This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
See Cramer's multi-million dollar portfolio for FREE and get his new book Get Rich Carefully! Learn More

MFA Financial's Management Presents At The Morgan Stanley Financials Conference (Transcript)

So somewhat uniquely we think that our cost of funds on our agency portfolio will decrease over the next twelve months or so, which is somewhat unusual on our space. Now, obviously at the same time, to the expense that we replace run off on the Agencies, we are not buying new securities that yield 3.15. So we think that while the assets that we add will obviously come on at lower yield, the funding cost somewhat uniquely will decrease for us.

On the Non-Agency side, you can see that the yield in the first quarter on the Non-Agency portfolio was 6.92%, so close to 7% yield. Our average cost of funds there a little over 2% for a net interest rate spread of about 4.75%.

So on the Agency side, we have a balanced portfolio of hybrid ARMs, it were approximately 75% hybrid ARMs and about 25%, 15 year fixed. Our overall premium exposure is quite low, our average amortized cost of our agency portfolio is 102.8%, and we believe that we have limited exposure to HARP 2.0, or HARP 3.0 or 4.0 or whatever we see there. Most of the hybrid securities that we own that are HARP eligible, so that’s 3 June of 2009 are interest only. So the underlying mortgages are not amortizing principal. So the purpose really of HARP is to push these forward into a 30-year fully amortizing mortgages, and because of those 30-year mortgages are fully amortizing, in most cases the payment is actually -- even though the rate is lower, the payment is actually higher than the payment that these borrowers are making now on these interest only loans. So again, that is our observation that the payment that the borrower makes is typically more important than the interest rate associated with the mortgage.

Read the rest of this transcript for free on seekingalpha.com

Stock quotes in this article: MFA 

Select the service that is right for you!

COMPARE ALL SERVICES
Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
DOW 16,262.56 +89.32 0.55%
S&P 500 1,842.98 +12.37 0.68%
NASDAQ 4,034.1610 +11.4670 0.29%

Brokerage Partners

Rates from Bankrate.com

  • Mortgage
  • Credit Cards
  • Auto
Advertising Partners

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs