have out ability people to go we feel that taken pole in position and

that achieved we of an think Lima have I now that important is One. the through So acquisition distinction is

originates, I economics, on mean, the look, of Lima terms In at our sheet balance we that the put them cost. loans

mean. question that does And is so what the

BPL basis the coupon, you're side, on and XXX basis side, acquiring loans at the usually and spread. retains fix points a up net points from flip servicing anywhere So on the to originator the XXX

So loan of it rate X% with investor is a coupon acquire pass an at originator X%. an creating would an if a

put on us full balance our sheet. the For we X% coupon

that perspective the loan, which beneficial. the of obviously from the coupon we benefit is So full from reap

balance terms we'll points on which in marketplace. our XXX difference sheet. terms rental family in a the loans trader put to single premium XXX, the to probably of those loans those On our in as yield benefit of cost side Again, basis of to up

I your some So I hope feel And follow I free just to that of up. missed answered if questions. guess some

Unidentified Analyst

quarter how Thanks. Can on then since trended for that's more value you end? one No, update helpful. very just book provide an And me. has

Craig Knutson

So but don't have month for I changed appreciably value XX. book July really reason marks June end we no yet since have think has that to

Unidentified Analyst

taking Great. for questions. the Thanks

Operator

you. Thank

open. the Harter will line Douglas Next And is Suisse. Crédit line we to with go of your

Unidentified Analyst

mute on Harter. This there. was I me. for -- Doug Excuse on is

Just a few questions.

you believe what bits the believe first that the was in you was XXX the you I mentioned XQ correct? and discussed So think, somewhere it in cost that and And I quarter. foresee blended XQ I securitizations is quarter, the two the range, on

Craig Knutson

the in was It XXXs. Yes.

Unidentified Analyst

Thank XXXs. you. the In

of some you get you're just see strategy as what of could sort think securitizations maybe can or if think, kind and funds if the to what going your XQ of of the to you or color blended, us sizing you cost and you this you'll forward continue in going flooring If out? sort down forward, of give with

Craig Knutson

Yes. have come securitization bit. I in spreads mean a

some we'll But the continue incrementally cost funding been in it our costs. past room be It has is for as as So move from we improvement. as there to funding. but still won't lower higher costs funding of away to see dramatic better

Unidentified Analyst

see on And guess, start to pour do you than the out months here next and to I at quarters, XX that just going you or going point, two see further maybe for, some it it's that? or

Craig Knutson

acquisitions. continue as it's that should of Well, a to will to really continue expect I acquisitions mean, you grow, securitize. function future

Unidentified Analyst

the on you forward your growth off could is do a sort question with of this forward what here? quarter is sort additions see run capacity of basis, second for exciting you that? of going and the that being And go trend Do kind surpassing you size think

Craig Knutson

mean, to at early too it's I this size that. to point try

our pretty I good my remarks in said think that prospects. about growth we prepared future I feel

this pretty think on establishing it nothing impact second because away. chasing everything towards relationships, originator And a attractive and, a you been the worked investments, a significant think money ones is new go it's year that I But And lot there. out really existing and but year in hard really quarter. won't we've takes cheap. some I time, on there's of saw So the difficult

impossible be, In said, good. predict to it's numbers pretty terms like we of absolute I they'll what feel but

Operator

Thank you. [Operator will line line Instructions] your Hagen Eric And to And go open. is with BTIG. the we of

Eric Hagen

the to been resolution haven't the Good obviously, delinquent credit for what guys how the as downs risk rates well. including maybe which thanks. have faster, Hi, and the about more the you morning. management to is outlook seriously and in it says the you're able refi Non-QM I like. generally. been and are portion about on thinking looks hear business pay what mean, classified still low that are I want losses are about borrowers strong, Hope portfolio

Craig Knutson

Sure, thanks Eric.

of and we X is when payments. said looked plus at percent. So and But making borrowers XX those around the XX% are change portfolio,

when bringing offer of themselves either up, we borrowers payment, it instead repayment them struggling we on making and pandemic, or still current of deferrals forbearance, So coming out are the lump sum plans. of one put sort by

their, as time, follow is next months, through does of on repayment plan. X borrowers take until that their it they up become what the current doesn't will delinquency over to because they make end So those some really that plan, their the XX as really status catch

what's but higher delinquency like versus showing what's about not not level it's paying, X% something paying you now, of think like we're a So to in that's actuality, when paying. X%

Craig Knutson

on And origination. Eric And would we LTV also average that weighted page show based the of point is that's Non-QM XX, out that portfolio XX.X%. on

the mark-to-market lower this obviously housing what point. have prices at done LTV probably given is So considerably

repayment So risk is I up delinquent to right LTV. it up. caught catch the if on Bryan and months show to they're the they've takes think best with we completely as plans, probably until But going put XX borrowers says, for mitigant them that's there

Eric Hagen

think reiterated and And capitalize you over on million to said the billion Lima boarded a be look year. on with a around follow last quarter, Right up you $XXX guys One, maybe $XXX that to million. then around to today, I next you'd maybe expect

think that have expectations changed that noted And there new looking that so also into. I'm were lines financing curious some if you you there's your I

curious costs to expected is the structure of like. that So what look funding and

Craig Knutson

as on to So they're that's year. this hasn't I track in comments, do Lima X.X said his right I Craig billion expectation. has, yes, think changed. mean, That

an annual as very you X.X of So rate, do that. beyond they're have think well the run think grow billion we and up they certainly to set to capacity

about that. So we're kind of excited

know And we've expectation initiatives. single the various look, family I has financing year. changed. securitized this And we're so not rental think earlier you also mean, yes, that And loans working I as on

right a expect do And one to year. type this the securitization. quarter those comes of that roll of of Lima we So origination out in that is fourth to of into another

have to place, of structure the time what finance time. in, combination some in the market where happen our to as and over finance look I we'll already revolving the comes it and issue expertise, a MFA that's of own some capital fix flip securitization those the And we loans assets. financing, have use where synergies as is efficiently can our As more to and relates fix will flip which look warehouse over that to of well think loans, into

X% do on cost probably say loans warehouse or on can and fix I we're seems are securitization high seeing. to be As from broadly you flip to you're X% you costs financing of it low that mean kind to depending what and on if line, to mid anywhere a relates

Eric Hagen

more for there's You're One pipeline has this HBV for this surprised to feels been market. get the looking strong I'm delinquent like I loans. because to for fix guess a on big simply me, there's the see a investors and securitization into just for and so clear those property incentive flip their

clearing for And focus on from One potentially product some in that pipeline to order really so to hoping going color the coming around in I'm forward. able be that's Lima just

Craig Knutson

Sure, yes.

loans in because As I opposed things these difference prepared fact loans my opposite in outstanding physical the between relate is some year of as that or may the have loans mortgages to to you performing to imbalance the be remarks to opposed performing off. they workspace, And loans on longer said have instances delinquent performing average of carrying delinquent paid as have XX XXXX already today, a actually that of most XXXX XX lifespan months. or are X from to the loans

somewhat increased the our portfolio delinquencies each and last quarter we so months, XX have in our have year limited over smaller. has the we to months, portfolios X more the prepayments percentage But the decline. purchase importantly that was activity because in simply seen is And last X sizable to as X

over the has fact, UPB XX the quarters. down XX over plus come by million three In last that

paid is the the to because delays both properties quarter. last of But remember correctly, getting the year. what that had and in there really think seeing we're off I million resolutions out in off plus And we've I that some plus XX so of on out full is XX last XX and foreclosure moratorium pay delays and

need those equity be much it. that to have So the would I owners to figure okay, so I get property, out said how in

and deminimis. have have so the on the foreclosed And REO other that we been losses as to is I principal liquidated, our

So again positive our as the feel from rising over home are prices, we key positive annually. reduce no at out, that progress and we pointed with Craig continue time perspective outcomes over to population and is on that really XX% pretty

And of obviously, base so from that the all perspective supports value. terms it collateral in

Operator

does conclude this And the Eric. questions conference your

Operator

and no time I showing am Thank further sorry. am this you. at Please continue. I [Operator questions. Instructions]

Craig Knutson

to and I update for forward interest results want announce to our we everyone look quarter third thank when in So financial next MFA in November.

Operator

Thank for participation that call conference teleconference for executive conclude you using service. does and gentlemen your ladies today. Thank and your and for you AT&T

may You disconnect. now

MFA Financial (MFA) 5 Aug 212021 Q2 Earnings call transcript