ARBOR REALTY TRUST INC
For the period ended Sep 30, 2025. Filed Oct 31, 2025.
View on SEC.govAbout this filing
A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Sep 30, 2025 · Filed Oct 31, 2025
ABR$1.61-3.0%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2025-06-30; filed 2025-08-01.
0001253986-25-000014
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2025-09-30; filed 2025-10-31.
0001253986-25-000022
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 157 previous paragraphs and 164 current paragraphs.
89 unchanged; 54 reworded; 16 added; 11 removed; 3 previous and 5 current paragraphs rearranged.
Tables are not compared: 10 previous and 10 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (16)
Current report
•Closed a collateralized securitization vehicle (CLO 20) totaling $1.05 billion, of which $933.2 million consisted of investment grade notes and $116.8 million of below investment grade notes were retained by us;
Current report
•Raised net proceeds of $39.7 million from the issuance of 3,390,207 shares of our common stock at an average price of $11.72 per share.
Current report
•Received cash distributions totaling $67.4 million and recognized income of $48.0 million from our equity investments in Lexford and a residential mortgage banking business (see Note 8 for details); and
Current report
•We foreclosed on two loans with a net carrying value of $107.8 million and charged-off $16.6 million of specific CECL reserves.
Current report
Subsequent Events.
Current report
•In October 2025, we unwound CLO 16, redeeming the remaining outstanding notes totaling $482.1 million; and
Current report
•In October 2025, we foreclosed on five loans with a total UPB of $127.4 million that have specific reserves totaling $17.8 million..
Current report
Investments is equity affiliates decreased $19.0 million, primarily due to $22.0 million in distributions received from the completed sale of the residential mortgage banking business.
Current report
Due from related party increased $17.1 million, primarily due to funds from payoffs to be remitted by our affiliated servicing operations related to real estate transactions at the end of the reporting period. These amounts were remitted to us in October 2025.
Current report
Senior unsecured notes increased $492.1 million, primarily due to our issuance of $500.0 million of 7.875% senior unsecured notes due 2030.
Current report
In August 2025, we fully redeemed our 7.50% convertible senior notes with a remaining outstanding balance of $287.5 million with a portion of the net proceeds received from our 7.875% senior unsecured notes due 2030 that were issued in July 2025.
Current report
The increase in income from MSRs was primarily due to a 90% increase in loan commitment volume ($947.0 million), largely offset by a 38% decrease in the MSR rate from 1.25% to 0.78%. The decrease in the MSR rate was mainly due to higher percentage of Freddie Mac loan commitments which contain lower servicing fees, as well as larger portfolio deals that closed in the quarter that produced lower margins.
Current report
Loss on Real Estate
Current report
In 2025, we sold an REO asset for $10.1 million and recognized a $0.6 million loss.
Current report
The increase in the provision for loss sharing (net of recoveries) primarily reflects larger specific loan impairment reserves taken in the current year period.
Current report
•Fully settled our 7.50% convertible senior notes totaling $287.5 million at maturity.
Removed paragraphs (11)
Previous report
•Closed our first build-to-rent collateralized securitization vehicle totaling $801.9 million, of which $682.6 million consisted of investment grade notes. We retained $41.0 million of the investment grade notes, along with the below investment grade notes totaling $119.3 million.
Previous report
•We foreclosed on 6 loans with a total UPB of $188.2 million, 3 of which we took back the underlying collateral as REO assets totaling $72.3 million and 3 were sold totaling $115.9 million. In addition, we sold an existing $7.1 million REO asset; and
Previous report
•In April 2025, Wakefield entered into an agreement to sell its interest in a residential mortgage banking business (an equity investment we refer to as ARI), as described in Note 8.
Previous report
Investments is equity affiliates decreased $4.5 million, primarily due to distributions totaling $8.5 million received from our investments in a residential mortgage banking business, AWC and Fifth Wall and losses totaling $3.3 million from the residential mortgage business and AMAC III investments, partially offset by contributions totaling $6.5 million made for our investments in AWC, Fifth Wall and AMAC III.
Previous report
Other liabilities decreased $28.6 million, primarily due to payments of accrued incentive compensation and commissions during the first half of 2025, related to 2024 performance, a decrease in accrued interest payable as a result of the unwind of CLOs and paydowns on remaining securitizations and lower current tax liabilities.
Previous report
The decrease in employee compensation and benefits expense was primarily due to decreases in commissions and incentive compensation from lower GSE/Agency loan sales volume and bonus allocation targets.
Previous report
The loss on real estate in 2025 is substantially comprised of losses on below market debt totaling $1.5 million related to financing on the sale of several REO assets. The $3.8 million gain on real estate in 2024 represents the gain recognized on the sale of an REO asset.
Previous report
The decrease in income from MSRs was primarily due to a 26% decrease in loan commitment volume ($535.8 million), partially offset by a 4% increase in the MSR rate from 1.22% to 1.27%.
Previous report
The decrease in employee compensation and benefits expense was primarily due to decreases in commissions and incentive compensation from lower GSE/Agency loan sales volume and bonus allocation targets.
Previous report
(Loss) Gain on Real Estate
Previous report
In July 2025, we amended a repurchase facility to temporarily increase the facility size by $500.0 million, effective through August 2025. We also amended a joint repurchase facility reducing the facility size by $500.0 million and extended the maturity date to July 2027, with a one-year extension option.
Reworded paragraphs (54)
Previous wording
Significant Developments During the Second Quarter of 2025
Current wording
Significant Developments During the Third Quarter of 2025
Previous wording
In July 2025, we issued $500.0 million aggregate principal amount of 7.875% senior unsecured notes due July 2030 in a private offering. We are using a portion of the net proceeds from this offering to repay our remaining outstanding 7.50% convertible notes due August 2025.
Current wording
•Issued $500.0 million aggregate principal amount of 7.875% senior unsecured notes due 2030 through a private offering. A portion of the net proceeds were used to repay the remaining outstanding 7.50% convertible senior notes due August 2025; and
Previous wording
•Balance sheet portfolio of $11.61 billion (up 1%), as loan originations of $716.5 million outpaced loan runoff totaling $519.7 million;
Current wording
•Balance sheet portfolio of $11.71 billion, as loan originations of $956.7 million outpaced loan runoff totaling $734.2 million;
Previous wording
•We modified 8 loans with a total UPB of $251.9 million. Six of these loans with a total UPB of $144.9 million were modified to provide temporary rate relief through a pay and accrual feature (see Note 3 for details);
Current wording
•We modified 19 loans with a total UPB of $808.6 million which were modified to provide temporary rate relief through a pay and accrual feature (see Note 3 for details);
Previous wording
Agency Business Activity. Servicing portfolio of $33.76 billion (up $277.7 million); Agency originations of $857.1 million, including $88.5 million of new Agency loans that were recaptured from our structured Business runoff.
Current wording
Agency Business Activity. Servicing portfolio of $35.17 billion (up $1.41 billion); Agency originations of $1.98 billion, including $391.2 million of new Agency loans that were recaptured from our Structured Business runoff.
Previous wording
During 2024, the Federal Reserve lowered the federal funds rate three times totaling a 100-basis point reduction, which marked the first rate cuts since 2020. Although short-term rates are predicted to continue to decline with additional rate cuts of up to 50 basis points in the second half of 2025, we currently remain in a high-interest rate environment, which could persist longer than anticipated if certain key economic indicators fail to align with the Federal Reserve’s expectations. Although short-term interest rates have declined, long-term interest rates have increased significantly and remain highly volatile since the announcement of the current administrator’s imposition of increased tariffs and macroeconomic uncertainty. Since September 2024, the 5-year and 10-year interest rates have increased substantially, with the 10-year rate moving from a low of approximately 3.60% in September 2024 to a high of approximately 4.80% in January 2025 and has recently fluctuated between 4.25% and 4.50%. Analysts currently hold mixed expectations regarding the future trajectory of long-term rates for the remainder of 2025 due to the uncertainty regarding long-term inflation, fiscal policy, increased federal spending and larger deficits as a result of the recent enactment of the One Big Beautiful Bill Act (“OBBBA”), as described below.
Current wording
During 2025, the Federal Reserve has so far lowered the federal funds rate twice totaling a 50-basis point reduction. General consensus is that the Federal Reserve may continue to lower rates in the near term. This high-interest rate environment, that has persisted longer than anticipated, could persist even longer if certain key economic indicators fail to align with the Federal Reserve’s expectations. Although short-term interest rates have declined, long-term interest rates remain highly volatile since the announcement of the current administrator’s imposition of increased tariffs and macroeconomic uncertainty. Analysts currently hold mixed expectations regarding the future trajectory of long-term rates for the remainder of 2025 due to the uncertainty regarding long-term inflation, fiscal policy, increased federal spending and larger deficits as a result of the recent enactment of the One Big Beautiful Bill Act (“OBBBA”), as described below.
Previous wording
This elevated and unpredictable rate environment has resulted in, and may continue to result in, increased payment delinquencies and defaults, increased loan modifications and foreclosures and declining real estate values of certain asset classes, all of which have impacted, and may continue to impact, our future results of operations, financial condition, business prospects and ability to make distributions to our stockholders. Additionally, this high-interest rate environment has created, and may continue to create, increased headwinds for commercial real estate which has led to decreased origination volumes, especially in our GSE/Agency business in 2025, negatively impacting the ability for borrowers to refinance our balance sheet loans with fixed rate agency products. This environment could also limit our ability to resolve delinquent loans, leading to potential additional foreclosures and REO assets on our balance sheet, all of which could have a further material adverse effect on our future results of operations, financial condition, liquidity and ability to make distributions to our stockholders.
Current wording
This elevated and unpredictable rate environment has resulted in, and may continue to result in, increased payment delinquencies and defaults, increased loan modifications and foreclosures and declining real estate values of certain asset classes, all of which have impacted, and may continue to impact, our future results of operations, financial condition, business prospects and ability to make distributions to our stockholders. Additionally, this high-interest rate environment has limited our ability to resolve delinquent loans, leading to additional foreclosures and REO assets on our balance sheet, all of which could have a further material adverse effect on our future results of operations, financial condition, liquidity and ability to make distributions to our stockholders.
Previous wording
In general, a rising or high-interest rate environment positively impacts our net interest income since our structured loan portfolio exceeds our corresponding debt balances, and the vast majority of our loan portfolio is floating rate based on SOFR. Additionally, since a sizeable portion of our debt consists of fixed-rate instruments (such as senior unsecured notes), as compared to our structured loan portfolio, the increase in interest income from high interest rates tends to outpace the rise in interest expense on our debt. Furthermore, our earnings on escrows and cash balances also benefit from an elevated rate environment. However, the prolonged period of elevated interest rates has also led to an increase in loan delinquencies, a decrease in loan originations and lower cash and escrow balances, which is having, and may continue to have, a negative impact on our net interest income. Additionally, the prolonged high-interest rate environment has contributed to a decline in certain commercial real estate values, leading to increased reserves, when the collateral value is considered insufficient to fully repay the loans.
Current wording
In general, a rising or high-interest rate environment positively impacts our net interest income since our structured loan portfolio exceeds our corresponding debt balances, and the vast majority of our loan portfolio is floating rate based on SOFR. Additionally, since a sizable portion of our debt consists of fixed-rate instruments (such as senior unsecured notes), as compared to our structured loan portfolio, the increase in interest income from high interest rates tends to outpace the rise in interest expense on our debt. Furthermore, our earnings on escrows and cash balances also benefit from an elevated rate environment. However, the prolonged period of elevated interest rates has also led to a significant increase in loan delinquencies, modifications, foreclosures and decreases in loan originations and cash and escrow balances, which is having, and may continue to have, a negative impact on our net interest income. Additionally, the prolonged high-interest rate environment has contributed to a decline in certain commercial real estate values, leading to increased reserves, when the collateral value is considered insufficient to fully repay the loans.
Previous wording
The elevated and volatile interest rates, along with geopolitical uncertainty, has caused some disruptions in certain segments of the financial services, real estate, and credit markets, leading to tighter liquidity conditions. Despite these periodic disruptions, we have been successful in raising capital through various vehicles, when needed, to continue to operate and strengthen our business.
Current wording
The elevated and volatile interest rates, along with geopolitical uncertainty, has caused some disruptions in certain segments of the financial services, real estate and credit markets. As stated earlier, this environment has also caused a decrease in the performance of certain of our assets, leading to increased defaults and delinquencies. If our borrowers and their tenants continue to be impacted by these adverse economic and market conditions, or by the other risks disclosed in our filings with the SEC, it could have a material adverse effect on our liquidity and capital resources. Despite these periodic disruptions, we have been successful in raising capital through various vehicles, when needed, to continue to operate and strengthen our business. Additionally, although the majority of our cash is currently on deposit with major financial institutions, our balances often exceed insured limits. We limit the exposure relating to these balances by diversifying them among various counterparties. Generally, deposits may be redeemed upon demand and are maintained at financial institutions with reputable credit and, therefore, we believe we bear minimal credit risk.
Previous wording
We are a national originator with Fannie Mae and Freddie Mac, and the GSEs remain the most significant providers of capital to the multifamily market. FHFA set its 2025 Caps for Fannie Mae and Freddie Mac at $73 billion for each enterprise for a total opportunity of $146 billion, which is an increase from its 2024 Caps of $70 billion for each enterprise. FHFA stated they will continue to monitor the market and reserves the right to increase the 2025 Caps if warranted, however, they will not reduce the 2025 Caps if the market is smaller than initially projected. To promote affordable housing preservation, loans classified as supporting workforce housing properties will be exempt from the 2025 Caps. Workforce housing loans preserve rents at affordable levels in multifamily properties, typically without the use of public subsidies. The 2025 Caps will continue to mandate that at least 50% be directed towards mission driven, affordable housing, with affordability levels corresponding to 80%-120% of area median income, depending on the market. Our originations with the GSEs are highly profitable executions as they provide significant gains from the sale of our loans, non-cash gains related to MSRs, and servicing revenues. As discussed above, the current high-interest rate environment could lead to a continued decline in our GSE originations, which could continue to negatively impact our financial results. We are also unsure whether FHFA will impose stricter limitations on GSE multifamily production volume in the future.
Current wording
We are a national originator with Fannie Mae and Freddie Mac, and the GSEs remain the most significant providers of capital to the multifamily market. FHFA set its 2025 Caps for Fannie Mae and Freddie Mac at $73 billion for each enterprise for a total opportunity of $146 billion, which is an increase from its 2024 Caps of $70 billion for each enterprise. FHFA stated they will continue to monitor the market and reserves the right to increase the 2025 Caps if warranted, however, they will not reduce the 2025 Caps if the market is smaller than initially projected. To promote affordable housing preservation, loans classified as supporting workforce housing properties will be exempt from the 2025 Caps. Workforce housing loans preserve rents at affordable levels in multifamily properties, typically without the use of public subsidies. The 2025 Caps will continue to mandate that at least 50% be directed towards mission driven, affordable housing, with affordability levels corresponding to 80%-120% of area median income, depending on the market. Our originations with the GSEs are highly profitable executions as they provide significant gains from the sale of our loans, non-cash gains related to MSRs and servicing revenues. We are also unsure whether FHFA will impose stricter limitations on GSE multifamily production volume in the future.
Previous wording
Our Structured loan and investment portfolio balance was $11.61 billion and $11.30 billion at June 30, 2025 and December 31, 2024, respectively. This increase was primarily due to loan originations exceeding loan runoff by $522.0 million (see below for details), partially offset by loans we foreclosed on and received ownership of the underlying collateral as REO assets.
Current wording
Our Structured loan and investment portfolio balance was $11.71 billion and $11.30 billion at September 30, 2025 and December 31, 2024, respectively. This increase was primarily due to loan originations exceeding loan runoff by $744.5 million (see below for details), partially offset by loans we foreclosed on and received ownership of the underlying collateral as REO assets.
Previous wording
The portfolio had a weighted average current interest pay rate of 7.03% and 6.90% at June 30, 2025 and December 31, 2024, respectively. Including certain fees earned and costs, the weighted average current interest rate was 7.86% and 7.80% at June 30, 2025 and December 31, 2024, respectively. Our debt that finances our Structured loan and investment portfolio totaled $9.61 billion and $9.46 billion at June 30, 2025 and December 31, 2024, respectively, with a weighted average funding cost of 6.52% and 6.55%, respectively, which excludes financing costs. Including financing costs, the weighted average funding rate was 6.88% at both June 30, 2025 and December 31, 2024.
Current wording
The portfolio had a weighted average current interest pay rate of 6.64% and 6.90% at September 30, 2025 and December 31, 2024, respectively. Including certain fees earned and costs, the weighted average current interest rate was 7.27% and 7.80% at September 30, 2025 and December 31, 2024, respectively. Our debt that finances our Structured loan and investment portfolio totaled $9.93 billion and $9.46 billion at September 30, 2025 and December 31, 2024, respectively, with a weighted average funding cost of 6.39% and 6.55%, respectively, which excludes financing costs. Including financing costs, the weighted average funding rate was 6.72% and 6.88%, at September 30, 2025 and December 31, 2024. respectively.
Previous wording
Loans held-for-sale from the Agency Business decreased $74.3 million, primarily from loan sales exceeding originations by $74.9 million as noted in the following table. Activity from our Agency Business portfolio is comprised of the following (in thousands):
Current wording
Loans held-for-sale from the Agency Business decreased $116.6 million, primarily from loan sales exceeding originations by $118.6 million as noted in the following table. Activity from our Agency Business portfolio is comprised of the following (in thousands):
Previous wording
Real estate owned increased $188.6 million, primarily due to the foreclosure of ten multifamily bridge loans, through which we took back the underlying collateral, partially offset by the sale of three multifamily properties.
Current wording
Real estate owned increased $294.8 million, primarily due to the foreclosure of twelve multifamily bridge loans totaling $368.1 million, through which we took back the underlying collateral, partially offset by the sale of four multifamily properties.
Previous wording
Credit and repurchase facilities increased $1.16 billion, primarily due to refinancing loans from the unwind of two CLOs with our new $1.15 billion repurchase facility and loan originations exceeding runoff in our Structured Business, partially offset by transferring loans into BTR CLO 1.
Current wording
Credit and repurchase facilities increased $564.1 million, primarily due to refinancing loans from the unwind of two CLOs with our new $1.15 billion repurchase facility and loan originations exceeding runoff in our Structured Business, partially offset by transferring loans into BTR CLO 1 and CLO 20.
Previous wording
Securitized debt decreased $1.11 billion, primarily due to the unwind of CLO 14 and CLO 19 totaling $1.08 billion and paydowns on our existing securitizations of $519.7 million, partially offset by the issuance of BTR CLO 1 where we issued $491.4 million of notes to third-party investors.
Current wording
Securitized debt decreased $454.3 million, primarily due to the unwind of CLO 14 and CLO 19 totaling $1.08 billion and paydowns on our existing securitizations of $852.1 million, partially offset by the issuances of BTR CLO 1 and CLO 20 where we issued $1.49 billion of notes to third-party investors.
Previous wording
Mortgage notes payable — real estate owned increased $109.7 million, primarily due to the addition of mortgage notes payable totaling $158.9 million on new REO assets and financing received on an existing REO asset, partially offset by the payoff of $49.1 million of mortgage notes payable associated with the sale of REO assets.
Current wording
Mortgage notes payable — real estate owned increased $115.8 million, primarily due to the addition of mortgage notes payable totaling $164.9 million on new REO assets and financing received on an existing REO asset, partially offset by the payoff of $49.1 million of mortgage notes payable associated with the sale of REO assets.
Previous wording
(2)Delinquent loans reflect loans that are contractually 60 days or more past due. At June 30, 2025 and December 31, 2024, delinquent loans totaled $735.0 million and $524.5 million, respectively. At June 30, 2025, there was one loan totaling $24.4 million in bankruptcy and eighteen loans totaling $95.3 million have been foreclosed. At December 31, 2024, there were two loans totaling $4.8 million in bankruptcy and six loans totaling $28.2 million were foreclosed.
Current wording
(2)Delinquent loans reflect loans that are contractually 60 days or more past due. At September 30, 2025 and December 31, 2024, delinquent loans totaled $832.8 million and $524.5 million, respectively. At September 30, 2025, there was one loan totaling $24.4 million in bankruptcy and 19 loans totaling $104.7 million have been foreclosed. At December 31, 2024, there were two loans totaling $4.8 million in bankruptcy and six loans totaling $28.2 million were foreclosed.
Previous wording
The decrease in interest income was mainly due to a $52.1 million decrease from our Structured Business. The decline was primarily due to a decrease in the average yield on core interest-earning assets and a decrease in the average balance of our core interest-earning assets, as loan runoff exceeded loan originations in 2024. The decrease in the average yield was mainly from a decrease in SOFR and a reduction in back interest earned on delinquent and modified loans, as well as an increase in new delinquencies. To a lesser extent, the decline also reflects a decrease in interest earned on our cash balances, as a result of lower average balances and a decrease in SOFR.
Current wording
The decrease in interest income was mainly due to a $65.8 million decrease from our Structured Business. The decline was primarily due to a decrease in the average yield on core interest-earning assets and, to a lesser extent, a decrease in the average balance of our core interest-earning assets (loan runoff exceeded loan originations in 2024) and lower average bank balances. The decrease in the average yield was mainly from a decrease in SOFR, the reversal of interest that was previously accrued on modified loans and a reduction in back interest earned on delinquent and modified loans, as well as an increase in new delinquencies and modified loans at lower rates.
Previous wording
The decrease in interest expense was mainly due to a $88.2 million decrease from our Structured Business, primarily due to a decline in the average balance of our interest-bearing liabilities, from loan runoff and note paydowns in our securitizations and senior unsecured notes, and a decrease in the average cost of interest-bearing liabilities, mainly from a decrease in SOFR.
Current wording
The decrease in interest expense was mainly due to a $16.8 million decrease from our Structured Business, primarily due to a reduction in the average cost of interest-bearing liabilities (mainly from a decrease in SOFR) and a decline in the average balance of our interest-bearing liabilities from a decrease in the average loan portfolio, note paydowns in our securitizations and the payoff of our 7.50% convertible senior notes.
Previous wording
The decrease in gain on sales, including fee-based services, net was primarily due to a 29% decrease in loan sales volume ($328.3 million), partially offset by a 10% increase in the sales margin from 1.54% to 1.69%. The increase in the sales margin was mainly due to the portfolio mix in 2025 that produced higher margins.
Current wording
The increase in gain on sales, including fee-based services, net was primarily due to a 81% increase in loan sales volume ($907.8 million), partially offset by a 31% decrease in the sales margin from 1.67% to 1.15%. The decrease in the sales margin was mainly due to larger portfolio deals that closed in the current quarter that produced lower margins.
Previous wording
The decrease in servicing revenue, net was primarily due to a decrease in earnings on escrow balances from lower average balances and a decrease in the applicable interest rate.
Current wording
The decrease in servicing revenue, net was primarily due to a decrease in earnings on escrow balances from lower average balances and a decrease in the applicable interest rate, partially offset by an increase in servicing fees due to growth in our servicing portfolio.
Previous wording
The increase in other income, net was primarily due to increases in the fair values of our Private Label loans and loan fees from our Agency Business.
Current wording
The increase in other income, net was primarily due to increases in loan fees from higher loan originations.
Previous wording
The increase in the provision for loss sharing (net of recoveries) reflects an increase in general reserves as a result of portfolio growth.
Current wording
The increase in the provision for loss sharing (net of recoveries) primarily reflects larger specific loan impairment reserves taken in the current year period as a result of an increase in delinquencies.
Previous wording
The decrease in the provision for credit losses (net of recoveries) was primarily related to general improvements in the forecasted outlook for commercial real estate in 2025 and a decrease in specifically impaired loans, net of recoveries.
Current wording
The increase in the provision for credit losses (net of recoveries) was primarily related to an increase in specific reserves recorded on multifamily loans and the weakening in the general macroeconomic outlook of the commercial real estate market in the current year period.
Previous wording
Income from equity affiliates in 2025 primarily reflects a $3.4 million distribution received from our Lexford joint venture and income of $0.8 million from our Fifth Wall investment, partially offset by losses from our investments in a residential mortgage banking business and AMAC III totaling $3.3 million. Income from equity affiliates in 2024 primarily reflects a $4.2 million distribution received from Lexford and $0.8 million in income from our investment in a residential mortgage banking business, partially offset by a $1.2 million loss from our AMAC III investment.
Current wording
Income from equity affiliates in 2025 primarily reflects $48.0 million of income recognized related to the cash distribution received from our Lexford joint venture; while income in 2024 primarily reflects a $4.9 million cash distribution received from Lexford, partially offset by losses from our investments in a residential mortgage banking business and AMAC III totaling $1.5 million.
Previous wording
In the three months ended June 30, 2025, we recorded a tax provision of $3.4 million, which consisted of a current tax provision of $5.0 million and a deferred tax benefit of $1.6 million. In the three months ended June 30, 2024, we recorded a tax provision of $3.9 million, which consisted of a current tax provision of $6.8 million and a deferred tax benefit of $2.9 million.
Current wording
In the three months ended September 30, 2025, we recorded a tax provision of $7.6 million, which consisted of a current tax provision of $9.4 million and a deferred tax benefit of $1.8 million. In the three months ended September 30, 2024, we recorded a tax provision of $5.2 million, which consisted of a current tax provision of $7.2 million and a deferred tax benefit of $2.0 million.
Previous wording
The noncontrolling interest relates to the outstanding OP Units (see Note 16). There were 16,173,761 and 16,293,589 OP Units outstanding at June 30, 2025 and 2024, respectively, which represented 7.8% and 8.0% of our outstanding stock at June 30, 2025 and 2024, respectively.
Current wording
The noncontrolling interest relates to the outstanding OP Units (see Note 16). There were 16,173,761 and 16,293,589 OP Units outstanding at September 30, 2025 and 2024, respectively, which represented 7.6% and 8.0% of our outstanding stock at September 30, 2025 and 2024, respectively.
Previous wording
Comparison of Results of Operations for the Six Months Ended June 30, 2025 and 2024
Current wording
Comparison of Results of Operations for the Nine Months Ended September 30, 2025 and 2024
Previous wording
The decrease in interest income was mainly due to a $129.9 million decrease from our Structured Business. The decline was primarily due to a decrease in the average yield on core interest-earning assets and a decrease in the average balance of our core interest-earning assets, as loan runoff exceeded loan originations in 2024. The decrease in the average yield was mainly from a decrease in SOFR and a reduction in back interest earned on delinquent and modified loans, as well as an increase in new delinquencies. To a lesser extent, the decline also reflects a decrease in interest earned on our cash balances, as a result of lower average balances and a decrease in SOFR.
Current wording
The decrease in interest income was mainly due to a $195.7 million decrease from our Structured Business. The decline was primarily due to a decrease in the average yield on core interest-earning assets and, to a lesser extent, a decrease in the average balance of our core interest-earning assets (loan runoff exceeded loan originations in 2024) and lower average bank balances. The decrease in the average yield was mainly from a decrease in SOFR, the reversal of interest that was previously accrued on modified loans and a reduction in back interest earned on delinquent and modified loans, as well as an increase in new delinquencies and modified loans at lower rates.
Previous wording
The decrease in interest expense was mainly due to a $37.2 million decrease from our Structured Business, primarily due to a decline in the average balance of our interest-bearing liabilities, from loan runoff and note paydowns in our securitizations and senior unsecured notes, and a decrease in the average cost of interest-bearing liabilities, mainly from a decrease in SOFR.
Current wording
The decrease in interest expense was mainly due to a $105.0 million decrease from our Structured Business, primarily due to a decline in the average balance of our interest-bearing liabilities (from a decrease in the average loan portfolio and note paydowns in our securitizations) and a reduction in the average cost of interest-bearing liabilities (mainly from a decrease in SOFR).
Previous wording
The decrease in gain on sales, including fee-based services, net was primarily due to a 31% decrease in loan sales volume ($682.8 million), partially offset by a 12% increase in the sales margin from 1.54% to 1.72%. The increase in the sales margin was mainly due to the portfolio mix in 2025 that produced higher margins.
Current wording
The decrease in gain on sales, including fee-based services, net was primarily due to a 12% decrease in the sales margin from 1.58% to 1.40%, partially offset by a 7% increase in loan sales volume ($225.1 million). The decrease in the sales margin was mainly due to the portfolio mix and larger portfolio deals in 2025 that produced lower margins.
Previous wording
The decrease in income from MSRs was primarily due to a 22% decrease in loan commitment volume ($246.9 million).
Current wording
The decrease in income from MSRs was primarily due to a 20% decrease in the MSR rate from 1.23% to 0.99%, partially offset by a 13% increase in loan commitment volume ($411.3 million). The decrease in the MSR rate was mainly due to a decrease in the Fannie Mae MSR rates from lower servicing rates on newer loans, as well as larger portfolio deals in 2025 that produced lower margins.
Previous wording
The decrease in servicing revenue, net was primarily due to a decrease in earnings on escrow balances from lower average balances and a decrease in the applicable interest rate.
Current wording
The decrease in servicing revenue, net was primarily due to a decrease in earnings on escrow balances from lower average balances and a decrease in the applicable interest rate, partially offset by an increase in servicing fees due to growth in our servicing portfolio.
Previous wording
The increase in other income, net was primarily due to increases in the fair values of our Private Label loans and loan fees from our Agency Business.
Current wording
The increase in other income, net was primarily due to increases in the fair values of our Private Label loans and loan fees from higher loan originations.
Previous wording
The loss on real estate in 2025 is comprised of $4.3 million in loss on below market debt related to financing on the sale of several existing REO assets and a $1.8 million loss on the foreclosure of loans we took back as REO assets, partially offset by a $1.9 million gain on the REO sales. The $3.8 million gain on real estate in 2024 represents the gain recognized on the sale of an REO asset.
Current wording
The loss on real estate in 2025 is comprised of a $4.7 million loss on below market debt related to financing the sale of several REO assets and a $1.7 million loss on the foreclosure of loans we took back as REO assets, partially offset by a $1.6 million gain on REO sales. In 2024, we sold a real estate owned asset for $14.2 million and recognized a $3.8 million gain.
Previous wording
Income from equity affiliates in 2025 primarily reflects a $3.4 million distribution received from our Lexford joint venture, partially offset by a $1.0 million loss from our AMAC III investment; while income in 2024 primarily reflects a $4.2 million distribution received from Lexford, partially offset by losses from our investments in a residential mortgage banking business and AMAC III totaling $1.5 million.
Current wording
Income from equity affiliates in 2025 primarily reflects $51.4 million of income recognized related to the cash distributions received from our Lexford joint venture, partially offset by losses from our investments in AMAC III and a residential mortgage banking business totaling $4.4 million; while income in 2024 primarily reflects $9.0 million in cash distributions received from Lexford, partially offset by a $1.7 million loss from our AMAC III investment.
Previous wording
In the six months ended June 30, 2025, we recorded a tax provision of $7.0 million, which consisted of a current tax provision of $8.7 million and a deferred tax benefit of $1.7 million. In the six months ended June 30, 2024, we recorded a tax provision of $7.5 million, which consisted of a current tax provision of $14.4 million and a deferred tax benefit of $6.9 million.
Current wording
In the nine months ended September 30, 2025, we recorded a tax provision of $14.6 million, which consisted of a current tax provision of $18.1 million and a deferred tax benefit of $3.5 million. In the nine months ended September 30, 2024, we recorded a tax provision of $12.7 million, which consisted of a current tax provision of $21.6 million and a deferred tax benefit of $8.9 million
Previous wording
The noncontrolling interest relates to the outstanding OP Units (see Note 16). There were 16,173,761 and 16,293,589 OP Units outstanding at June 30, 2025 and 2024, respectively, which represented 7.8% and 8.0% of our outstanding stock at June 30, 2025 and 2024, respectively.
Current wording
The noncontrolling interest relates to the outstanding OP Units (see Note 16). There were 16,173,761 and 16,293,589 OP Units outstanding at September 30, 2025 and 2024, respectively, which represented 7.6% and 8.0% of our outstanding stock at September 30, 2025 and 2024, respectively.
Previous wording
The elevated and volatile interest rates, along with geopolitical uncertainty, has caused some disruptions in certain segments of the financial services, real estate, and credit markets, leading to tighter liquidity conditions. The increased cost of credit, or degradation in debt financing terms, has impacted, and may continue to impact, our ability to identify and execute investments on attractive terms, or at all. If our financing sources, borrowers and their tenants continue to be impacted by these adverse economic and market conditions, or by the other risks disclosed in our filings with the SEC, it would have a material adverse effect on our liquidity and capital resources.
Current wording
The elevated and volatile interest rates, along with geopolitical uncertainty, has caused some disruptions in certain segments of the financial services, real estate and credit markets. As stated earlier, this environment has also caused a decrease in the performance of certain of our assets, leading to increased defaults and delinquencies. If our borrowers and their tenants continue to be impacted by these adverse economic and market conditions, or by the other risks disclosed in our filings with the SEC, it could have a material adverse effect on our liquidity and capital resources.
Showing the first 40 of 54 pairs. Open the source sections for the rest.
Rearranged current paragraphs (5)
Current report — wording carried from elsewhere
The gains and losses on derivative instruments in 2025 and 2024 were related to changes in the fair values of our forward sale commitments and swaps held by our Agency Business as a result of changes in market interest rates as well as from the timing of GSE Agency loan sales.
Current report — wording carried from elsewhere
This elevated and unpredictable rate environment has resulted in, and may continue to result in, increased payment delinquencies and
Current report — wording carried from elsewhere
defaults, increased loan modifications and foreclosures and declining real estate values of certain asset classes, all of which have
Current report — wording carried from elsewhere
impacted, and may continue to impact, our future results of operations, financial condition, business prospects and ability to make
Current report — wording carried from elsewhere
distributions to our stockholders. Additionally, this high-interest rate environment has limited our ability to resolve delinquent loans, leading to additional foreclosures and REO assets on our balance sheet, all of which could have a further material adverse effect on our future results of operations, financial condition, liquidity and ability to make distributions to our stockholders.
Rearranged previous paragraphs (3)
Previous report — wording carried elsewhere
The increased cost of credit, or degradation in debt financing terms, has impacted, and may continue to impact, our ability to identify and execute investments on attractive terms, or at all. Additionally, although the majority of our cash is currently on deposit with major financial institutions, our balances often exceed insured limits. We limit the exposure relating to these balances by diversifying them among various counterparties. Generally, deposits may be redeemed upon demand and are maintained at financial institutions with reputable credit and, therefore, we believe we bear minimal credit risk.
Previous report — wording carried elsewhere
The increase in selling and administrative expenses was primarily due to increases in legal and professional fees.
Previous report — wording carried elsewhere
This elevated and unpredictable rate environment has resulted in, and may continue to result in, increased payment delinquencies and defaults, increased loan modifications and foreclosures and declining real estate values of certain asset classes, all of which have impacted, and may continue to impact, our future results of operations, financial condition, business prospects and ability to make distributions to our stockholders. Additionally, this high-interest rate environment has created, and may continue to create, increased headwinds for commercial real estate which has led to decreased origination volumes, especially in our GSE/Agency business in 2025, negatively impacting the ability for borrowers to refinance our balance sheet loans with fixed rate agency products. This environment could also limit our ability to resolve delinquent loans, leading to potential additional foreclosures and REO assets on our balance sheet, all of which could have a further material adverse effect on our future results of operations, financial condition, liquidity and ability to make distributions to our stockholders.