Good morning, ladies and gentlemen, and welcome to the second quarter 2026 Arbor Realty Trust Earnings Conference Call. At this time, all participants are in a listen-only mode. After the speaker's presentation, there will be a question and answer session. To ask a question during this period, you will need to press star one on your telephone keypad. If you want to remove yourself from the queue, please press star two. Please be advised that today's conference is being recorded. If you should need operator assistance, please press star zero. I would like to now turn the call over to your speaker today, Paul Elenio, Chief Financial Officer. Please go ahead. Thank you, Stephanie. Good morning, everyone, and welcome to the quarterly earnings call for Arbor Realty Trust. This morning we will discuss the results for the quarter ended June 30th, 2026. With me on the call today is Ivan Kaufman, our President and Chief Executive Officer. Before we begin, I need to inform you that statements made in this earnings call may be deemed forward-looking statements that are subject to risk and uncertainties, including information about possible or assumed future results of our business, financial condition, liquidity, results of operations, plans, and objectives. These statements are based on our beliefs, assumptions, and expectations of our future performance, taking into account the information currently available to us. Factors that could cause actual results to differ materially from Arbor's expectations in these forward-looking statements are detailed in our SEC reports. Listeners are cautioned not to place undue reliance on these forward-looking statements, which speak only as of today. Arbor undertakes no obligation to publicly update or revise these forward-looking statements to reflect events or circumstances after today or the occurrences of unanticipated events. I will now turn the call over to Arbor's President and CEO, Ivan Kaufman. Thank you, Paul, and thanks to everyone for joining us on today's call. As you can see from this morning's press release, we had a very active quarter in the capital markets and several notable transactions that have allowed us to increase our liquidity and drive higher returns on our capital as we continue to navigate through this extended downturn. First, we were once again successful in unwinding one of our legacy CLOs by financing these loans through our bank lines with superior terms. In fact, we were able to reduce our pricing by almost 40 basis points and enhance our leverage by nearly 10 points, which allowed us to generate approximately $135 million of additional liquidity and increase returns on our capital. We believe it's very important to point out that we had seven legacy CLOs with $9 billion of collateral in the height of the market. Through effective balance sheet management, we've de-leveraged $7.8 billion of CLOs, in addition to adding $2.5 billion of new vehicles for total capital markets transactions of $10 billion over the last 36 months. This leaves us with only one remaining legacy vehicle with $1.2 billion of collateral, which is currently levered at 66%, that we also expect to successfully unwind in the near future. We also closed on a $375 million convertible debt offering in early July, which we used the majority of the proceeds to pay off our September bonds earlier this week. This was an exceptional trade that allowed us to raise capital with pricing that is 400 basis points inside of straight debt and buy back a significant amount of our stock at 50% of book value. We used $114 million of the proceeds to buy back stock at $5.42, which will be highly accretive to both book value per share and our future earnings per share, as well as to allow us to be more aggressive in resolving our legacy loans quicker and reduce the drag on our earnings. The stock buyback portion of this trade also creates a natural hedge against the $6.10 convert price strike price. In fact, the stock would need to trade above $9.28 a share before we would have to issue more shares that we bought back in the deal, effectively creating convert premium of almost 100% above the current stock price. Just recently, we created another $185 million of liquidity from additional financing proceeds we're able to generate from one of our bank lines on existing collateral. These are extremely important accomplishments that, again, have enhanced our liquidity position and will allow us to work through our legacy loans very aggressively. We have also implemented several cost-saving strategies given a challenging climate that will have a very meaningful impact on reducing our expense load going forward. The first of which was a reduction of headcount in certain disciplines in order to properly rightsize our staff and payroll to the current environment. This was carried out last month, and we estimate the recurring savings after a one-time severance payment to be approximately $10 million annually or $0.05 a share. We will also continue to identify additional opportunities to reduce expenses going forward, which includes a big push to fully integrate AI across all aspects of our business, which will drive additional economies of scale through significant operational and process efficiencies. Turning now to our production numbers for the second quarter in our different business lines. In our agency platform, we originated $1.05 billion in volume in addition to $50 million in CMBS brokerage transactions for a total second quarter volume of $1.1 billion. This brings our year-to-date volume to around $1.9 billion, which is up 30% over last year. The elevated rates are certainly affecting our ability to close deals quickly and pushing out the timing somewhat. We have a growing pipeline of larger deals, which we expect will result in a stronger second half of the year, and hopefully allow us to produce similar volumes as we did in 2025, although the exact time of closing is hard to predict in this elevated rate environment. In our balance sheet lending business, we originated $160 million in volume in the second quarter and just over $550 million for the first half of 2026. This business continues to be incredibly competitive, and as a result, we are being highly selective and are focusing our attention on larger deals with high-quality sponsors. We guided between $1 billion-$1.5 billion of volume for 2026, which was reflective of the current environment. The bridge lending business is an important part of our overall strategy as it generates strong levered returns on our capital in the short term, while continue to build up a pipeline of future agency deals. With the significant efficiencies we continue to see in the securitization market and with our line lenders, we're able to produce strong returns on our capital despite the competitive landscape. In our single-family rental business, we had a strong second quarter and have seen a real uptick in our pipeline now that the housing b ill has been passed with the appropriate carve-outs for the build-to-rent businesses we discussed in the past. We originated $315 million of deals in the second quarter and $215 million in the month of July, for a total volume year to date of $700 million. Again, we are starting to see a real increase in our forward pipeline, which we expect will result in a very strong second half of the year. This is a great business as it offers us returns on our capital through the construction, bridge, and permanent lending opportunities and generates strong levered returns in the short term while providing significant long-term benefits by further diversifying our income streams. We're also very active in the construction lending business and expect to be able to originate $500 million-$750 million of this product as well. On our last earnings call, we discussed at length the effect the increase in interest rates is having on the timing and resolution of our non-performing and sub-performing loan book. We believe in the current rate environment, it will take us four to six quarters from now to resolve the vast majority of these assets, which will allow us to significantly reduce the drag on our earnings and build back our run rate of interest income for the future. Unfortunately, rates continue to remain elevated and volatile given the geopolitical landscape, which is certainly making it more challenging to resolve these loans quickly. Having said that, we feel confident that we have ring-fenced the majority of our issues and have a clear path to a resolution on these assets. The rate increases have delayed things a little bit, we are making good progress and again, expect to reduce this loan exposure consistently on a quarter-by-quarter basis. We ended up in the second quarter with approximately $525 million in delinquencies and around $545 million of REO assets for a total non-performing assets of roughly $1.07 billion, which is up nominally from last quarter's numbers as a result of things being slightly delayed due to elevated rates. We have, however, made strong progress in July, resolving $90 million of these assets this month and have another $105 million scheduled to be resolved next month that we have executed agreements on. This will bring down our non-performing loan book to approximately $875 million, or a 13% reduction from the first quarter. We also have line of sight on an additional $200 million-$300 million of delinquencies we expect to resolve in the third and fourth quarters, in addition to feeling very confident in our ability to reduce our existing REO book down to approximately $300 million by the end of the year as we have been actively marketing several of these assets for sale. This progress will go a long way towards significantly reducing the drag on earnings and increase our run rate of income for the future. As we discussed in detail on our last few calls, we continue to focus heavily on our legacy portfolio, which is down to $4.7 billion at June 30th from successfully resolving $800 million of these loans in the last quarter. $1.3 billion of the book continues to perform in accordance with their original terms, and $1.1 billion are either delinquent or REO, and that we have a clear line of sight to resolving over the next several quarters. The other $2.3 billion of this book we have been aggressively working through with the goal of restructuring and resolving $500 million of loans a quarter, which we are on pace to accomplish. This will reduce our legacy book, including our delinquencies and REO assets, down to around $2.4 billion by year-end and well below $1 billion by the end of 2027. We also continue to make progress in reducing the amount of accrued interest outstanding on certain loans in this subset by resetting the rates in today's market spreads and requiring that the borrower pay down a large portion of the outstanding accrued interest as part of the modified terms. In fact, of the roughly $600 million of legacy loans we resolved in Q2, on $500 million of these loans, we received approximately $15 million of back accrued interest in the second quarter and will receive another $10 million in accrued interest by the end of the third quarter. This will reduce our total accrued interest by approximately $25 million, and the total loans outstanding with accrued interest down to only $1.1 billion. As Paul will discuss in more detail, we produced distributable earnings of $0.15 a share in the second quarter, which was in line with our expectations and included $0.02 of one-time drag from some inefficiencies in our financing facilities. Clearly, our earnings are being greatly affected by the significant drag from our non-interest-earning assets, as well as from resetting legacy loans to today's market rates. We're taking a very aggressive stance with our borrowers in resolving our non-performing loan book. This would continue to affect our core earnings in the short term, which is not something we are focused on. Our goals are always longer term in nature, with our sights set on working through the loan book as quickly as possible, which will reduce the earnings drag from these assets and allow us to start to build back our run rate of interest income and drive higher returns in the future. This again, we estimate to take us four to six quarters to accomplish. We are taking a very methodical approach to resolving $500 million of these loans a quarter and bring down the remaining legacy book to a very nominal number relative to our total loan book. In summary, we have made tremendous progress in the capital markets with $12 billion of transactions between the unwind of our legacy CLO vehicles, the issuance of new CLOs, the unsecured and convertible debt markets we have accessed, and the efficiency we have been able to generate on our warehouse lines. This has allowed us to increase our liquidity and drive higher returns on our capital. Our agency business and our diversified origination platforms are all performing well despite elevated levels. With respect to our legacy book, we have made significant progress and we have a clear path to reducing this loan book on a quarter-by-quarter basis, which will put us in a position by the end of 2027 for this to represent a very nominal portion of our total loan book and allow us to grow our earnings run rate for the future. I will now turn the call over to Paul to take you through the financial results. Okay. Thank you, Ivan. In the second quarter, we produced distributable earnings of $31 million or $0.15 per share, excluding realized losses of $10 million from the resolution of certain delinquent and REO assets that we had previously reserved for. On last quarter's earnings call, we guided to around $15 million to $25 million in realized losses a quarter as we look to accelerate the resolution of our non-performing loan book. As Ivan mentioned, the elevated rate environment has pushed things out a bit. We have seen a little longer timeline to resolving certain assets, which resulted in slightly less realized losses for the second quarter than we anticipated. We are making good progress in the third quarter on resolutions. As a result, we expect realized losses to increase and be in the range of $20 million to $30 million for the next few quarters, although the exact timing on dispositions is tough to predict and could result in fluctuation in these numbers each quarter. Our second quarter numbers were in line with our guidance and expectations of $0.15 a share, which was reflective of roughly $0.02 a share of unusual drag from some inefficiencies related to our financing cost from a temporary overlap of interest for part of the quarter. As Ivan mentioned earlier, our aggressive approach to asset resolution is impacting our earnings in the short term, with long-term accretion expected as we continue to make more progress in this area. We have made good progress in the third quarter so far, which combined with the cost-cutting measures we have implemented and the positive effect the large buyback from our convertible debt offering will have on our distributable earnings per share, makes us optimistic that we'll be able to start to experience some growth in our run rate of income in 2027 as we realize the full benefit of converting our delinquent assets into performing loans. In the second quarter, we recorded an additional $14 million of impairment on our REO book to properly mark these assets to where we think we can effectuate a sale. We've engaged brokers to sell the bulk of these REO assets quickly and create interest-earning loans for the future. While we expect a few additional delinquencies in REO assets as we work through the bottom of the cycle, we believe we'll be able to resolve more non-performing loans than new ones and continue to reduce the drag on our earnings. We also booked another $22 million of specific reserves in our balance sheet loan book for total REO impairment and specific reserves of $36 million in the second quarter, which is up from a total of approximately $21 million in the first quarter. General CECL was also elevated this quarter from a change in the outlook for real estate values, resulting in an additional $16 million in reserves in our balance sheet loan book, which is an increase of $20 million from the first quarter. Given the current environment, we expect that we could experience similar levels of specific reserves and impairments over the next few quarters as we are being extremely aggressive in accelerating the resolution of our problem loans, which will allow us to reduce the drag on our earnings and grow our run rate of income for the future. Our book value per share came in at $10.95 at June 30th as a result of the increased reserves and impairments we booked in the second quarter as we are taking a very aggressive approach to resolving our legacy book. As Ivan noted earlier, the convertible debt offering we closed on July 6 contained a very unique buyback feature that's resulting in us using $114 million of proceeds from the offering to buy back stock and retire 21 million shares at less than 50% of book value. This is highly accretive to our book value per share, which on a pro forma basis increases our book value per share to $11.59 from $10.95 at June 30th, or a 6% increase. In our GSE agency business, we originated $1.1 billion of volume and had $1.1 billion in loan sales in the second quarter. The margin on these loans came in at 1.33% this quarter, compared to 1.86% last quarter, mainly due to some larger transactions we closed in the second quarter that contained lower margins. We also recorded $12 million of mortgage servicing rights income related to $1.2 billion of committed loans in the second quarter, representing an average MSR rate of around 1.1%, compared to 1.32% last quarter, again, due to an increase in the average loan size and a shift in product mix in the quarter. Our fee-based servicing portfolio grew to $36.7 billion at June 30th, with a weighted average servicing fee of 35 basis points and an estimated remaining life of six years, and will continue to generate a predictable annuity of income going forward of around $128 million gross annually. In our balance sheet lending operation, our investment portfolio was $12.1 billion at June 30th, with an all-in yield on this portfolio of 6.95%, compared to 7.03% at March 31st. This was mainly due to resetting rates on certain legacy loans and from the new delinquencies during the second quarter. The average balance in our core investments was $12.08 billion this quarter, compared to $12.04 billion last quarter from our second quarter growth. The average yield on these assets decreased to 7.21% from 7.50% last quarter, mainly due to significantly more back interest and default trends just collected in Q1 on loan resolutions, in addition to the effect of our second quarter delinquencies. Total debt on our core assets was approximately $10.5 billion at June 30th, compared to $10.7 billion at March 31st. This reduction was mainly due to the repayment of our $175 million senior notes in April. The all-in cost of debt was approximately 6.38% at 6/30 versus 6.40% at 3/31, mainly due to the unwind of CLO 17 with our bank lines in the second quarter at a reduced rate. The average balance on our debt facilities was approximately $10.5 billion for the second quarter compared to $10.4 billion in the first quarter, mainly due to the enhanced leverage received on the unwind of CLO 17 with our bank lines and the full effect of CLO 21, which was issued late in March. The average cost of funds on our debt facilities was 6.40% in the second quarter compared to 6.52% for the first quarter, excluding interest expense from levering our REO assets, the debt balance of which is separately stated on our balance sheet and therefore not included in our total debt on core assets. This decrease is mostly due to the reduced pricing received from the unwind of our legacy CLO vehicle and the full effect of CLO 21 issued late in the first quarter. Our overall spot net interest spreads were approximately 0.57% and 0.63% at June 30th and March 31st respectively. That completes our prepared remarks for this morning. I'll now turn it back to the operator to take any questions you may have at this time. Stephanie? Thank you. As a reminder, to ask a question, please press star one on your telephone. To withdraw your question, press star two. Others can hear your questions clearly, we ask you to pick up your handset for best sound quality. We'll take our first question from Chris Muller with Citizens Capital Markets. Please go ahead. Your line is open. Hey, guys. Thanks for taking the questions. I know you may not be able to answer this one, but I'm going to try anyway. You guys have been buying back a lot of stock. The discount to book value has persisted at pretty extreme levels. There's clearly a disconnect where you guys perceive the value and the market's perception. You guys have operated as a private company for a long time before your IPO in the early 2000s. I guess the question is, if this discount remains or gets worse, is there a point where you guys would explore some strategic alternatives as several of the other mortgage REITs are doing? Listen, our job is always to maximize shareholder value. There's a lot of paths to be able to do that, and clearly, that is one of the alternatives we consider in terms of maximizing shareholder value. Got it. I guess maybe changing gears to REO a little bit. You guys talked about on the last call getting that balance down to $250 million to $300 million by year-end, including adding another $100 million or so through that period. Foreclosures in the second quarter were $121 million, and Ivan, I heard you mention $300 million by year-end now. I guess the question is, are you guys expecting foreclosures to slow down dramatically in the back half of the year? Or are you expecting that you'll be able to sell down REO faster than you initially expected last quarter? I think we're working on all cylinders. We are definitely looking to accelerate our sale of REO assets. That does get impacted as there's volatility with interest rates. As rates move down, there's more liquidity. As rates move up, there's a little more uncertainty. That can be bumped around a little bit. We are much more aggressive with our borrowers in terms of moving forward with them and converting some of those loans from non-performing to REO, and that may bump up and be a little volatile as well. A lot of this is interest rate driven. We don't have control of all those variables, but our goal is to try and dispose of our REOs as quickly as possible. We're marking them as close to where we feel the markets and brokers are. With respect to our borrowers, if they can't come up with additional liquidity and reposition their loans, we're going to move very aggressively and move that along. As you know, certain jurisdictions create different problems. If you have assets in Texas or Atlanta or in areas like Phoenix, you can get a hold of those assets much more quickly. If you have assets i n areas like New York or Florida, it takes a lot longer. It all depends on all those factors, but our goals are still the same. Yeah. Chris, it's Paul. I think Ivan hit on all the points that are driving. It's hard to predict where this goes. Things are a little bit more delayed with higher interest rates. Just to put some finer points on the numbers, you mentioned $120 million of new REO for the quarter. Really, that number was $80 million, which was right in the range of the $50 million-$100 million that I guided to last quarter. The other $40 million were delinquent loans that we took back strategically as REO and on the same day, flipped them simultaneously. They're not really, in our minds, true REO assets that you're holding and marketing for sale over a long period of time or putting capital into rehab. Those were just strategic opportunities that we purposely foreclosed on and immediately had a takeout. Really, the number was $80 million. Having said that, what we've guided to is this $545 million on our books getting down to $300 million. Yes, we'll probably add a few here or there and sell a few other ones, the timing's just hard to predict with where rates are. Got it. I guess, how quickly does that REO sales market react to rates? If we get some relief on rates in the back half of the year, could we see REO sales accelerate in the back half of the year, or would that flip into 2027? Liquidity returns very quickly, and the sentiment changes when rates go up. You get a negative sentiment, and it gets harder to move them. When rates come down, it becomes very positive, and it's very dramatic. If we return to where rates were before the Iran issue, you'd see an enormous acceleration of the dispositions of the delinquencies and the REOs in a very real manner. Got it. That's very helpful. Fingers crossed for some rate relief in the back half of this year, and appreciate you guys taking the questions. That's what we think every night we go to bed. Thank you. We'll take our next question from Rick Shane with JP Morgan. Please go ahead. Your line is open. Hey, guys. Thanks for taking my questions this morning. Look, I'd like to talk about the REO sales and a couple of things here. One, can you talk a little bit about the types of buyers that are out there? Second, can you give us a sense of what% of seller financing you are providing on those REO sales? Are you not providing financing, or are you generally providing financing? Help us understand that a little bit better, please. Yeah. Let me speak about the type of buyers that are acquiring these assets. Generally, what we like to do is to go to our existing borrower base who have knowledge and expertise in these markets, who we have experience with. That's usually our first look. Those are usually done on a consensual basis where we take an asset that's showing trouble, and we know we're going to foreclose on. We bring them in along the process, so when it gets to the actual foreclosure, we can do a simultaneous transaction and avoid a lot of friction costs. There is a lot of friction costs if you have to close on an asset, finance it, step in with interim management. That's the optimum situation. It's usually done with people who we have great relationships and, in fact, have done many transactions we've had a lot of success with. That's the preferred profile. When we have existing REO assets that we've already taken back, I guess that had to do with prior strategy of trying to take the asset and move it along. We'll generally go to market on those once we've gotten to the right level. Our general strategy as of now is when we have a delinquency, when we have a potential REO, we pre-market that asset to people we've done business with and try and create a simultaneous transaction. I'll let Paul go through the numbers. Yeah, sure, Rick. Appreciate the question. A couple of things. When we look at these REO assets, as Ivan just laid out, the preferred buyer of those assets, we are generally providing some seller financing. There are occasions where we're just taking a cash offer. We had one or two this quarter where we took a cash offer and walked away. We are generally providing seller financing, and one of the reasons we're doing that is, one, we'd like to obviously put our money into a good loan if it's been recapped and they're putting in the right amount of new equity. Two, it's a certainty of execution. This is something Ivan and I talk about all the time. Sometimes in certain markets, time is not your friend on certain assets that as time marches on, things could deteriorate even further. When you have someone coming in and making a bid, if you're providing the financing, you have certainty that deal is going to get done in a short period of time. If you don't provide the financing and they have financing they're bringing to the table, we've seen sometimes where that financing walks. Now it's 30-60 days later, things are marching on, things are getting worse. You're back into the market. The certainty of execution is something we value a lot. As far as how we're lending, I know it looks like when you look at the disclosures that the sale prices are pretty much on top of the loans, you've got to look at it a little differently. We beefed up our disclosure this quarter to help people with this analysis. When someone's buying an asset, they're buying it for the purchase price, they're paying closing costs, they're bringing in CapEx, they're bringing in reserves. The total capitalization is much higher than the purchase price in a loan and carry. When we look at it, we're probably lending on average anywhere from 75%-85% loan to capitalization. That's the loan to value we're looking at. Some as high as 88, some as low as 70. In general, we're targeting 75%-85% of the total capitalization of that deal to be our loan. Got it. Okay. Thank you. Look, we're a month into the third quarter. Gain on sale margins had fluctuated a great deal between first and second quarter. Can we talk about that dynamic, and can you help us think about where we stand quarter to date so that we can all refine our models around that assumption as well? Sure. It has a lot to do with the change in profile of our business line, and a lot of it's been directed by the agencies. I think if you go back to the prior administrations, there was a real push towards small balance loans, towards B&C properties, towards affordability. We did a lot of small balance loans, and that was what was encouraged by the agencies. In the current administration, that is not the case. We've shifted our business dramatically, and our average loan size is probably going to be more than double what it was last year. We're doing a lot of large transactions. In the larger transactions, the fees are less, and the margins are less, but also note that the labor is less and the commissions are less as well. We are working on a significant number of larger transactions. The gain on sales will be smaller, but the expenses affiliated with those will also be significantly reduced. That's definitely the shift in our business line. Yeah, I would say just to guide you guys, Rick, is that I would say the margins are probably in the range that you saw this quarter going forward. Maybe a tad lower in some quarters, maybe a tad higher. I would say the 186 margins are not here for the next few quarters as when I look at our forward pipeline, as Ivan said, we have a lot of larger deals. We're upscaling to a better borrower, a better asset class. We think even though the margins are in and the servicing fee is in as a result, from a risk-adjusted return perspective, it's a better deal. Got it. I apologize to my peers for asking one last question, but interesting dynamic here. Obviously, on the agency side, you guys have an incentive to increase the loan size. Historically, the business has been make and hold in order to make and sell. Does that mean that going forward, we should assume on the structured side, the balance sheet side, loans are going to be bigger as well? Can you give us a sense of sort of what the new normal loan size will be in that case? There's no question about it that the balance sheet side has to match the agency, the execution. That's correct. That there was a big push five, seven years ago to do a lot of C assets turn them into B or a lot of B and turn them into A. That thesis was not as successful, and the agencies aren't encouraging it. Without a doubt, we are adjusting our balance sheet business. We are working on larger loans. I do want to point out that this, to me, is the most competitive market I've ever seen. I haven't seen a more competitive market on a bridge lending side of the business. I think 2021 and 2022 were competitive. I'm finding this more competitive because it's not just competitive on spread, it's not competitive on proceeds, it's competitive on structure as well. What we're having to do is work on bigger loans and really weigh in in terms of where we want to compete and put a lot of executive management into almost each and every single loan that we do. I would say that our average loans on our bridge has been significantly higher, and you'll see a much larger loan balance. Paul, do you have what our- Yeah, I do. Just for the second quarter, Rick, we did three balance sheet bridge loans totaling $160 million. Obviously, the average is over $50 million. We had one at $50, one at $100, and I think one at $20. In the prior quarter, we had, I think, $100 and even maybe even a $200 million loan. I would say that the loan size is anywhere from $50 up right now, right, Ivan, that's what we're saying? Yeah, I would say our minimum loan size is probably $25 million, and I wouldn't be surprised to have a $50+ million average loan on bridge. That's right. Okay. Thank you as always for taking my questions, guys. Thanks, Rick. Thank you. We'll take our next question from Jade Rahmani with KBW. Please go ahead. Your line is open. Thank you very much. Could you talk about what the increase in GSE risk sharing and if there's been any loan repurchase requests from the GSEs? Sure. We have seen, and I think all lenders have seen in the Fannie world, an increase in the delinquencies and in the loss share needed to handle those delinquencies. I think delinquencies on the agency side and the Fannie side are about 3.3% of our book. We have $82 million in reserves tucked away. We have $51 million of specific reserves. We took another nine this quarter. We have seen an increase in the delinquencies. This is what's to be expected when you're hitting the bottom of the cycle. When you're at the bottom of the cycle, this is what you normally see. It should level off here at some point, but it's about 3.3% of our portfolio. As far as buybacks, we have not had anything material brought to us from the agencies to require us to buy back. I think we had to buy back one asset, right, Ivan? It's a small asset, and we don't predict we're going to have any loss on it. I think it was $4 million. We have not seen any substantial significant material buyback requests at this point. Thank you. That's good to hear. Turning to the REO side, what do you expect the cumulative amount of CapEx spend to be on the remaining REO assets? It's tough to predict because this quarter, I think CapEx was around I have it in front of me. This quarter, the CapEx was about $8 million on the assets. It should come down because we are liquidating these things quickly, Jade. We're not looking. If we have something lined up that we're brokering and have good bids on, we'll look to turn and sell that quickly. We did $8 million for the quarter. I don't know if it stays there. We'll have a couple of new ones. We'll have some runoff. It all depends on the assets. It's a tough number to really get our hands around. I think the real comment that I have on that is on a go-forward basis, we're looking to dispose of loans that go from delinquent to REO, not taking them on management and not investing in them. There were a lot of assets we took back earlier that really got destroyed, we felt it was best to put the CapEx to bring them up to speed. We think it's better to transition those assets, even if we bring in a partner or maintain an interest who's more adept at it than we are. We're not looking to build up an inventory of heavy CapEx REO. Thanks very much. Thank you. We'll take our next question from Crispin Love with Piper Sandler. Please go ahead. Your line is open. Thank you. Good morning. I appreciate you taking the questions. First, Paul, can you share your net income outlook and trajectory going forward off of the second quarter levels and just some of the puts and takes there? Sure. I think as we said in our commentary, we are making a very big push and being very aggressive at resolving our delinquencies as quick as possible and also the legacy book that Ivan had in his commentary. We're trying to bring that down to a very nominal number as a portion of our total portfolio. We do think, and with rates being elevated, we do think things are slower, it's taking longer, and it will put some pressure on our short-term earnings. I think that the things that offset that are the significant expense reductions we mentioned today on the call and the cuts we made in staffing and also the fact that buying back a significant amount of stock, which we think is one of the best investments we could make, especially where it's trading relative to book, is very accretive going forward to diluted EPS and distributable earnings. I think all those things weighing together, I think we're expecting distributable earnings to be in this range, probably in the 15-17 range over the next two or three quarters until we get a lot of this behind us. Like I said in my commentary, we expect that we'll start to see some movement up in 2027 as we make more meaningful progress. On the net income side, we could see some losses over the next couple of quarters just because we are being more active in resolving things and taking more reserves. I think I said in my commentary, we think given the market, we could take similar reserve levels going forward. General CECL was a little higher this quarter due to just the way the models work. I don't know if that continues, but on the specific side, we are expecting to take similar specific reserves going forward over the next few quarters until we can get this behind us. Great. I appreciate that. Just on agency originations, definitely strong in the quarter despite the rate moves we saw. Can you discuss what drove that? Was it just because of the larger loans or anything else? Just relatedly, I might have missed this in the prepared remarks, but just the origination outlook and agency near term just given rate moves with treasury yields trending higher. I think that we've developed a good pipeline and good pipeline management. What we've been very effective to do with our team is to put every single loan in the system in a rate lock position as quickly as we can. As rates are volatile and go up and down, if there's an intraday or inter week drop of 10, 20 basis points, we're able to really step up with that borrower and get them to move along. It's really getting the pipeline in a great position. That's the goal. That's a different management technique that we've really instituted over the last 90 days. A new management team is really adept at it. It's been very beneficial to us. We do have a lot of larger loans so you can really pay attention on a larger loan basis and really get them geared up. We have shifted our customer profile. We've done a great job with this, the pipeline's pretty sizable. As rates continue to be volatile, I think you'll see in our estimation the opportunity to match what we did last year in volume. I think it's just hard to predict the timing of closed loans with where rates are. Some loans are rate sensitive, right, Crispin? In July, we did $305 million of volume. I think we had targeted over $400 million. Some of those loans pushed into August given where rates are. We're hopeful that given the size of the pipeline that we have on the back half of the year, we can get to similar numbers, maybe within 10% of what we did last year. We just don't have the exact timing of when things could close given the rates. We did do $305 million in July if that helps you kind of figure out where we're going. Thanks. Very helpful, I definitely understand the difficulty in looking forward on this. I appreciate you taking my questions. Yes. Thank you. This concludes the time we have for our question and answer session. I would like to now turn the conference back to Ivan Kaufman for any additional or closing remarks. All right. Thank you, everybody, for participating. It's been a long downturn. We're extraordinarily well positioned to work through the rest of this downturn. Everybody have a great weekend. Take care. Thank you. This brings us to the end of today's meeting. We appreciate your time and participation. You may now disconnect.