4 unchanged sentences
We also own real estate (or REO), which is typically acquired as a result of the foreclosure or other liquidation of delinquent whole loans in connection with our loan investment activities.
−Removed: • Residential mortgage securities, including Agency MBS, Non-Agency MBS, CRT securities and MSR-related assets, which include term notes backed directly or indirectly by MSRs.
+Added: • Residential mortgage securities, including Agency MBS, Non-Agency MBS and CRT securities.
Our principal business objective is to deliver shareholder value through the generation of distributable income and through asset performance linked to residential mortgage credit fundamentals.
1 unchanged sentence
We are an internally-managed real estate investment trust (or REIT).
−Removed: 2024 was a volatile year with mixed results for fixed income products, including the residential mortgage assets that we invest in and finance.
−Removed: Investors continued to adjust to volatile conditions resulting from a number of macroeconomic challenges, including:
−Removed: monetary policy;
−Removed: the Federal Reserve’s first interest rate cut in four years, and the ongoing uncertainty as to the timing and extent of future rate cuts in light of ongoing inflationary challenges and generally resilient macroeconomic data;
−Removed: geopolitical uncertainty both in the U.S.
−Removed: uncertainly with respect to U.S.
−Removed: policy in light of the new U.S.
−Removed: Presidential administration;
−Removed: and the potential for recession.
−Removed: We sought to address these challenges by continuing to prioritize liquidity, prudently hedging our exposure to interest rates, and using loan securitizations to replace floating rate recourse mark-to-market financing with fixed rate non-recourse, non-mark-to-market financing.
+Added: 2025 delivered strong fixed income returns as markets benefited from a shift in monetary policy and continued macroeconomic resilience.
+Added: Credit spreads tightened and the yield curve steepened over the year, with yields on two-year Treasuries declining by 78 basis points while ten-year Treasuries declined by 43 basis points.
+Added: The Bloomberg US Aggregate Index returned 7.3% for the year, marking its strongest annual performance in five years.
+Added: We capitalized on these constructive market conditions by accelerating the pace of capital deployment, benefiting from increased price stability and a favorable lending environment.
+Added: While market conditions have improved and recession risks have moderated, we have maintained our emphasis on preserving sufficient liquidity, prudently managing our interest rate exposure, and using loan securitizations to minimize our exposure to margin risk.
We were incorporated in Maryland on July 24, 1997 and began operations on April 10, 1998.
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At the end of 2025, residential whole loan investments comprised approximately 68% of our assets and 59% of our allocated net equity.
−Removed: During 2025, assuming economic conditions continue to support markets for residential mortgage assets, we expect to continue pursuing investment opportunities primarily focused on residential whole loans as market opportunities arise.
+Added: During 2026, assuming economic conditions continue to support markets for residential mortgage assets, we expect to continue pursuing investment opportunities, focused primarily on residential whole loans and Agency MBS as market opportunities arise.
We expect that our investment activities will continue to be financed primarily through a combination of securitization transactions, term loan warehouse financing and repurchase agreement financing.
1 unchanged sentence
$8.8 billion, or approximately 71%, of residential whole loans (compared to $8.8 billion, or 83%, at December 31, 2024);
−Removed: $1.5 billion, or 14%, of residential mortgage securities (compared to $746.1 million, or 7%, at December 31, 2023);
−Removed: and $299.5 million, or 3%, of remaining
−Removed: investment-related assets, comprised primarily of REO, capital contributions made to loan origination partners, other interest-earning assets, and loan-related receivables (compared to $327.1 million, or 3% at December 31, 2023).
+Added: $3.4 billion, or 27%, of residential mortgage securities (compared to $1.5 billion, or 14%, at December 31, 2024);
+Added: and $301.2 million, or 2%, of remaining investment-related assets, comprised primarily of REO, capital contributions made to loan origination partners, other interest-earning assets, and loan-related receivables (compared to $299.5 million, or 3% at December 31, 2024).
Residential Whole Loans
−Removed: During 2024, we continued to acquire or originate residential whole loans, with the majority of our additions for the year originated by Lima One.
+Added: During 2025, we continued to acquire or originate residential whole loans, with the majority of our additions being Non-QM loans.
Our Residential whole loan portfolio includes primarily:
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We also own REO property as a result of managing the resolution of non-performing loans.
−Removed: The volume of REO properties increased during the year, as a result of higher resolutions of non-performing loans via foreclosure in 2024.
+Added: The aggregate value of REO properties fluctuates based on the timing of resolutions of non-performing loans, valuation adjustments, and ultimate sales or disposal of properties.
Securities, at Fair Value
−Removed: We invest in residential mortgage securities, including Agency MBS, Non-Agency MBS, CRT securities and MSR-related assets, which include term notes backed directly or indirectly by MSRs.
+Added: We invest in residential mortgage securities, primarily Agency MBS, as well as Non-Agency MBS and CRT securities.
During 2025, we opportunistically added $2.1 billion of Agency MBS.
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EMPLOYEES/HUMAN CAPITAL MANAGEMENT
−Removed: At December 31, 2024, we had approximately 348 employees, including 285 employees working in our Lima One subsidiary.
+Added: At December 31, 2025, we had 307 employees, including 250 employees working in our Lima One subsidiary.
We believe that investing in and fostering our workforce is a key pillar in operating our business.
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Numerous regulations have been issued pursuant to the Dodd-Frank Act, including regulations regarding mortgage loan servicing, underwriting and loan originator compensation, and others could be issued in the future.
−Removed: As a result, we are unable to fully predict at this time how the Dodd-Frank Act, as well as other laws or regulations that may be adopted in the future, will affect our business, results of operations and financial condition, or the environment for repurchase financing and other forms of borrowing, the investing environment for Agency MBS, Non-Agency MBS and/or residential mortgage loans, the securitization industry, interest rate swap agreements (or Swaps) and other derivatives.
+Added: As a result, we are unable to fully predict at this time how the Dodd-Frank Act, as well as other laws or regulations that may be adopted in the future, will affect our business, results of operations and financial condition, or the environment for repurchase financing and other forms of borrowing, the investing environment for Agency MBS, Non-Agency MBS and/or residential mortgage loans, the securitization industry, interest rate swap agreements and ERIS swap futures (collectively, “Swaps”) and other derivatives.
We believe that the Dodd-Frank Act and the regulations promulgated thereunder are likely to continue to increase the economic and compliance costs for participants in the mortgage and securitization industries, including us.
9 unchanged sentences
housing finance system and the operations of Fannie Mae and Freddie Mac.
−Removed: Congress may continue to consider legislation that would significantly reform the country’s mortgage finance system, including, among other things, eliminating Freddie Mac and Fannie Mae and replacing them with a single new MBS insurance agency.
+Added: Congress and the current presidential administration may continue to consider legislation that would significantly reform the country’s mortgage finance system, including, among other things, eliminating Freddie Mac and Fannie Mae and replacing them with a single new MBS insurance agency.
Many details remain unsettled, including the scope and costs of the agencies’ guarantee and their affordable housing mission, some of which could be addressed even in the absence of large-scale reform.
+Added: On January 2, 2025, the FHFA and the U.S.
+Added: Treasury Department agreed to again amend the PSPAs between the U.S.
+Added: Treasury Department and each of the GSEs to establish a methodical process for eventual public input on the termination of conservatorship to minimize disruption to the housing and financial markets.
While the likelihood of enactment of major mortgage finance system reform in the short term remains uncertain, it is possible that the adoption of any such reforms could adversely affect the types of assets we can buy, the costs of these assets and our business operations.
8 unchanged sentences
Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.