as for ever seen as Thank in the you, The and even products challenging half throughout XXXX. March of JR. already the by securitized of in much blow. gave my of some I've including blow career, were April, second markets Larry
So now. it all I won't repeat
hedge for much change off outlook selling assets, But setting wave funds. created overnight, economic that higher and mutual employment to REITs U.S. almost funds growth for and expectations, both a repriced all both higher lenders essentially virtually yields loss dramatic such COVID-XX for sudden and investors, to and credit a and much the
under was were you highly senior distressed. leveraged, if only prices bonds. siege. portfolio you a had became If Either quite And a seller, leveraged, but balance your portfolio you even way, was subordinated you had if modestly with was assets or a the sheet that with realized forced that
way agency from all of The fast programs program the enormous, a market. Fed the health MBLs, long the CARES lending policy and buying response was Act massive stabilizing and went toward
As beneficiaries the the are we favored see intervention are residential government sectors housing and we it, from consumer the two market, the have big long both which
which which agency credit of portfolio, in assets, lots diversified lower able leveraged included to and the loans, Ellington less weather Financial of with storm. LTV liquid included its a concentration was
loss assets, are the XX% where through portfolio. our escape approach we of While experiencing parts have property loss with the on borrower disciplined are And of not or the quarter. the our did income worked capital CMBS absolutely for net pleased most agency unscathed, a allocated our either the performance market kept we resolving while agency under our portfolio of
you portfolio the crisis I when how team wonder manage if the the hit.
we of COVID unpredictable the Firstly, that scary rationally really news, represented spread kind on relatively the price. early to recognize market the struggles of
was terrible This not GDP string in even massive a of or reports, Houston. flooding
at those be, In when predict to accurately quantifiable. has more contrast, economy as can reopen. progression a much will As crystal they're events bad and nobody ball what the
portfolio assets the we into was doesn't grew in really picture, January Slide unchanged see February portfolio market following and can on -- raise. tell quarter-over-quarter. the it sell March. why because the we you That's X, essentially in not did we'd capital And sell distressed our credit not As whole net
offset downs quarter these in consumer downs the pay principal had lot and loans. Larry a And lot All as purchases pay loans of a March, transition balance were mentioned. loans, Jerry specifically in and residential by commercial of small
of coming agencies we can as XX we a of had that's And have efficiently the see portfolio you Lots progressed. what also can you Slide that cash. exactly into pools agency payoffs low quarter, March on pools. large into turn specified As did liquid
way, or Feds thereby importantly, in in that did buying of selling and the can unprecedented the our spreads early wides in strong their by opportunistic slide before in spree. the you hit driven month cut half. advantage by see As deliberate later Most March MBS agency this particular on rebound, this we portfolio in the we taking Agency
other and like follow. recover MBS products Just with then of other periods QE, structured first sectors agency
up was volatility sell pools. market most more struck, was the way to MBS our pay to specified So prudent cash securities, the especially view generic as the our raise low
taking more become Now has that more of shifted available taking markets the account potential and towards the of into credit advantage focus have our managing stable, consequences COVID. opportunities our exposure long-term tremendous
values too transfer pretty For high. In risk in such seems sectors yields opinion, some uncertainty even credit others that the asset while sufficient to to confidence with clear our great have securities. as are for conservative seems assumptions, us very it still
our the we and take with planning now non-QM income our originations temporarily response into And account new In potentially we lending March's levels of but business. with programs these factors Turning that weaker prices. updated a lower to now on stopped volatility, are real including to to higher effects guidelines restart economy unemployment of levels. estate
The that was so February well big XXXX borrower for between XXXX demand the and non-QM was there lending performing a is reason product.
be capital disciplined volume. could credit still on So like and us, generate providers
close WXs the systems low underwriting for The cost we've GSCs repay. XXXX the picture automated low Form producer with to their income a borrowers rates most where are mortgage and their ability to IOs and of complete
applicants. mortgage residential of XX% about covers probably That
XX%, makes that. lot we demand. sense, the change If a and opportunity anything, compelling the non-QM the more For even of think does COVID nothing in and makes it to other business non-QM line
a This borrowers other borrowers, mortgage KX substantial XX% many retired might rental income. of financial applicants self-employed XXXX of who limited many assets, no lot income, but many to includes and be or borrowers with with
non-QM are who investment credit when to the non-QM strong includes thoughtfully an quality date, testament qualified These the borrowers high through LLC. to property underwritten, the securitization that they're are want very is responsibly an to our might non-QM many loans And serves. loans. in a buy fact also It highly that performance borrowers
see borrower continued additional the segment non-QM another time, non-QM also traditional from same we for that we demand residential loans are the borrowers. some think from to at base, mortgage predicting demand that the we'll Meanwhile,
toward credit the I'm to become will who creditworthy the quite tightening box. that have borrowers who box large uncertainty exclude the Specifically, strong non-QM be very GSE credit transfer edges returning of market, happen some seemed their we expect credit to for the future candidates and with certain number potentially loans. risk may to them Faced characteristics this of creditworthy borrowers of GSEs put that current about the
there headaches need be there borrowers portfolio? Will in our Will there spike? Absolutely. Yes. Will be forbearance? Yes. that non-QM delinquency be a
in data. see can You that already the
So on pronged. right our two focus is now non-QM
with partnership those time our with income. working payment who servicers. because their to We're obligations is they the need are First loss of borrowers pause experiencing
Secondly, we are quality planning and for with economic environment. more the to loans resume originating uncertain guidelines high appropriate current
the as especially the much up, affected as in fundamentals non-QM loans. to by wide non-QM will triggered the Although issues, market of financing COVID movements that market seized to opposed the with March be performance slowdown the in related securitization price market economic
The non-QM returning slowly be to seems state. more good normal market news to is that the
the we next securitization, non-QM market as month. this securitization in hope with as market expect later market soon We conditions to be to reopen permit. the our And back
a many the it entered about U.S. deferred maintenance We're similar want lot thinking residential a transition deal in borrowers of with. now don't and we years, the was is made home XX median a The loans reason buy age to sense. to RTL of with way. market because home The
if partners, LTVs believe be So that pick geographic we on high leverage and we standards. very yield the area, projects right the and the can about right renovation We performance disciplined that strong have portfolio. pick underwriting pick right
quarter loans. shock. Amazingly, for the credit hoping And of we those was between Xst shows benefit of paid kind off our really the shorter the par. March and it RTL we during having were outcome duration a XXth, of April when about at That portfolio assets underwrote
our being third outcome. a careful far par a sold of experienced March. have outcome forced in doubt underwriting in seller at of the the week than But highly got I better during and loans it. the It's we that panic us March? those team Could our combination
expect is Yes. many we see We color better portfolios. gotten net Will than some RTL have losses? much Do some it do. other from But be the market like portfolio headaches there looks credit to performing we our portfolio?
Some in again. new of March, non-QM, we temporarily originations start off buying we want shut to
buy. We secondary consumer guiding are our packages and to for our looking thought loan same process guidelines reformulating The portfolio.
the COVID numbers back off. so the appropriately our have Despite way cut performance pay need. more with have very partners we in visibility, Until to encouraging. And we a dislocation, we borrowers of velocity working But see purchases. substantial have are new continued are help we on to far, par
also Our its low small get quarter. outlook balance area as shorter the LTVs and to commercial [ph] our real is real But estate. strategy as It missing will for the headaches, well. six your strategy things shared for duration commercial also this great have in some resolutions had next a help months again, in estate in than should residential lot them
said, that All this lumps took quarter. we our certainly
As two forms. portfolio always, the one took in of losses credit
First prices market mark-to-market in we investments. big losses the down don't cash widened. the flows, went had expect on We because but change a the yields
wider because loss or impairment, degree And investments that second, we have spreads, mark-to-market is flow kind not project witnessed we fundamental on that of of but yield had just losses likely are some we be some cash were market also due permanent. to to
what forward. is notable selling previous speed March occurred. we will happened forced crisis and and shape it which the learn EFC the the One going from difference between So of direction and financial crisis what how drop in at March prices did the in
the to normal yield OAF to since week, is the unexpected. over proving wide [ph], spreads unpredictable, the level XXXX fours of from not example for the widest crisis. a be have that more we the two Fannie of course just expect We did financial on anticipate to COVID could
there there volatility COVID another from, next to health else wherever of comes something to tensions else, prepared could or shot weather be we around something from could trade stand related, The or public global to hopefully be geopolitical. thrive be more related could wave crisis But shot it. or need the and be to
stronger that? to the us I So experience do securitizations. incentive of couple gives you months how do do past even the think
like financing when may they times securitizations plenty it to repo not of worth of way seems non cost There financing. into transform make, time and mark-to-market a As be commitment it. the term are doing
XXXX, done reserve March had repo financed securitized having two well worth a with it. we If non-term past or have been all that cash would years, had was In we balance a to calls. over them sheet times, potential lot like on loans sitting margin more the have
far well, the chosen guidelines we've we've carefully the helped peer our relative so origination be partners shape Secondly, where loans performing from seem and to sourced group. underwriting to channels their
very originator continue you're inclined the in If work decisions. more to we're tandem to aligned make partnerships, look for credit to with and
MBS on buying. has Agency of sector it MBS a can portfolio. credit stress. balance that governor products been And great Thirdly, be is in Fed portfolio from agency structured important times reaffirms of liquidity that this an the benefits for direct primary of spreads
times While without any that agency in market. absolutely to was government And much MBS raise March still liquidity fixed sector were in guarantee. better was at than a efficiently income awful able cash
the EFC like I and So balance credit. had between agencies
back I focused forward, have best sustained loss earn these the of in the doing very be and management Ellington been to and team to Looking on March. markets portfolio rest the navigating
Larry. Now back to
