EFC — what changed in the latest 10-Q

Text added vs the prior filing · source: 10-Q · 2026-08-10

• We expect to continue to target specified pools that, taking into account their particular composition and based on our prepayment projections, should: (1) generate attractive yields relative to other Agency RMBS and U.S. Treasury securities, (2) have less prepayment sensitivity to government policy…

• Longbridge typically retains the MSRs associated with the proprietary reverse mortgage loans that it originates and has opportunistically acquired MSRs on reverse mortgage loans in the secondary market. We have securitized certain proprietary reverse mortgage loans originated by Longbridge and retai…

• We have made, and in the future may make additional, equity and/or debt investments in loan originators, loan servicers, and other mortgage-related operating companies. Our investments may either be controlling interests (as is the case with Longbridge), or non-controlling interests (as is the case …

• We also take long and short positions in various other mortgage-related derivative instruments, including mortgage-

• related credit default swaps. A credit default swap is a credit derivative contract in which one party (the protection buyer) pays an ongoing periodic premium (and often an upfront payment as well) to another party (the protection seller) in return for compensation for default (or similar credit eve…

Text removed vs the prior filing · source: 10-Q · 2026-05-11

• We have made, and in the future may make additional, equity and/or debt investments in loan originators, loan servicers, and other mortgage-related operating companies. Our investments may either be controlling interests (as is the case with Longbridge), or non-controlling interests (as is the case …

• We also take long and short positions in various other mortgage-related derivative instruments, including mortgage-related credit default swaps. A credit default swap is a credit derivative contract in which one party (the protection buyer) pays an ongoing periodic premium (and often an upfront paym…

• •After lowering its target range for the federal funds rate by 75 basis points to 3.50%–3.75% in the second half of 2025, the U.S. Federal Reserve (the "Federal Reserve") maintained that range at its January and March 2026 meetings. Across both meetings, the Federal Reserve noted that job gains had …

• •The first quarter began with the U.S. administration continuing trade negotiations with key partners. In February, the Supreme Court ruled that sweeping global tariffs could not be imposed under the International Emergency Economic Powers Act. The administration subsequently announced a temporary 1…

• •Interest rates were generally stable to slightly lower during the first two months of the year. However, interest rates increased significantly in March as escalating geopolitical tensions, particularly in the Middle East, contributed to a spike in oil prices, higher inflation expectations, and ren…

Text added vs the prior filing · source: 10-Q · 2026-08-10

• Severity risk is the risk of loss upon a borrower default on a mortgage loan or other secured or unsecured debt obligation. Severity risk includes the risk of loss of value of the property or other asset, if any, securing the mortgage loan or debt obligation, as well as the risk of loss associated w…

• addition, repossessing personal property securing a consumer loan can present additional challenges, including locating and taking physical possession of the collateral. We rely on servicers who service these consumer loans, to, among other things, collect principal and interest payments on the loan…

• Prepayment risk is the risk of change, whether an increase or a decrease, in the rate at which principal is returned in respect of fixed-income assets in our portfolio, including both through voluntary prepayments and through liquidations due to defaults and foreclosures. Most significantly, our por…

• The above analysis utilizes assumptions and estimates based on management's judgment and experience, and relies on financial models, which are inherently imperfect; in fact, different models can produce different results for the same instruments. While the table above reflects the estimated impacts …

• basis, monitoring the ongoing financial stability and future business plans of our financing counterparties, and maintaining a reasonable cushion of cash and unpledged real estate securities and loans in our portfolio in order to meet future margin calls.

Text removed vs the prior filing · source: 10-Q · 2026-05-11

• Severity risk is the risk of loss upon a borrower default on a mortgage loan or other secured or unsecured debt obligation. Severity risk includes the risk of loss of value of the property or other asset, if any, securing the mortgage loan or debt obligation, as well as the risk of loss associated w…

• Prepayment risk is the risk of change, whether an increase or a decrease, in the rate at which principal is returned in respect of fixed-income assets in our portfolio, including both through voluntary prepayments and through liquidations due to defaults and foreclosures. Most significantly, our por…

• behavior, are also substantially affected by government policy and regulation. For example, prepayment rates are generally lower in states with substantially higher mortgage recording taxes.

• The above analysis utilizes assumptions and estimates based on management's judgment and experience, and relies on financial models, which are inherently imperfect; in fact, different models can produce different results for the same instruments. While the table above reflects the estimated impacts …

• specific categories of instruments in our portfolio, we actively trade many of the instruments in our portfolio, and therefore our current or future portfolios may have risks that differ significantly from those of our March 31, 2026 portfolio estimated above. Moreover, the impact of changing intere…