Ladies and gentlemen, good morning. Thank you for standing by in today's conference assemble, and w elcome to the MFA Financial, Inc 2022 Second Quarter Earnings Call. At this time, all lines are in listen-only mode. Later, there will be an opportunity for your questions and instructions will be given at that time. If you should require any assistance today, please press star followed by the zero and an AT&T operator will assist you. As a reminder, today's conference is being recorded. This time, it's my pleasure to turn the conference over to our host, Mr. Hal Schwartz. Please go ahead. Expectations and assumptions. Excuse me, speakers. There was some, an echo with the webcast link, so I just muted it. Okay. I muted the webcast. Okay, let me start over. Apologies for the snafu here. The information discussed on this conference call today may contain or refer to forward-looking statements regarding MFA Financial, Inc, which reflect management's beliefs, expectations and assumptions as to MFA's future performance and operations. When used, statements that are not historical in nature, including those containing words such as will, believe, expect, anticipate, estimate, should, could, would, or similar expressions are intended to identify forward-looking statements. All forward-looking statements speak only as of the date on which they are made. These types of statements are subject to various known and unknown risks, uncertainties, assumptions and other factors, including those described in MFA's annual report on Form 10-K for the year ended December 31, 2021, and other reports that it may file from time to time with the Securities and Exchange Commission. These risks, uncertainties and other factors could cause MFA's actual results to differ materially from those projected, expressed or implied in any forward-looking statements it makes. For additional information regarding MFA's use of forward-looking statements, please see the relevant disclosure in the press release announcing MFA's second quarter 2022 financial results. Thank you for your time. I would now like to turn this call over to MFA's CEO and President, Craig Knutson. Thank you, Hal. Good morning, everyone, and thank you for joining us here today for MFA Financial's second quarter 2022 earnings call. Also with me are Steve Yarad, our CFO, Gudmundur Kristjansson and Bryan Wulfsohn, our Co-Chief Investment Officers and other members of senior management. As you are all no doubt aware, the first half of 2022 has been an exceptionally challenging investment environment across nearly all asset classes with the possible exception of commodities and the U.S. dollar. The S&P 500 index was down over 16% in the second quarter and posted its worst first half of the year in over 50 years. Bond markets continued to sell off after a difficult first quarter, and bond indices were generally down about 10% for the first half of the year. Mortgage spreads widened materially, as did credit spreads with high-yield wider by nearly 300 basis points year-to-date. Persistently high inflation, continued geopolitical tension and an aggressive Fed tightening cycle that markets have not experienced since 1994 have combined to wreak havoc across financial markets. In short, there's been no place to hide thus far in 2022. Our team at MFA has taken steps to preserve capital and manage our duration beginning as early as the fourth quarter of last year, when it became clear that the Fed would need to move more dramatically than previously expected. We had $900 million of interest rate swaps at year-end, and as rates rose and duration extended, we increased this position to $2.4 billion at March 31 and again to $3.2 billion at June 30. We also slowed our loan acquisition pace in the first quarter and again in the second quarter. At the same time, we continued to execute securitizations through the first half of 2022 and into July. Although wider spreads combined with higher rates increased the cost of these deals, we have significantly reduced risk by terming out close to $2 billion of securitization financing in 2022. In fact, over 95% of our asset-based financing is now fixed via securitization or economically fixed via interest rate swap hedges. With last week's Fed increase, our swap book now generates positive carry of about 60 basis points as the floating rate receive leg exceeds the fixed rate pay leg. Future Fed rate increases, which are widely expected, will increase this positive carry further. We slowed our acquisitions during the second quarter, particularly of non-QM loans as market volatility made pricing difficult and created additional uncertainty about the cost of securitization. Taken together, these steps mitigated our book value decline. Although MFA was certainly not immune to book value diminution, our relative book value performance versus many in the peer group has been considerably better. It's also worth noting that a significant portion of MFA's book value decline is due to fair value marks on loans on our balance sheet that we will likely hold until payoff or maturity. As of June 30, the market discount to unpaid principal balance on our loan portfolio is approximately $475 million. Now, to be fair, we also have securitizations which are accounted for at fair value that are marked below par by approximately $233 million. Netting these two discounts produces a potential book value increase of approximately $242 million or $2.38 per share, assuming that the loans and the liabilities pay off at par. This amount would be offset by any realized losses on loans, but expected losses are relatively low, particularly on our purchase performing loans. Home price appreciation over the last 10+ years on our legacy NPL and RPL loans has significantly affected outcomes on these loans. Indeed, we've realized gains on REO liquidations for each of the last six quarters. We also prioritized liquidity during the first and second quarters of 2022, ending both periods with close to $400 million in cash. While holding a substantial portion of our equity in cash obviously creates a drag on overall ROE, this was not the time to swing for the fences. Having a sizable liquidity position provides a cushion in volatile markets and also gives us the ability to take advantage of opportunities that arise. Finally, I'd like to talk a little bit about housing and residential mortgage credit. We have seen dramatic home price appreciation over the last two years as demand for housing has far outstripped supply. This was due to many factors, among them increased household formation, post-pandemic trends leading to added demand for single-family homes, lack of new and existing supply of homes, and very low interest rates. Now of these influences, only the interest rate component has changed. The other factors driving housing prices still exist, and in fact, new home construction has fallen even more recently. Additionally, LTVs of purchase performing loans have generally been low and underwriting standards conservative, so overall mortgage credit is generally strong. Future home price appreciation will certainly slow, but any significant home price declines are hard to envision at this point. In fact, it strikes me as funny that I sometimes read that some percentage of home price listings has experienced list price reductions or that some percentage of homes did not trade at a premium to the listing price as evidence of housing weakness. It seems a more apt analogy would be a shift from a boil to a simmer. Lima One was a continued bright spot for MFA as they turned in another strong quarter with approximately $600 million of originations. Because we are intimately involved in the securitization market, we have an instant feedback loop with our business purpose loan originator and can adjust rates in real time, thus reducing the typical drag suffered by originators in a rising rate environment as their pipelines fill with sub-market coupons. Lima One's current origination BPL pipeline of about $450 million has a weighted average coupon today of approximately 8%. These high-quality and high-yielding assets will generate attractive returns as these loans close and are added to our balance sheet. Please turn to slide three. As previously mentioned, a difficult environment led to a book value decline of 8% for both GAAP and economic book value, $1.42 and $1.56 respectively. I would again point out that the aforementioned net discount from par of loans and securitized debt is $2.38 per share. Some of you will remember the credit reserve that we had 10 years ago or so on our legacy non-agency RMBS portfolio that many analysts and investors believed would be accreted to book value over the long run. We reported a GAAP loss of $108.6 million in the second quarter, primarily due to unrealized losses on residential whole loans at fair value. Distributable earnings came in at $47.2 million or $0.46 per share, and we paid our common dividend of $0.44 last Friday. Leverage ticked up from 3.1- 3.3x, primarily due to book value decline. I would point out that our leverage is increasingly now in the form of securitized debt. Please turn to page four. As I stated in my introductory remarks, our acquisition pace slowed in the second quarter, with nearly 70% of our loan acquisitions coming from Lima One. Our overall loan portfolio was slightly lower at quarter end, although that is mostly due to fair value marks rather than lower balances. We also executed three securitizations in the quarter and two more in July, and we now have nearly $4 billion of financing in the form of securitized debt. These transactions add durable non-recourse financing, create additional liquidity, and provide more balance sheet capacity that we can deploy in the future to acquire new loans that are now priced at higher yield levels. We reduced interest rate risk during the quarter by adding interest rate swaps, and we prioritized liquidity given the volatile market environment. Finally, our asset management team has continued to take advantage of a strong housing market with limited supply by liquidating $40 million of REO properties this quarter, posting a net gain of $7 million. Please turn to slide five. This slide illustrates the components of our investment portfolio and also the nature of our asset-based financings. While the liability pie chart shows $2.6 billion of mark-to-market borrowing. About $1.5 billion of this borrowing is at a significant discount to our available borrowing amount. This under-levering creates a cushion that increases the amount of asset price decline that needs to occur before we receive a margin call. During the second quarter, we experienced very minimal margin calls on our loan portfolio, and at the same time, our interest rate swap position generated cash from reverse margin calls. I will now turn the call over to Steve Y arad to discuss additional details of our financial results. Thank you, Craig. Please turn to slide six for an overview of our second quarter 2022 financial results. Craig outlined these opening remarks. Mark-to-market adjustments on MFA's investment portfolio again drove our GAAP results this quarter. As further increases in interest rates across the yield curve, combined with spread widening, resulted in asset valuation declines. These were substantially mitigated by our active portfolio management, including adding to our swap hedges and further use of securitization financing. As a result, book value declines were relatively modest and distributable earnings continued to cover the Q2 common dividend. I will now discuss our Q2 GAAP results in more detail. GAAP earnings were -$108.6 million or - $1.06 per common share. Net interest income was $52.6 million. Loan interest income increased nearly 3% to $102.4 million, as coupons and recent acquisitions have increased. The sequential quarter decline in net interest income reflects the impact of higher funding costs, consistent with the prevailing interest rate environment. Our net interest spread, including the impact of swap carry, decreased to 1.37% from 1.96% last quarter. However, with the recent Fed increase, our swap portfolio is now in a net receipt position, and this should benefit our cost of funds and net spread inclusive of swap carry going forward. Our CECL provision for credit losses was $30.4 million, primarily due to a $28.6 million dollar reserve adjustment to write down to zero an investment in a mortgage originator that recently ceased operations as a result of the current environment. In addition, CECL reserves increased modestly on the carrying value loan portfolio, primarily due to adjustments to prepayment speed assumptions used in our credit loss model. That said, actual charge-offs remain modest and at $833,000 for the six months ended June 30, are over 40% lower than the corresponding period in 2021. As already discussed, valuation of our residential whole loan portfolio was again impacted by the volatile rate environment. For loans held at fair value, net losses were $216.4 million. This is partially offset by net gains on economic hedging derivatives and securitized debt held at fair value of $132.4 million. In addition to the CECL reserve that I discussed earlier, we recorded a $10.6 million mark-to-market adjustment on an equity investment in another mortgage origination partner. This valuation adjustment equates to approximately 50% of the equity investment and is based on a valuation obtained from a third party. The entity is still in its development stages, and we believe that its financial position will be strong enough to navigate the current challenging environment. It should be noted that excluding this valuation adjustment and the $28.6 million CECL reserve, GAAP and economic book value would have declined approximately 6.5%. Further, following these adjustments, the carrying value of remaining minority investments in mortgage origination partners is approximately $32 million at June 30, 2022. Also included in other income is $10.7 million of origination, servicing, and other fee income from Lima One, which continues to perform strongly. Gudmundur will discuss Lima's performance for the quarter in more detail shortly. Finally, our G&A expenses were $29.6 million for the quarter, a $1.3 million increase over the first quarter, primarily due to higher personnel costs at Lima One. Other loan portfolio operating costs, meaning those not related to Lima One loan origination and servicing, were $13.2 million, a $2.8 million increase from the prior quarter. This increase is primarily due to higher securitization related expenses in the current quarter. Because we have elected the fair value option on recently completed securitization deals, GAAP does not permit us to capitalize these costs. Distributable earnings, a non-GAAP financial measure that adjusts GAAP net income primarily to exclude the impact of unrealized gains and losses and certain realized gains and losses from our investment activities, was $0.46 for the second quarter and exceeded the second quarter dividend to common shareholders of $0.44. On slide 16, we provide further information, including a reconciliation of all adjustments to GAAP net income to arrive at distributable earnings, both for the current quarter and for the previous four quarters. Also, this quarter, following changes to the way we structure our internal management reporting, we are presenting certain information on the results of our operating segments. This information is set out on slide 19- 20. With that, I will turn the call over to Bryan Wulfsohn. Thank you, Steve. Turn to slide seven. Home prices increased again in the second quarter, with year-over-year growth hovering around 20% in June. With the increase in mortgage rates and higher home prices, affordability has become an issue for many would-be homeowners. These factors led to a slight increase in the supply of homes on market over the quarter. However, supply levels still haven't reached pre-pandemic levels. The fundamental lack of housing inventory should continue to be a factor for the stability and growth to home prices. The employment backdrop remains strong and delinquencies remain muted. The credit in our portfolio continues to perform well, and given all the volatility and uncertainty, we continue to be cautious over the intermediate term as economic prospects become increasingly uncertain. Turning to slide eight. We reduced our purchases of non-QM loans again in the second quarter to $220 million, down from over $600 million in the first quarter, as volatility in rates and spreads remains elevated. We successfully executed another securitization over the quarter, totaling over $400 million of UPBs sold. Recently, we have been purchasing loans with coupons between mid to high 7% range at moderate premiums to par. We believe these new loan investments can generate low to mid-double-digit ROEs through securitization. Serious delinquencies decreased further in the non-QM portfolio as the percentage of loans 60 days delinquent or greater dropped 0.7%- 2.6%. The weighted average original LTV for borrowers that are 60 days delinquent was 66%, and that does not account for any potential home price appreciation post-origination. Many loans that experience delinquencies end up being paid in full as their borrowers have equity in the property and sell the property themselves. Turning to slide nine. Our RPL portfolio of approximately $835 million continues to perform well. 81% of our portfolio remains less than 60 days delinquent. Although the percentage of the portfolio 60 days delinquent in status was 19%, almost 35% of those borrowers continue to make payments. Prepay speeds slowed in the second quarter to a three-month CPR of 12, with increases in mortgage rates. A combination of the length of time our borrowers have remained current on their mortgage and home price appreciation has unlocked refinancing opportunities for many of our borrowers as the LTV on these loans has now dropped below 60. As a reminder, the loans constituting our RPL portfolio were purchased at discounts to par and prepayments are beneficial to returns. Turning to slide 10. Our asset management team continues to drive strong performance of our NPL portfolio. The team has worked in concert with our servicing partners to maximize outcomes on our portfolio. 39% of loans that were delinquent at purchase are now either performing or paid in full, and 50% have either liquidated or are REOs to be liquidated. We continue to aggressively sell properties in our REO portfolio. Over the last 12 months, we sold $180 million of properties for a net gain of $33 million, and 11% are still in nonperforming status. Our modifications have been effective, as three-quarters are either performing or paid in full. We are pleased with these results as they continue to outperform our assumptions at the time of purchase. Now I'd like to turn the call over to Gudmundur to walk you through our business purpose loans. Thanks, Bryan. Turning to page 11. July first marked the one-year anniversary of our acquisition of Lima One. The integration of Lima One into the MFA family couldn't have gone better, and the strategic vision we have implemented, coupled with MFA's capital markets expertise and strong balance sheet, has allowed Lima to continue to grow and attract business from the best real estate investors in the BPL space. None of this would have been possible if it weren't for the skilled and dedicated team at Lima One, which has executed exceptionally well on our strategic goals over the last 12 months. At the time of acquisition, Lima's trailing 12-month origination volume was approximately $900 million. Now, 12 months later, that stands at $2.2 billion, more than double what it was a year earlier. A key part of our strategy was and remains to improve the financing of the BPL loans that Lima One originates. To that end, over the last nine months, we have securitized approximately $1 billion of BPL loans originated by Lima One and have established securitization programs for all of the various loan products. Despite challenging market conditions for loan originators, Lima One continues to see strong demand for its BPL products and had another strong quarter with approximately $600 million originated in the second quarter. Throughout the year, we have proactively managed our origination pipeline by raising origination rates and making loan-level pricing adjustments to ensure that we continue to create attractive investments for MFA's balance sheet in any rate environment. As rates have risen, we have seen our production mix shift more towards shorter-term transitional loans as the more rate-sensitive longer-term rental loans feel the impact of higher rates more acutely. Despite the shift in product mix, overall volume in our origination pipeline has remained relatively stable. This is primarily due to Lima's broad product offerings across short- and long-term business purpose loans, which allows us to shift focus seamlessly between products as market conditions change. We believe Lima's product mix represents a key strength and differentiator that allows us to continue to create high-quality loans through changing market conditions. Lima's origination pipeline remains strong with some of the highest coupons we've seen in a long time, with a weighted average coupon of approximately 8%. We expect the loans we originate going forward to generate return on equity of mid to high teens. We see great short and long-term opportunities for Lima One. The significant interest rate and mortgage spread increases we have experienced in 2022 has put pressure on thinly capitalized BPL originators that are dependent on whole loan sales to manage their liquidity and balance sheet, as many whole loan buyers have stepped away as securitization and financing costs have increased throughout 2022. With Lima as an on-balance sheet lender, MFA is able to acquire BPL assets at substantially lower cost than other loan aggregators, which, coupled with our strong liquidity, has allowed Lima to gain market share while maintaining credit quality. We expect Lima to originate between $2 billion and $2.5 billion in 2022 and see Lima as well-positioned to continue being a leader in the BPL space for years to come. Finally, we completed our fourth single-family rental loan securitization in July. The deal consisted 100% of Lima One originated loans. Again, we showed our ability to execute securitizations in a challenging market. Turn to page 12, where we will discuss the Fix and Flip portfolio. We added loans of approximately $230 million UPB and $400 million max loan amount in the quarter. All loans were originated by Lima One, and we grew the portfolio by 18% in the quarter. This is the fourth consecutive quarter of portfolio growth, and the portfolio has grown by 140% since we acquired Lima One 12 months ago. We continue to find the Fix and Flip space highly attractive and are currently deploying capital at over 8% yield with mid to high double-digit return on equity. We closed our first Fix and Flip securitization in April when we securitized approximately $265 million of assets, all of which were originated by Lima One. The securitization has a five-year maturity and a revolving structure, which allows us to replace loans and pay down with new ones over a two-year reinvestment period, as well as fund rehab draws within the securitization as they occur. In this transaction, we sold bonds representing 90% of assets securitized. We believe this transaction expands, de-risks, and diversifies our BPL funding sources and completes another important goal in our strategic plan of developing and growing Lima's efficient origination platform. Our RTL securitization was a source of liquidity throughout the quarter as loans were paid off or replaced with new origination, and rehab draws were funded within the securitization. We continue to see a steady decline in 60+ day delinquent loans as the strong housing market, low initial LTVs, and the diligent work of our team has led to good outcomes. The 60+ day delinquency ratio declined 2%- 8% at the end of the quarter. Almost all of the loans that are 60+ day delinquent were originated prior to April 2020, and approximately 80% of them were originated by lenders other than Lima One. Lima One originated loans are currently about 90% of our Fix and Flip holdings, and they have a 60+ day delinquency rate of approximately 2%, speaking to the quality of Lima's origination and servicing activities. Finally, when loans pay off in full from serious delinquency, we often collect default interest, extension fees, and other fees on payoffs. For loans where there is meaningful equity in the property, these can add up. Since inception, we've collected approximately $8.5 million in these types of fees across our Fix and Flip portfolio. Turn to page 13. Our single-family rental loan portfolio continues to exhibit strong performance with attractive yields and low delinquency. Second quarter yield was 5.19%, and the 60+ day delinquency rate remained low at 2.4%. We acquired over $190 million of F-SFR loans in the quarter, all of which were originated by Lima One and grew the portfolio by 13% to approximately $1.3 billion at the end of the quarter. This is the fifth consecutive quarter of portfolio growth, and we've grown our SFR portfolio by over 150% since the acquisition of Lima One. We continue to adjust to rising rates and higher cost of funds in the securitization market in the quarter by frequently adjusting origination rates and fees to reflect an attractive return profile going forward. Currently, we're adding SFR loans at low to mid-7% yield, implying a mid double-digit return on equity on these loans going forward. We issued our third rental loan securitization in April and priced our fourth rental loan securitization in the middle of July. Approximately $475 million of loans were securitized between the two deals, and both deals consisted 100% of Lima One originated loans. MFA's capital markets team did a phenomenal job of marketing these transactions in a very challenging market environment, and we believe this demonstrated our ability to consistently execute on securitizations for this asset class. After completing the July securitization, the percentage of SFR financing that's non-mark-to-market is approximately 73%. We expect to continue to programmatically execute securitization to efficiently finance our single-family rental loans as they provide long-term, non-recourse, and non-mark-to-market financing benefits. With that, I will turn the call over to Craig for some final comments. Thank you, Gudmundur. Please turn to page 14. The second quarter of 2022 was obviously a challenging period in the fixed income and mortgage markets, but MFA's active risk management practice lessened the impact on the company through interest rate swaps, securitizations, and relatively low leverage. We generated distributable earnings of $0.46 during the quarter, prioritized liquidity, and freed up balance sheet capacity that we can deploy as market opportunities arise. Lima One continues to achieve excellent results despite raising rates to adjust to market conditions. A continued strong housing market benefits our mortgage credit exposure despite developing affordability issues for home buyers due to higher rates. Tom, would you please open the call to questions? Thank you very much. Ladies and gentlemen, if you'd like to ask a question today, please press one followed by zero. You'll hear an indication that you've been placed in queue. You can take yourself out of the queue by simply pressing the one-zero command again. Again, for questions, please press one zero at this time. We are gonna begin with a question from Bose George, representing KBW. Please go ahead. Hey, guys. This is actually Mike Smith on for Bose. Just a quick one on capital deployment. What's a normalized level for leverage? What are you looking for in the market to take up leverage and put some of that excess cash to work? Thanks for the question, Mike. I mean, we've said this before, we don't necessarily target a leverage number. I think, you know, the leverage sort of falls out of two things. One is asset purchases because we do leverage assets when we buy them. Then the second is how, you know, how we finance them. As we execute securitizations, typically that will raise the leverage a little bit because, you know, we get a higher effective advance rate through securitization. But, you know, if you look, it went from 3.1- 3.3, you know, I mean, I don't see it really differing materially from, you know, from somewhere in the low to mid threes at least, you know, quarter by quarter. Now that could, you know, that could change if we go out a few quarters and we buy, you know, a lot of really cheap assets. But, you know, at this point, I don't see that changing all that materially. Great. That's helpful color. Can you provide a quarter to date book value update? Sure. It's, you know, it's very preliminary. We don't really have a lot of numbers, but I think our best estimate would be the book value is probably up about 1% since June 30. Great. Thanks a lot for taking the questions. Sure, Mike. Next, we're gonna go to the line of Steve Delaney, representing JMP Securities. Please go ahead. Good morning, everyone. Thanks for the question. Congrats on the progress you've made with Lima One on both sides of the, you know, the rental and the fix and flip. Craig, I think you mentioned in your comments that you might have done two securitizations in July. We saw the one, the INVH2, which was the rental loans. Was there another one, done post quarter end, another product? Yeah. Hey, Steve, this is Bryan. Yeah, we completed- Hi, Bryan. Hi. We completed a securitization of RPL loans. The legacy loans that we account. Yeah, that was the other one. That was the other one. Okay, good. I think the good lender you mentioned, so the total securitization so far on the rental loans is two total, including the one in July? Yeah, for the rental loans, we did one in April. Yeah. We did another one in July. That's correct. Got it. Okay. All right. Thanks. And Craig, you know, back when we had the first quarter call, obviously that was in the midst of all the volatility. I'm thinking everyone was worried about liquidity, margin calls, et cetera, et cetera. I believe on that call you spoke quite a bit about warehouse lenders and your relationship with your warehouse lenders. Could you just give us an update on that in terms of sort of the willingness of the warehouse lending community to, you know, to support your building up of inventory ahead of securitizations? I'd appreciate that. Thanks. Sure, Steve. You know, thanks for the question. I mean, I would say that we have very strong relationships with our lenders. You know, they don't just lend us money, they're the ones that do the securitizations and sell the securities. It's really a soup to nuts relationship. We've certainly seen no reticence at all from any lenders. In fact, you know, there are various parties that would like to lend us money on our loan portfolio and we'd love to be able to do that, but we just don't have enough borrowing to go around. I think if you think about what happened in the conventional space, right? All these lenders had probably mapped the balances out to, you know, to agency originators. You know, if anything, there's probably, you know, balance sheet to spare. Like I say, we've had no issues whatsoever. You know, I talked about margin calls. Because we underlever a significant portion, over half of that, mark-to-market financing, you know, we get very few margin calls. I think our loan margin calls in the second quarter, you know, might have been $10 million for the whole quarter. We probably netted $50 million of cash in from our swap position. You know, it's been not that difficult to manage that liquidity. Also, you know, our recourse leverage has also ticked down. Our recourse leverage is now just 1.8x. This... You know, I think this policy of securitizing frequently and often in all the various product types, it was gonna serve us well over time. Okay. That's great. Really, really appreciate the comments. Thank you. Thanks, Steve. Our next question comes from the line of Eric Hagen, representing BTIG. Please go ahead. Hey, thanks. Good morning. Hope you guys are doing well. Good morning. Maybe a few from me. Hey, good morning. You know, how do we think about the value in the NPL portfolio at this point? Like, what would you say is the duration or the spread over benchmark assets that you might look to describe the value that you're getting there? Can you also say how much liquidity you have beyond the $400 million in cash, whether there's a minimum level of liquidity that you target over the near and kind of medium to longer term? When we think about the value of the NPL portfolio and the duration of it's, you know, really the value is all those loans are considered to be at fair value, but half of that book now is actually performing, right? It's gonna have, plus or minus, you know, 5% coupon at the purchase at a, you know, big significant discount to par. Then the other half of the portfolio are, you know, they're just, you know, waiting to be liquidated. You know, given what we've seen in HPA and given what, you know, the prospects are for HPA going forward, you don't need to see too much growth to continue to see that sort of expected yield somewhere between 7% and 8% on those assets. Got it. That's helpful. Eric, this is Steve Yarad. Just addressing your question on additional sources of liquidity. I mean, as Craig referred to, we do have a significant under-borrowing on some of our warehouse, our master market warehouse lines. That's as much, you know, as much as $125 million-$150 million at the end of June. Got it. Said another way, Eric, right, we could borrow another $125 million or $150 million on those assets that we've pledged. We just don't because it's a sort of self-imposed discipline in creating that cushion. Got it. Okay, that's helpful. Can you say any of the retained tranches from securitization get pledged as collateral for financing? Up until very recently, the answer would be no. There have been a couple of deals that we've done since March 31st, where some of the pricing on, say for instance, some of the IG, the investment grade rated bonds was pretty wide, and we did retain a couple of those. They're typically fairly small tranches. Again, because you know we have a strong balance sheet, we can sort of impose that discipline on the market that if the pricing is really too wide, we can just retain those securities. You know, particularly those investment grade-rated tranches, we won't borrow on those because those are actually pretty easy to borrow, to lever. We could sell those in the future, right, should the levels become attractive. But for the time being, you know, if the tranche is gonna price at 7.5%-8%, we'd rather own that. Right. That's helpful. On the non-QM, can you remind us, is there a call option on the securitized debt, and how you might look to exercise that call option even if the market is relatively wide because the debt itself has delevered a little bit? Yeah. Generally, we will have a call option of, say, you know, two-three years' time for 30% of the UPB, of the original UPB, whichever comes sooner. Really it's a deal by deal kind of exercise that we'll look at to determine how far down it's delevered, where are spreads in the market today, and that will determine whether we, you know, call back the loans to reissue. Right. Thank you. Appreciate the comments. Thanks, Eric. We have a question from Doug Harter with Credit Suisse. You are open. Thanks. Can you talk about the relative return differential, you know, versus, you know, as you do securitization versus holding it on the warehouse lines? Yeah. I mean, I think so. It's securitized spread obviously widened during the year. I think if you're securitizing, you know, non-QM collateral in general where it's, you know, right, non-QM or the SFR loans we have, you know, the all-in cost of funds is probably between 5.5%-6%. It can range in collateral and, you know, types of deals. On the warehouse, you know, we are probably closer to, you know, LIBOR plus 200-250, something like that. You know, with LIBOR at, you know, 2.75-3.00, the cost of funds on warehouse is still lower, and probably to the tune of anywhere from, you know, 75-100 basis points. You know, from us, it's not actually all about just the cost of funds. The securitization provides tremendous benefits from a risk management perspective to think about both liquidity as well as the fact that it's you know non-mark-to-market, non-recourse. We think by moving more into securitization is definitely the path we wanna do, and that's what we've done obviously over the last 18-20 months. You know, you should expect us to continue to securitize in the future. For now, there's a benefit on warehouse versus securitizations. Got it. I guess switching to Lima One. You know, I guess, how do you view the level of profitability that you were able to generate in the second quarter and, you know, the sustainability of that, you know, in what's clearly become a more challenging market? No. Thank you for that question. I think the way we think about Lima One is really, you know, it's not one quarter to the next, but it's a business that we believe in in terms of the long-term, you know, ability to generate attractive assets for us on our balance sheet. As you've seen over the last 12 months, we've taken that business to a whole new level. The way we think about it is, you know, we'll continue to, you know, nurture them, give them all the tools that they need to improve their efficiencies and grow. I guess more importantly, as you've seen, we've raised dramatically there with the markets. As we said in our prepared remarks, the pipeline now has coupons of approximately 8%, and they're rising every day. The way we think about that is that we're creating our own credits with which is gonna perform really well going forward. You know, that's really how we think about as opposed to, you know, whether they generate an X ROE each quarter. We see that portfolio grow for us over time. Yeah. The one thing I would add is I think that the strategic benefit of Lima One is it's a, you know, it's a captive source of really high quality, high yielding assets. If we had to go buy those assets out in the marketplace and compete for those assets, we'd, you know, we'd be paying a lot more for those assets. The yields that we buy them at would be significantly lower, and it would just be more difficult to, you know, to acquire size in those assets. It's, you know, a little hard to quantify the strategic importance of that, but I think it's a real thing. The other thing I would just add from, as we think about the business, we effectively think about Lima creating these assets roughly at cost for us. You know, over cycles and over time, you know, we would expect that their, you know, origination fees, servicing fees, and the, just the fees that they generate in the normal course of business will kind of roughly offset the G&A. And you know, that's kind of how we would think about it over the long term. Got it. The portfolio would be more profitable, to Craig's point, that you would have to pay more to acquire those in the open market? Exactly. That can be a huge difference. I mean, for example, on the fix and flip side, you know, people are usually buying loans with stripped down coupons of anywhere from 200-300 basis points. That's always a huge benefit to us to retain them all in our balance sheet. Great. Thank you, guys. Thanks, Doug. Speakers, there's no other participants queued up at this time. All right. Thanks, Tom. I'd like to thank everyone for your interest in MFA Financial, and we look forward to our next update when we announce third quarter results in November. Thanks, Tom. Thank you very much. Ladies and gentlemen, that does conclude our conference for today. Thank you for your participation using the AT&T Event Services. You may now disconnect.