AG Mortgage Investment Trust, Inc.
For the period ended Sep 30, 2025. Filed Nov 7, 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 Nov 7, 2025
MITT$4.45-10.8%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 2025-08-05.
0001514281-25-000086
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2025-09-30; filed 2025-11-07.
0001628280-25-050624
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 300 previous paragraphs and 304 current paragraphs.
194 unchanged; 75 reworded; 34 added; 31 removed; 0 previous and 1 current paragraphs rearranged.
Tables are not compared: 36 previous and 38 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 (34)
Current report
Third Quarter 2025 Executive Summary
Current report
•$10.46 Book Value per share;
Current report
•One Legacy WMC CMBS bond paid off at par for $15.0 million, returning capital of $10.7 million.
Current report
•The table below summaries the four rated securitizations executed during the quarter ended September 30, 2025 (in millions).
Current report
◦Issued an additional $56.6 million of securitized debt from the securitizations acquired from WMC;
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◦Generated net proceeds of $55.4 million for reinvestment through the payoff of the Legacy WMC fixed-rate long-term financing arrangements and subsequent issuance of securitized debt;
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•Amended a financing arrangement to convert financing on our residential mortgage loans with a total borrowing capacity of $400 million from financing with mark-to-market margin calls to financing without mark-to-market margin calls; and
Current report
•Pledged Home Equity Loans with a fair value of $54.0 million under a financing arrangement with the ability to draw on up to $50 million of available contractually committed financing at an advance rate of 87.5% of unpaid principal balance pledged as collateral, which was $50.9 million as of September 30, 2025.
Current report
Throughout the third quarter of 2025, Federal Reserve Chair Jerome Powell maintained a data-dependent stance on monetary policy. The Federal Reserve acknowledged progress on inflation, with both headline and core Consumer Price Index stabilizing around 3%. Nevertheless, achieving the long-term inflation target of 2% remains a key objective. Although the unemployment rate remained relatively low, ongoing labor market weakness supported the case for interest rate cuts. In response, the Federal Open Market Committee reduced the Fed Funds rate by 25 basis points at both its September and October meetings, setting the target range at 3.75% to 4.00%. Overall, the bond market experienced positive returns during the third quarter of 2025, and mortgage rates declined as the Federal Reserve delivered the September rate cut and signaled the potential for additional easing. By quarter-end, the yield spread between 2-year and 10-year U.S. Treasuries widened to 54 basis points, marking a slight steepening from the previous quarter. On October 1, 2025, the U.S. government shut down after Congress failed to pass a funding bill, resulting in delays to critical government data releases and increasing uncertainty for future monetary policy decisions and the broader economic outlook.
Current report
(1)Effective August 1, 2025, our allocation of AG Arc’s earnings is 66.0%. For all prior periods, our allocation of AG Arc’s earnings was 44.6%.
Current report
The below table breaks out the components in the "Equity in earnings/(loss) from affiliates" line item on our consolidated statements of operations (in thousands).
Current report
(1)Represents items included in Earnings Available for Distribution. Refer to the “Earnings Available for Distribution” section below for further detail.
Current report
(2)Primarily represents earnings from our investment in MATT Non-QM Securities.
Current report
(3)Net operating income/(loss) from AG Arc represents income/(loss) related to Arc Home's lending and servicing operations, net of operating expenses and related current tax expense or benefit. Other income/(loss) from AG Arc represents realized and unrealized changes in the fair value of Arc Home's mortgage servicing rights, transaction related expenses, and other asset impairments, net of related tax expense or benefit.
Current report
Income tax expense
Current report
Income tax expense for the three months ended September 30, 2025 resulted from an increase in taxable income within our taxable REIT subsidiary primarily related to gains on residential mortgage loan securitization activity. During the three months ended September 30, 2024, income tax expense represented minimum state and local tax filing fees.
Current report
Nine Months Ended September 30, 2025 compared to the Nine Months Ended September 30, 2024
Current report
(1)For the nine months ended September 30, 2024, the Manager agreed to waive its right to receive expense reimbursements of $0.9 million pursuant to the MITT Management Agreement Amendment executed in connection with the WMC acquisition.
Current report
(1)Effective August 1, 2025, our allocation of AG Arc’s earnings is 66.0%. For all prior periods, our allocation of AG Arc’s earnings was 44.6%.
Current report
The below table breaks out the components in the "Equity in earnings/(loss) from affiliates" line item on our consolidated statements of operations (in thousands).
Current report
(1)Represents items included in Earnings Available for Distribution. Refer to the “Earnings Available for Distribution” section below for further detail.
Current report
(2)Primarily represents earnings from our investment in MATT Non-QM Securities.
Current report
(3)Net operating income/(loss) from AG Arc represents income/(loss) related to Arc Home's lending and servicing operations, net of operating expenses and related current tax expense or benefit. Other income/(loss) from AG Arc represents realized and unrealized changes in the fair value of Arc Home's mortgage servicing rights, transaction related expenses, and other asset impairments, net of related tax expense or benefit.
Current report
Income tax expense
Current report
Income tax expense for the nine months ended September 30, 2025 resulted from an increase in taxable income within our taxable REIT subsidiary primarily related to gains on residential mortgage loan securitization activity. During the nine months ended September 30, 2024, tax expense represented minimum state and local tax filing fees.
Current report
(1)The following table presents additional detail related to transaction related expenses and deal related performance fees excluded from EAD (in thousands). The interest expense line item relates to the amortization of deferred financing costs and the income tax expense line item relates to taxes incurred on items excluded from EAD, as defined above.
Current report
(2)The following table presents additional detail related to EAD from equity method investments (in thousands). Refer to the “Equity in earnings/(loss) from affiliates” section within the “Results of Operations” above for additional detail.
Current report
(g)The Legacy WMC Commercial Loans are on non-accrual status or cost-recovery status.
Current report
Securitized Non-Agency Loans and Home Equity Loans
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(1) Securitized debt, at fair value is non-recourse to the Company.
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(2) Financing arrangements and senior unsecured notes are recourse to the Company.
Current report
Acquisition of additional interest in AG Arc
Current report
On August 1, 2025, in connection with the acquisition of an additional 21.4% interest in AG Arc, we issued 2,027,676 restricted shares of common stock (the “Holder Shares”) to certain funds managed by TPG Angelo Gordon (the “Holders”) as consideration. Refer to Note 10 of the "Notes to Consolidated Financial Statements (unaudited)" for additional information. Pursuant to the registration rights agreement we entered into with the Holders, in August 2025, we filed a resale shelf registration statement on Form S-3 registering the resale of all the Holder Shares (the “Resale Shelf”), which was declared effective by the Securities and Exchange Commission in August 2025.
Current report
As of September 30, 2025, we have 12,981 restricted stock units and 2,460 associated dividend equivalent units outstanding, all of which are fully vested and held by one of our independent directors. These units will be settled on a one-for-one basis in shares of our common stock upon the director's separation from service with us.
Removed paragraphs (31)
Previous report
Second Quarter 2025 Executive Summary
Previous report
•$10.39 Book Value per share;
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◦Increased our quarterly dividend from $0.20 per common share in the first quarter 2025, which represented a 5.0% increase.
Previous report
•Executed a rated securitization of Agency-Eligible Loans with a total unpaid principal balance of $331.4 million.
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•Subsequent to quarter end:
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•On July 29, 2025, we co-sponsored a rated Non-Agency securitization, in which Home Equity Loans with a total unpaid principal balance of $647.0 million were securitized.
Previous report
In the second quarter of 2025, financial markets generally delivered positive performance with equities rising modestly and bond prices increasing, particularly at the short end of the curve, though uncertainty around inflation, fiscal, and monetary policy persisted. The 2-year U.S. Treasury yield declined by 17 basis points to 3.72% and although the 10-year U.S. Treasury fluctuated, it ended the quarter relatively flat at 4.23%. Overall, the yield spread between the 2-year and 10-year U.S. Treasuries ended the quarter 51 basis points positive, steepening 19 basis points from the previous quarter end. Markets experienced a notable bout of volatility in April as tariff announcements by the U.S. presidential administration caused sharp declines in risk assets. The policy shift sparked a temporary risk-off environment, driving credit spreads wider and mark-to-market losses across corporate and structured credit portfolios. Although credit spreads tightened and asset prices partially recovered throughout the remainder of the quarter, geopolitical and trade policy risks continued to weigh on sentiment and forward visibility.
Previous report
Throughout the second quarter of 2025, Federal Reserve Chair Jerome Powell emphasized a patient, data-dependent approach to monetary policy as inflation continued to moderate and labor market conditions gradually softened. The Federal Reserve acknowledged meaningful progress on inflation, with headline Consumer Price Index (“CPI”) declining to 2.7% and core CPI holding near 2.9% by June, however, components of inflation remained somewhat sticky, warranting caution. At the same time, the Federal Reserve observed certain signs of labor market cooling, with the unemployment rate at 4.2% and continuing weekly jobless claims remaining elevated. While the Federal Open Market Committee held the federal funds rate steady at 4.25% to
Previous report
4.50% at its July 2025 meeting, they indicated openness to rate cuts later in the year, assuming continued disinflation and no major re-acceleration in growth, with the June Summary of Economic Projections indicating a median expectation for two rate cuts totaling 50 basis points in 2025.
Previous report
(2)Estimated excise tax benefit of $(46) thousand was recognized during the three months ended June 30, 2025 which included $0.1 million related to an excise tax refund. We did not recognize any excise tax during the three months ended June 30, 2024.
Previous report
(1)For the three months ended June 30, 2025, the earnings/(loss) generated from our investment in MATT Non-QM Securities consisted of interest income of $0.7 million, net unrealized losses of $(0.3) million, and expenses of $(0.1) million. For the three months ended June 30, 2024, the earnings/(loss) generated from our investment in MATT Non-QM Securities consisted of interest income of $0.8 million and net unrealized losses of $(1.6) million.
Previous report
(2)Refer to the table below for additional detail on the earnings/(loss) generated from our investment in AG Arc.
Previous report
The below table further disaggregates our "Equity in earnings/(loss) from affiliates" line item on our consolidated statements of operations (in thousands).
Previous report
(1)The earnings/(loss) at AG Arc during the three months ended June 30, 2025 were primarily the result of changes in the fair value of the MSR portfolio held by Arc Home. The earnings/(loss) at AG Arc during the three months ended June 30, 2024 were primarily the result of $0.6 million related to changes in the fair value of the MSR portfolio held by Arc Home, offset by $(0.3) million of losses related to Arc Home's lending and servicing operations.
Previous report
Six Months Ended June 30, 2025 compared to the Six Months Ended June 30, 2024
Previous report
(1)For the six months ended June 30, 2024, the Manager agreed to waive its right to receive expense reimbursements of $0.6 million pursuant to the MITT Management Agreement Amendment executed in connection with the WMC acquisition.
Previous report
(1)For the six months ended June 30, 2025, the earnings/(loss) generated from our investment in MATT Non-QM Securities consisted of interest income of $1.3 million, net unrealized losses of $(1.0) million, and other expenses of $(0.1) million. For the six months ended June 30, 2024, the earnings/(loss) generated from our investment in MATT Non-QM Securities consisted of interest income of $1.6 million, net unrealized losses of $(0.1) million, and other expenses of $(0.1) million.
Previous report
(2)Refer to the table below for additional detail on the earnings/(loss) generated from our investment in AG Arc.
Previous report
The below table further disaggregates our "Equity in earnings/(loss) from affiliates" line item on our consolidated statements of operations (in thousands).
Previous report
(1)The earnings/(loss) at AG Arc during the six months ended June 30, 2025 were primarily the result of $0.2 million of income related to Arc Home's lending and servicing operations, offset by $(0.2) million related to changes in the fair value of the MSR portfolio held by Arc Home. The earnings/(loss) at AG Arc during the six months ended June 30, 2024 were primarily the result of $0.7 million related to changes in the fair value of the MSR portfolio held by Arc Home, offset by $(0.5) million of losses related to Arc Home's lending and servicing operations.
Previous report
(1)For the three months ended June 30, 2025 and 2024, total transaction related expenses and deal related performance fees included $3.0 million and $0.5 million, respectively, recorded within the "Transaction related expenses" line item and $61 thousand and $22 thousand, respectively, recorded within the "Interest expense" line item, which relates to the amortization of deferred financing costs. For the six months ended June 30, 2025 and 2024, total transaction related expenses and deal related performance fees included $4.1 million and $1.5 million, respectively, recorded within the "Transaction related expenses" line item and $0.1 million and $46 thousand, respectively, recorded within the "Interest expense" line item, which relates to the amortization of deferred financing costs.
Previous report
(2)For the three months ended June 30, 2025 and 2024, $0.1 million or $0.00 per share and $0.7 million or $0.02 per share, respectively; and for the six months ended June 30, 2025 and 2024, $44 thousand or $0.00 per share and $1.6 million or $0.05 per share, respectively, of realized and unrealized changes in the fair value of Arc Home's mortgage servicing rights, transaction related expenses, and other asset impairments were excluded from EAD, net of deferred tax expense or benefit.
Previous report
(3)For the three months ended June 30, 2025, there were no unrealized changes in the fair value of our investment in Arc Home to exclude from EAD. For the three months ended June 30, 2024, $1.7 million or $0.06 per share; and for the six months ended June 30, 2025 and 2024, $1.4 million or $0.05 per share and $1.7 million or $0.06 per share, respectively, of unrealized changes in the fair value of our investment in Arc Home were excluded from EAD.
Previous report
(4)EAD recognized by AG Arc does not include our portion of gains recorded by Arc Home in connection with the sale of residential mortgage loans to us. For the three months ended June 30, 2025, there were no intra-entity profits in connection with the sale of residential mortgage loans to us recognized by Arc Home. For the three months ended June 30, 2024, we eliminated $0.4 million or $0.01 per share of intra-entity profits recognized by Arc Home, and also decreased the cost basis of the underlying loans we purchased by the same amount. For the six months ended June 30, 2025 and 2024, we eliminated $0.1 million or $0.00 per share and $0.6 million or $0.02 per share, respectively, of intra-entity profits recognized by Arc Home, and also decreased the cost basis of the underlying loans we purchased by the same amount. Refer to Note 10 to the "Notes to Consolidated Financial Statements (unaudited)" for more information on this accounting policy.
Previous report
(g)There are Legacy WMC Commercial Loans with an unpaid principal balance of $45.0 million and a fair value of $42.8 million which are on non-accrual status.
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Securitized Non-Agency Loans
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Recourse and non-recourse financing
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The below table provides detail on the breakout between recourse and non-recourse financing as of June 30, 2025 (in thousands).
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(1) Non-recourse financing arrangements include securitized debt, at fair value and $43.4 million of other non-recourse financing arrangements.
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Effective April 15, 2020 upon the approval of our stockholders at our 2020 annual meeting of stockholders, our 2020 Equity Incentive Plan (the "2020 Equity Incentive Plan") provided for a maximum of 666,666 shares of common stock to be issued.
Previous report
On December 6, 2023, in connection with the WMC acquisition, we granted an aggregate 25,962 restricted stock units to two independent directors added to our Board of Directors who previously served on WMC's board of directors, all of which have vested. Through May 5, 2025, the two independent directors have also been granted an aggregate of 4,098 dividend equivalent units, all of which have vested. These restricted stock units and associated dividend equivalent units will be settled in shares of our common stock upon each independent director's separation from service with us. On May 5, 2025, 15,030 restricted stock units and dividend equivalent units previously issued under the 2020 Equity Incentive Plan were settled for shares of our common stock, on a one-for-one basis, in connection with an independent director no longer serving on our Board of Directors as of May 5, 2025.
Reworded paragraphs (75)
Previous wording
•changes in trade policies and tariffs, together with any future downturns in the global economy or market disruptions resulting therefrom;
Current wording
•changes in trade policies and tariffs, and the impact of a prolonged U.S. federal government shutdown, together with any future downturns in the global economy or market disruptions resulting therefrom;
Previous wording
•$(0.05) of Net Income/(Loss) Available to Common Stockholders per diluted common share and $0.18 of Earnings Available for Distribution ("EAD") per diluted common share;
Current wording
•$0.47 of Net Income/(Loss) Available to Common Stockholders per diluted common share and $0.23 of Earnings Available for Distribution ("EAD") per diluted common share;
Previous wording
•12.8x GAAP Leverage Ratio and 1.3x Economic Leverage Ratio; and
Current wording
•14.9x GAAP Leverage Ratio and 1.7x Economic Leverage Ratio; and
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•$0.21 dividend per common share declared in the second quarter 2025;
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•$0.21 dividend per common share declared in the third quarter 2025.
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•The table below summarizes the fair value of purchases and proceeds from sales of investments during the quarter ended June 30, 2025 (in thousands).
Current wording
•The table below summarizes the fair value of purchases of investments during the quarter ended September 30, 2025 (in thousands).
Previous wording
•On August 1, 2025, purchased an additional 21.4% interest in AG Arc LLC (“AG Arc”) from certain private funds managed by TPG Angelo Gordon. In connection with the acquisition, we issued 2,027,676 restricted shares of our common stock as consideration. Upon closing of the transaction on August 1, 2025 and giving effect to our acquisition of the additional 21.4% interest, we have an approximate 66.0% interest in AG Arc. Refer to “Item 5. Other Information” for additional information related to the transaction.
Current wording
•On August 1, 2025, purchased an additional 21.4% interest in AG Arc LLC (“AG Arc”) from certain private funds managed by TPG Angelo Gordon. In connection with the acquisition, we issued 2,027,676 restricted shares of our common stock as consideration. Upon closing of the transaction on August 1, 2025, and giving effect to our acquisition of the additional 21.4% interest, we have an approximate 66.0% interest in AG Arc. Refer to Note 10 to the "Notes to Consolidated Financial Statements (unaudited)" for additional information related to the transaction.
Previous wording
•On July 10, 2025, we co-sponsored a rated Non-Agency securitization, in which Home Equity Loans with a total unpaid principal balance of $301.3 million were securitized, converting recourse financing with mark-to-market margin calls to non-recourse financing without mark-to-market margin calls.
Current wording
(1) Converted recourse financing with mark-to-market margin calls to non-recourse financing without mark-to-market margin calls.
Previous wording
•On July 18, 2025, we paid off certain fixed-rate long-term financing arrangements which had an outstanding unpaid principal balance and accrued interest payable of $43.8 million. The financing was collateralized by certain of our retained interests in securitizations acquired from WMC. We pledged these assets under a recourse financing arrangement with mark-to-market margin calls with a balance of $82.9 million, providing us with net proceeds of $39.1 million.
Current wording
•Paid off certain Legacy WMC fixed-rate long-term financing arrangements, which had an outstanding balance, including unpaid principal balance and accrued interest payable, of $43.8 million. The financing was collateralized by certain retained interests in securitizations acquired from WMC.
Previous wording
We focus our investment activities primarily on acquiring and securitizing newly-originated residential mortgage loans within the non-agency segment of the housing market. We obtain our assets through Arc Home, LLC ("Arc Home"), our residential mortgage loan originator in which we owned an approximate 44.6% interest as of June 30, 2025, and through other third-party origination partners. We finance our acquired loans through various financing lines on a short-term basis and utilize TPG Angelo Gordon's proprietary securitization platform to secure long-term, non-recourse, non-mark-to-market financing as market conditions permit. Through our ownership in Arc Home, we also have exposure to mortgage banking activities. Arc Home is a multi-channel licensed mortgage originator and servicer primarily engaged in the business of originating and selling residential mortgage loans while retaining the mortgage servicing rights associated with certain loans that it originates.
Current wording
We focus our investment activities primarily on acquiring and securitizing newly-originated residential mortgage loans within the non-agency segment of the housing market. We obtain our assets through Arc Home, LLC ("Arc Home"), our residential mortgage loan originator in which we owned an approximate 66.0% interest as of September 30, 2025, and through other third-party origination partners. We finance our acquired loans through various financing lines on a short-term basis and utilize TPG Angelo Gordon's proprietary securitization platform to secure long-term, non-recourse, non-mark-to-market financing as market conditions permit. Through our ownership in Arc Home, we also have exposure to mortgage banking activities. Arc Home is a multi-channel licensed mortgage originator and servicer primarily engaged in the business of originating and selling residential mortgage loans while retaining the mortgage servicing rights associated with certain loans that it originates.
Previous wording
Changes in RMBS spreads were mixed for the second quarter of 2025 depending on product and priority within the capital structure. Non-QM spreads were slightly wider for senior and mezzanine tranches while subordinate Non-QM tranches were wider by 35 basis points. Senior prime jumbo spreads were wider by 5 basis points. However, investment grade were more varied among the subordinate tranches as A and AA tranches were slightly tighter, BBB prime jumbo credit spreads widened moderately, and lower in the capital structure, non-rated tranches were roughly 35 basis points wider. Trends in credit spreads on credit risk transfer ("CRT") assets can serve as a proxy for market participants evaluating credit-related assets given the observability of transactions. CRT tranches were up to 20 basis points tighter with most of that coming higher in the capital structure. The CRT sector has benefited from some scarcity value as the GSEs have opted to retain more of the capital structure for their newly issued transactions. Compared to year-ago levels, residential credit spreads are mixed overall with CRT and senior prime jumbo up to 30 to 50 basis points tighter, Non-QM up to 20 basis points wider and below-investment grade prime jumbo up to 50 to 100 basis points wider. Some credit curves were steeper during the quarter, but overall residential credit curves remained relatively flat as broad demand for residential credit continues to be robust.
Current wording
In the third quarter of 2025, RMBS spreads generally tightened. Non-QM spreads tightened throughout the capital structure, with senior tranches by 20 to 25 basis points, mezzanine tranches by up to 15 basis points, and subordinate tranches by approximately 50 basis points. Senior prime jumbo spreads were slightly tighter while the subordinate stack was more mixed, with investment grade tranches little changed and non-investment grade tranches tightening approximately 30 basis points. Closed-end second lien spreads tightened by up to 25 basis points during the quarter led by higher tranches within the structure. Trends in credit spreads on credit risk transfer ("CRT") assets can serve as a proxy for market participants evaluating credit-related assets given the observability of transactions. Lower rated CRT tranches were up to 10 basis points tighter as the CRT sector has benefitted from scarcity value as the GSEs have opted to retain more of the capital structure for their newly issued transactions amid favorable underlying collateral fundamentals. Non-QM credit curves flattened during the quarter as the difference in yields for Non-QM BB and AAA tranches was only 165 basis points at the end of September 2025, amid robust demand for residential credit.
Previous wording
Primary RMBS market activity edged higher during the second quarter of 2025 to $35 billion, a rise of 6% compared to year-ago levels but roughly 11% lower than the first quarter of 2025. Compared to year-ago levels, primary activity for Non-QM rose 57% to almost $16 billion but was offset by declines across most of the remaining residential market. Prime jumbo was relatively steady year-over-year at approximately $6 billion and the Second Lien and Home Equity Lines of Credit sector was marginally lower year-over-year at $2.8 billion. Primary agency-eligible investor RMBS was approximately $1.7 billion and CRT totaled $1.8 billion in the second quarter of 2025. On a year-to-date basis, primary RMBS activity totaled approximately $75 billion or 19% higher than year-ago levels. Almost 40% of this activity was in Non-QM, followed by prime jumbo at 18% and home equity at 11%. The home equity space has received a large amount of industry focus for its growth potential with estimates of $17 trillion tappable home equity, including $2 trillion belonging to conventional mortgage borrowers.
Current wording
Primary RMBS market activity increased sharply during the third quarter of 2025, rising to $47 billion, an increase of 33% compared to the second quarter of 2025 and 23% against year-ago levels. Non-QM drove the annual change, increasing approximately $9 billion, or 81%, to almost $21 billion, followed by gains in Home Equity which increased over $5 billion, or 156%. Prime Jumbo decreased by almost $2 billion to $6.5 billion, and the remainder of the cohorts within the residential market experienced relatively minor changes. On a year-to-date basis, primary RMBS activity totaled approximately $122 billion, or 23% more than year-ago levels driven by activity in Non-QM, Prime Jumbo, and Home Equity loans. As we have noted previously, the home equity sector has received significant industry focus for its growth potential with estimates of $17 trillion tappable home equity, including $2 trillion belonging to conventional mortgage borrowers.
Previous wording
The S&P CoreLogic Case-Shiller U.S. National Home Price Index was 2.3% higher year-over-year in May 2025, the latest data available, establishing a new peak nationally amid decelerating growth overall. Regional price variations continued to exist, and on an annual basis, regions in the Northeast and Midwest continued to lead gains while regions in Florida, Texas and the Mountain West have been weaker. New York City area home prices grew over 7% from May 2024 to May 2025, with Chicago, Cleveland and Detroit following in the high-4% to 6% area. However, regions in California were weaker, with Los Angeles rising by 1.1% and San Francisco lower by 0.6% year-over-year. Denver was unchanged, Dallas declined 0.6%, and Tampa fell by 2.4% compared to May 2024 levels. Overall, home price growth and available for-sale inventory have had a relatively strong inverse relationship as regions with inventory growth since 2019 have had weak performance, and vice versa.
Current wording
The S&P CoreLogic Case-Shiller U.S. National Home Price Index was 1.7% higher year-over-year in July 2025, the latest data available, near the peak established in June 2025. Regional price variations continued to exist, and on an annual basis, metropolitan areas in the Northeast and Midwest continued to lead gains while regions in Florida, Texas and the Mountain West have been weaker. New York City area home prices led annual gains, rising 6.4% from July 2024 to July 2025, with Chicago following nearby at 6.2%. Cleveland, Detroit and Boston rose 4 to 4.5% as well. Meanwhile, regions in California were mixed with Los Angeles roughly flat and other areas up to 2% lower. Additionally, Denver fell by 0.6% and Dallas by 1.2%. In Florida, Miami and Tampa were 1.3% and 2.8% lower, respectively, against July 2024 readings. Overall, home price growth and available for-sale inventory have had a relatively strong inverse relationship as regions with inventory growth since 2019 have had weaker home price gains, and vice versa.
Previous wording
During the second quarter of 2025, prevailing mortgage rates were steady in the high-6% area ending the quarter at 6.77%, according to the Freddie Mac Primary Mortgage Market Survey. Amid market volatility following the April 2nd “Liberation Day” tariff announcements, mortgage rate locks fell to as low as 6.5% before quickly resetting near 7% through most of the remainder of the quarter, based on third party data. After a slow climb throughout 2023 and 2024, the effective mortgage rate outstanding held steady at 4.05% as of the first quarter of 2025, the latest data available. This rate, which measures the rate on outstanding mortgage debt, is 74 basis points higher than the low established at the end of the first quarter of 2022 but remains well below prevailing rates, underscoring the stickiness of the “lock-in effect” or disincentive for existing homeowners to sell their homes because their current mortgage rate is well below current market rates.
Current wording
During the third quarter of 2025, prevailing mortgage rates fell over 30 basis points to end the quarter at approximately 6.3%, according to the Freddie Mac Primary Mortgage Market Survey. Prevailing mortgage rates were last at this level in the fourth quarter of 2024 after touching the low 6% range in September 2024. After a slow climb throughout 2023 and 2024, the effective mortgage rate outstanding has just inched higher to 4.11% as of the second quarter of 2025, the latest data available, up from only 4.03% to end 2024. This rate, which measures the rate on outstanding mortgage debt, is 80 basis points higher than the low established at the end of the first quarter of 2022 but remains well below prevailing rates, underscoring the stickiness of the “lock-in effect” or disincentive for existing homeowners to sell their homes because their current mortgage rate is well below current market rates.
Previous wording
Total existing home inventory continues to grow, reaching 1.54 million units in May 2025, the latest data available. This is the largest level of inventory since June 2020 but only just approaches the typical inventory levels of 1.5 to 2 million units from 2016 through 2019 and well below the range of 1.7 to 2.5 million units from 2000 through 2004. When evaluating new listings, which are a timelier barometer of activity, year-to-date inventory is just 3% higher year-over-year and is 16% below average year-to-date listings through May from 2015 through 2022. This reduced level of activity follows an annual shortage of over 1 million new listings in each of 2023 and 2024 compared to annual activity in 2015 through 2019 as well as pandemic-affected 2020 through 2022, underscoring the limited supply theme.
Current wording
Total existing home inventory steadied during the third quarter of 2025, sitting at 1.53 million units in August 2025, the latest data available, little changed since May 2025. This is the highest level of inventory since June 2020 but hardly breaches the typical inventory levels of 1.5 to 2 million units from 2016 to 2019 and well below the range of 1.7 to 2.5 million units from 2000 to 2004, periods with a smaller count of U.S. households. When evaluating new listings, which are a timelier barometer of activity, year-to-date inventory is 1% lower year-over-year and is 22% below average year-to-date listings through August 2025 from 2015 through 2022. This reduced level of activity follows an annual shortage of over 1 million new listings in each of 2023 and 2024 compared to annual activity in 2015 through 2019 as well as pandemic-affected 2020 through 2022, underscoring the limited supply theme.
Previous wording
◦"Non-Agency RMBS" refer to the retained tranches from unconsolidated securitizations of Non-Agency Loans and Re/Non-Performing Loans issued under the GCAT shelf, as well as Non-Agency RMBS issued by third-parties.
Current wording
◦"Non-Agency RMBS" refer to the retained tranches from unconsolidated securitizations of Non-QM Loans, Agency-Eligible Loans, Home Equity Loans, Prime Jumbo Loans, and Re/Non-Performing Loans issued either under the Gold Creek Asset Trust ("GCAT") shelf or from third-parties.
Previous wording
Interest income increased from the three months ended June 30, 2024 to the three months ended June 30, 2025 primarily as a result of purchases of residential mortgage loans and non-agency RMBS during the period and an increase in the weighted average yield of our investment portfolio. The following table presents a summary of the weighted average amortized cost of and the weighted average yield on our GAAP investment portfolio ($ in millions).
Current wording
Interest income increased from the three months ended September 30, 2024 to the three months ended September 30, 2025 primarily due to a higher weighted average amortized cost of our GAAP investment portfolio as a result of purchases of residential mortgage loans and Non-Agency RMBS and an increase in the weighted average yield of our investment portfolio. The following table presents a summary of the weighted average amortized cost of and the weighted average yield on our GAAP investment portfolio ($ in millions).
Previous wording
Interest expense increased from the six months ended June 30, 2024 to the six months ended June 30, 2025 due to an increase in the GAAP financing balance outstanding resulting from the issuance of securitized debt and Senior Unsecured Notes during the period, offset by the repayment of the Legacy WMC Convertible Notes upon maturity in September 2024. Additionally, there was an increase in the weighted average financing rate. The following table presents a summary of the weighted average financing balance and the weighted average financing rate on our GAAP investment portfolio ($ in millions).
Current wording
Interest expense increased from the three months ended September 30, 2024 to the three months ended September 30, 2025 due to a higher weighted average GAAP financing balance outstanding resulting from the issuance of securitized debt during the period, offset by the repayment of the Legacy WMC Convertible Notes upon maturity in September 2024. Additionally, there was an increase in the weighted average financing rate. The following table presents a summary of the weighted average financing balance and the weighted average financing rate on our GAAP investment portfolio ($ in millions).
Previous wording
We recorded income on the net interest component of interest rate swaps during the three months ended June 30, 2025 and 2024 as a result of our swap portfolio being in a net receive position during the periods. The decrease in income from the three months ended June 30, 2024 to the three months ended June 30, 2025 was the result of a decrease in the notional balance outstanding during the period and a decrease in the weighted average receive rate. The following table presents a summary of our interest rate swap portfolio as of June 30, 2025 and 2024 ($ in millions).
Current wording
We recorded income on the net interest component of interest rate swaps during the three months ended September 30, 2025 and 2024 as a result of our swap portfolio being in a net receive position during the periods. The decrease in income from the three months ended September 30, 2024 to the three months ended September 30, 2025 was the result of a decrease in the weighted average receive rate and weighted average notional balance. The following table presents a summary of our interest rate swap portfolio as of September 30, 2025 and 2024 ($ in millions).
Previous wording
The following table presents a summary of Net realized gain/(loss) for the three months ended June 30, 2025 and 2024 (in thousands). During the three months ended June 30, 2025, net realized losses primarily related to unwinding certain pay-fix, receive-float interest rate swap agreements which were held at unrealized losses.
Current wording
The following table presents a summary of Net realized gain/(loss) for the three months ended September 30, 2025 and 2024 (in thousands). During the three months ended September 30, 2025, net realized losses primarily related to short TBAs and unwinding certain pay-fix, receive-float interest rate swap agreements, which were held at unrealized losses.
Previous wording
The following table presents a summary of Net unrealized gain/(loss) for the three months ended June 30, 2025 and 2024 (in thousands). During the three months ended June 30, 2025, we recognized unrealized gains on our securitized debt, CMBS, and loan purchase commitments which were offset by unrealized losses on residential mortgage loans, commercial loans, and interest rate swaps.
Current wording
The following table presents a summary of Net unrealized gain/(loss) for the three months ended September 30, 2025 and 2024 (in thousands). During the three months ended September 30, 2025, we recognized unrealized gains on residential mortgage loans and Non-Agency RMBS, offset by unrealized losses on securitized debt, CMBS, commercial loans, short TBAs, interest rate swaps, and loan purchase commitments.
Previous wording
Investment related expenses are primarily comprised of servicing fees, asset management fees, trustee fees, and certain investment related expenses reimbursable to the Manager or its affiliates. We are required to reimburse our Manager or its affiliates for operating expenses incurred by our Manager or its affiliates on our behalf associated with our investment portfolio. The following table presents a summary of our investment related expenses (in thousands).
Current wording
Investment related expenses are primarily comprised of servicing fees, asset management fees, trustee fees, and certain investment related expenses reimbursable to the Manager or its affiliates. We are required to reimburse our Manager or its affiliates for operating expenses incurred by our Manager or its affiliates on our behalf associated with our investment portfolio. These expenses increased from the three months ended September 30, 2024 to the three months ended September 30, 2025 primarily due to an increase in our GAAP residential mortgage loan portfolio. The following table presents a summary of our investment related expenses (in thousands).
Previous wording
Transaction related expenses primarily include expenses associated with purchasing and securitizing residential mortgage loans. Transaction related expenses increased from the three months ended June 30, 2024 to the three months ended June 30, 2025 primarily due to increased expenses associated with securitizations.
Current wording
Transaction related expenses primarily include expenses associated with purchasing and securitizing residential mortgage loans. During the three months ended September 30, 2025, the expenses primarily consisted of $0.8 million related to refinancing our fixed-rate long-term financing arrangements and $0.9 million related to our acquisition of an additional 21.4% interest in AG Arc. During the three months ended September 30, 2024, transaction related expenses were related to one rated securitization.
Previous wording
(2)As of June 30, 2025, the fair value of our investment in Arc Home was calculated using a valuation multiple of 1.00x of book value, which increased from 0.95x of book value as of December 31, 2024. As of June 30, 2024, the fair value of our investment in Arc Home was calculated using a valuation multiple of 0.94x of book value, which increased from 0.89x of book value as of December 31, 2023.
Current wording
(4)As of September 30, 2025, the fair value of our investment in Arc Home was calculated using a valuation multiple of 1.025x of book value, which increased from 1.00x of book value as of June 30, 2025. As of September 30, 2024, the fair value of our investment in Arc Home was calculated using a valuation multiple of 0.95x of book value which increased from 0.94x of book value as of June 30, 2024.
Previous wording
(3)The earnings recognized by AG Arc do not include our portion of gains recorded by Arc Home in connection with the sale of residential mortgage loans to us. Refer to Note 10 to the "Notes to Consolidated Financial Statements (unaudited)" for more information on this accounting policy.
Current wording
(5)The earnings recognized by AG Arc do not include our portion of gains recorded by Arc Home in connection with the sale of residential mortgage loans to us. Refer to Note 10 to the "Notes to Consolidated Financial Statements (unaudited)" for more information on this accounting policy.
Previous wording
The table below presents certain information from our consolidated statements of operations for the six months ended June 30, 2025 and 2024 (in thousands).
Current wording
The table below presents certain information from our consolidated statements of operations for the nine months ended September 30, 2025 and 2024 (in thousands).
Previous wording
Interest income increased from the six months ended June 30, 2024 to the six months ended June 30, 2025 primarily as a result of purchases of residential mortgage loans and non-agency RMBS during the period and an increase in the weighted average yield of our investment portfolio. The following table presents a summary of the weighted average amortized cost of and the weighted average yield on our GAAP investment portfolio ($ in millions).
Current wording
Interest income increased from the nine months ended September 30, 2024 to the nine months ended September 30, 2025 primarily due to a higher weighted average amortized cost of our GAAP investment portfolio as a result of purchases of residential mortgage loans and Non-Agency RMBS and an increase in the weighted average yield of our investment portfolio. The following table presents a summary of the weighted average amortized cost of and the weighted average yield on our GAAP investment portfolio ($ in millions).
Previous wording
Interest expense increased from the three months ended June 30, 2024 to the three months ended June 30, 2025 due to an increase in the GAAP financing balance outstanding resulting from the issuance of securitized debt and Senior Unsecured Notes during the period, offset by the repayment of the Legacy WMC Convertible Notes upon maturity in September 2024. Additionally, there was an increase in the weighted average financing rate. The following table presents a summary of the weighted average financing balance and the weighted average financing rate on our GAAP investment portfolio ($ in millions).
Current wording
Interest expense increased from the nine months ended September 30, 2024 to the nine months ended September 30, 2025 due to a higher weighted average GAAP financing balance outstanding resulting from the issuance of securitized debt and Senior Unsecured Notes during the period, offset by the repayment of the Legacy WMC Convertible Notes upon maturity in September 2024. Additionally, there was an increase in the weighted average financing rate. The following table presents a summary of the weighted average financing balance and the weighted average financing rate on our GAAP investment portfolio ($ in millions).
Previous wording
We recorded income on the net interest component of interest rate swaps during the six months ended June 30, 2025 and 2024 as a result of our swap portfolio being in a net receive position. The decrease in income from the six months ended June 30, 2024 to the six months ended June 30, 2025 was the result of a decrease in the notional balance outstanding during the period and a decrease in the weighted average receive rate. The following table presents a summary of our interest rate swap portfolio as of June 30, 2025 and 2024 ($ in millions).
Current wording
We recorded income on the net interest component of interest rate swaps during the nine months ended September 30, 2025 and 2024 as a result of our swap portfolio being in a net receive position. The decrease in income from the nine months ended September 30, 2024 to the nine months ended September 30, 2025 was the result of a decrease in the weighted average receive rate and weighted average notional balance. The following table presents a summary of our interest rate swap portfolio as of September 30, 2025 and 2024 ($ in millions).
Previous wording
The following table presents a summary of Net realized gain/(loss) for the six months ended June 30, 2025 and 2024 (in thousands). The net realized loss during the six months ended June 30, 2025 was primarily driven by losses from unwinding certain pay-fix, receive-float interest rate swap agreements which were held at unrealized losses and losses recognized on the sale of non-agency loans and re- and non-performing loans.
Current wording
The following table presents a summary of Net realized gain/(loss) for the nine months ended September 30, 2025 and 2024 (in thousands). The net realized loss during the nine months ended September 30, 2025 was primarily driven by losses from unwinding certain pay-fix, receive-float interest rate swap agreements and short TBAs, which were held at unrealized losses, and losses recognized on the sale of non-agency loans and re- and non-performing loans.
Previous wording
The following table presents a summary of Net unrealized gain/(loss) for the six months ended June 30, 2025 and 2024 (in thousands). During the six months ended June 30, 2025, we recognized unrealized gains on our residential mortgage loans, CMBS, and non-agency RMBS, which were offset by unrealized losses on securitized debt, interest rate swaps, and commercial loans.
Current wording
The following table presents a summary of Net unrealized gain/(loss) for the nine months ended September 30, 2025 and 2024 (in thousands). During the nine months ended September 30, 2025, we recognized unrealized gains on our residential mortgage loans, non-agency RMBS, and CMBS, which were offset by unrealized losses on securitized debt, interest rate swaps, and commercial loans.
Previous wording
During the six months ended June 30, 2024, the base management fee was reduced by $1.2 million in connection with the WMC acquisition.
Current wording
During the nine months ended September 30, 2024, the base management fee was reduced by $1.8 million in connection with the WMC acquisition.
Previous wording
(2)Estimated excise tax expense of $43 thousand was recognized during the six months ended June 30, 2025, which included $0.1 million related to an excise tax refund. We did not recognize any excise tax during the six months ended June 30, 2024.
Current wording
(2)During the nine months ended September 30, 2025, we recorded a reduction in excise tax expense of $0.1 million related to an excise tax refund.
Previous wording
Investment related expenses are primarily comprised of servicing fees, asset management fees, trustee fees, and certain investment related expenses reimbursable to the Manager or its affiliates. We are required to reimburse our Manager or its affiliates for operating expenses incurred by our Manager or its affiliates on our behalf associated with our investment portfolio. The following table presents a summary of our investment related expenses (in thousands).
Current wording
Investment related expenses are primarily comprised of servicing fees, asset management fees, trustee fees, and certain investment related expenses reimbursable to the Manager or its affiliates. We are required to reimburse our Manager or its affiliates for operating expenses incurred by our Manager or its affiliates on our behalf associated with our investment portfolio. These expenses increased from the nine months ended September 30, 2024 to the nine months ended September 30, 2025 primarily due to an increase in our GAAP residential mortgage loan portfolio. The following table presents a summary of our investment related expenses (in thousands).
Previous wording
Transaction related expenses increased from the six months ended June 30, 2024 to the six months ended June 30, 2025 primarily due to increased expenses associated with securitizations.
Current wording
Transaction related expenses increased from the nine months ended September 30, 2024 to the nine months ended September 30, 2025 primarily due to increased expenses associated with securitizations in 2025 compared with 2024, along with expenses of $0.8 million related to refinancing our fixed-rate long-term financing arrangements and $0.9 million related to our acquisition of an additional 21.4% interest in AG Arc.
Previous wording
(2)As of June 30, 2025, the fair value of our investment in Arc Home was calculated using a valuation multiple of 1.00x of book value, which was consistent with the valuation multiple as of March 31, 2025. As of June 30, 2024, the fair value of our investment in Arc Home was calculated using a valuation multiple of 0.94x of book value which increased from 0.89x of book value as of March 31, 2024.
Current wording
(4)As of September 30, 2025, the fair value of our investment in Arc Home was calculated using a valuation multiple of 1.025x of book value, which increased from 0.95x of book value as of December 31, 2024. As of September 30, 2024, the fair value of our investment in Arc Home was calculated using a valuation multiple of 0.95x of book value, which increased from 0.89x of book value as of December 31, 2023.
Previous wording
(3)The earnings recognized by AG Arc do not include our portion of gains recorded by Arc Home in connection with the sale of residential mortgage loans to us. Refer to Note 10 to the "Notes to Consolidated Financial Statements (unaudited)" for more information on this accounting policy.
Current wording
(5)The earnings recognized by AG Arc do not include our portion of gains recorded by Arc Home in connection with the sale of residential mortgage loans to us. Refer to Note 10 to the "Notes to Consolidated Financial Statements (unaudited)" for more information on this accounting policy.
Previous wording
We define EAD, a non-GAAP financial measure, as Net Income/(loss) available to common stockholders excluding (i) (a) unrealized gains/(losses) on loans, real estate securities, derivatives and other investments, inclusive of our investment in AG Arc, and (b) net realized gains/(losses) on the sale or termination of such instruments, (ii) any transaction related expenses incurred in connection with the acquisition, disposition, or securitization of our investments as well as transaction related expenses incurred in connection with the WMC acquisition, (iii) accrued deal-related performance fees payable to third party operators to the extent the primary component of the accrual relates to items that are excluded from EAD, such as unrealized and realized gains/(losses), (iv) realized and unrealized changes in the fair value of Arc Home's net mortgage servicing rights and the derivatives intended to offset changes in the fair value of those net mortgage servicing rights, (v) deferred taxes recognized at our taxable REIT subsidiaries, if any, (vi) any bargain purchase gains recognized, and (vii) certain other nonrecurring gains or losses. Items (i) through (vii) above include any amount related to those items held in affiliated entities. Transaction related expenses referenced in (ii) above are primarily comprised of costs incurred prior to or at the time of executing our securitizations and acquiring or disposing of residential mortgage loans. These costs are nonrecurring and may include underwriting fees, legal fees, diligence fees, and other similar transaction related expenses. Recurring expenses, such as servicing fees, custodial fees, trustee fees and other similar ongoing fees are not excluded from earnings available for distribution. Management considers the transaction related expenses to be similar to realized losses incurred at the acquisition, disposition, or securitization of an asset and does not view them as being part of its core operations. Management views the exclusion described in (iv) above to be consistent with how it calculates EAD on the remainder of its portfolio. Management excludes all deferred taxes because it believes deferred taxes are not representative of current operations. EAD includes the net interest income and other income earned on our investments on a yield adjusted basis, including TBA dollar roll income/(loss) or any other investment activity that may earn or pay net interest or its economic equivalent.
Current wording
We define EAD, a non-GAAP financial measure, as Net Income/(loss) available to common stockholders excluding (i) (a) unrealized gains/(losses) on loans, real estate securities, derivatives and other investments, inclusive of our investment in AG Arc, and (b) net realized gains/(losses) on the sale or termination of such instruments, (ii) any transaction related expenses incurred in connection with the acquisition, disposition, or securitization of our investments as well as transaction related expenses incurred in connection with the WMC acquisition, (iii) accrued deal-related performance fees payable to third party operators to the extent the primary component of the accrual relates to items that are excluded from EAD, such as unrealized and realized gains/(losses), (iv) realized and unrealized changes in the fair value of Arc Home's net mortgage servicing rights and the derivatives intended to offset changes in the fair value of those net mortgage servicing rights, (v) deferred taxes recognized at our taxable REIT subsidiaries, if any, (vi) any bargain purchase gains recognized, and (vii) certain other nonrecurring gains or losses. Items (i) through (vii) above include any amount related to those items held in affiliated entities. Transaction related expenses referenced in (ii) above are primarily comprised of costs incurred prior to or at the time of executing our securitizations and acquiring or disposing of residential mortgage loans. These costs are nonrecurring and may include underwriting fees, legal fees, diligence fees, and other similar transaction related expenses. Recurring expenses, such as servicing fees, custodial fees, trustee fees and other similar ongoing fees are not excluded from earnings available for distribution. Management considers the transaction related expenses to be similar to realized losses incurred at the acquisition, disposition, or securitization of an asset and does not view them as being part of its core operations. Management views the exclusion described in (iv) above to be consistent with how it calculates EAD on the remainder of its portfolio. Management excludes all deferred taxes because it believes deferred taxes are not representative of current operations. EAD includes the net interest income and other income earned on our investments on a yield adjusted basis, including the net interest component of interest rate swaps, TBA dollar roll income/(loss), or any other investment activity that may earn or pay net interest or its economic equivalent. Additionally, EAD includes the net operating income/(loss) from Arc Home.
Previous wording
A reconciliation of "Net Income/(loss) available to common stockholders" to EAD for three and six months ended June 30, 2025 and 2024 is set forth below (in thousands, except per share data).
Current wording
A reconciliation of "Net Income/(loss) available to common stockholders" to EAD for three and nine months ended September 30, 2025 and 2024 is set forth below (in thousands, except per share data).
Previous wording
(c)The cost of funds related to the financing on our investment portfolio inclusive of the benefit of 0.05% from our interest rate hedges was 5.29%. When including our Senior Unsecured Notes, the total cost of funds was 5.36%.
Current wording
(c)The cost of funds related to the financing on our investment portfolio inclusive of the benefit of 0.05% from our interest rate hedges was 5.37%. When including our Senior Unsecured Notes, the total cost of funds was 5.43%.
Previous wording
(h)There are Legacy WMC CMBS with an unpaid principal balance of $23.5 million and a fair value of $7.0 million which are on non-accrual or cost recovery status.
Current wording
(h)There are Legacy WMC CMBS with an unpaid principal balance of $23.5 million and a fair value of $7.1 million which are on non-accrual or cost recovery status.
Showing the first 40 of 75 pairs. Open the source sections for the rest.
Rearranged current paragraphs (1)
Current report — wording carried from elsewhere
◦Pledged these assets under a recourse financing arrangement with mark-to-market margin calls;