About New York Mortgage Trust

New York Mortgage Trust Inc. operates as a real estate investment trust (REIT) for the U.S. federal income tax purposes that engages in the business of acquiring, investing in, financing and managing mortgage-related single-family and multi-family residential assets. The company's investment portfolio includes credit sensitive single-family and multi-family assets, as well as more traditional types of fixed-income investments that provide coupon income, such as Agency RMBS. The company intends to focus on its core portfolio strengths of single-family and multi-family residential assets, which will deliver better risk-adjusted returns over time. Due to current market conditions, the company also intends to acquire and manage a portfolio of Agency RMBS. The company's targeted investments include residential loans, including business purpose loans, structured multi-family property investments such as preferred equity in, and mezzanine loans to, owners of multi-family properties, Agency RMBS, non-Agency RMBS, CMBS, and certain other mortgage-, residential housing- and credit-related assets and strategic investments in companies from which it purchases, or may in the future purchase, its targeted assets. Investment Portfolio The company's portfolio is substantially consisting of investments in two asset categories: single-family and multi-family residential investments. Single-Family Investments The company has deep experience managing different whole loan strategies across the credit spectrum. The company generally seeks to acquire pools of single-family residential loans through proprietary sourcing channels from select mortgage loan originators and secondary market institutions, including through bulk purchases and/or flow arrangements, including through originators in which it holds an equity investment. Residential Loans: The company's portfolio of residential loans consists of seasoned re-performing, non-performing and other delinquent mortgage loans secured by first liens on one- to four-family properties, which were purchased at a discount to the aggregate principal amount outstanding, which provides it with downside protection while it works to rehabilitate these loans to performing status, performing residential mortgage loans that consist of GSE-eligible mortgage loans, non-QM loans that predominantly meet its underwriting guidelines, loans originally underwritten to GSE or another program's guidelines but are either undeliverable to the GSE or ineligible for a program due to certain underwriting or compliance errors, and investor loans generally underwritten to its program guidelines, short-term business purpose loans with terms generally of 12 to 24 months that are collateralized by residential properties and made to investors who intend to rehabilitate and sell the property for a profit, or business purpose bridge loans, business purpose loans that finance (or refinance) non-owner occupied residential properties that are rented to one or more tenants, or business purpose rental loans, and second mortgages that had combined loan-to-value ratios of 95% at origination and predominantly met its underwriting guidelines. In connection with its acquisitions of residential loans, the company or a third-party due diligence firm perform an independent review of the mortgage file to assess the state of mortgage loan files, the servicing of the mortgage loan and compliance with existing guidelines, as well as its ability to enforce the contractual rights in the mortgage. The company also obtains certain representations and warranties from each seller with respect to the mortgage loans, as well as the enforceability of the lien on the mortgaged property. In addition, as part of its process, the company focuses on selecting a servicer with the appropriate expertise to mitigate losses and maximize its overall return on these residential loans. This involves, among other things, performing due diligence on the servicer prior to their engagement, assigning the appropriate servicer on each loan based on certain characteristics and monitoring each servicer's performance on an ongoing basis. Agency RMBS: The company's leveraged Agency RMBS portfolio consist of Agency fixed-rate RMBS and Agency ARMs, the principal and interest of which are guaranteed by Fannie Mae, Freddie Mac or Ginnie Mae. The Agency fixed-rate RMBS have been primarily backed by 15-year and 30-year residential fixed-rate mortgage loans, while the Agency ARMs have primarily included interest reset periods up to 120 months. In managing its portfolio of Agency RMBS, the company expects to employ leverage through the use of repurchase agreements to generate risk-adjusted returns, subject to general and capital market conditions, among other factors. Non-Agency RMBS: The company's non-Agency RMBS are collateralized by residential credit assets. The non-Agency RMBS in the company's investment portfolio may consist of the senior, mezzanine or subordinated tranches in the securitizations. The underlying collateral of these securitizations are predominantly residential credit assets, which may be exposed to various macroeconomic and asset-specific credit risks. These securities have varying levels of credit enhancement which provide some structural protection from losses within the securitization from which the securities are issued. The company undertakes an in-depth assessment of the underlying collateral and securitization structure when investing in these assets, which may include modeling defaults, prepayments and loss across different scenarios. Single-Family Rental: The company also participates in the U.S. Department of Housing and Urban Development Housing Choice Vouchers program administered by local public housing agencies (PHAs) in which it acquires and then rents single-family rental homes to families that are eligible. The company targets PHAs with programs that help families with children move into high-opportunity neighborhoods with low poverty, high-performing schools, low crime and strong community resources in various markets, including Chicago, Illinois (IL); Baltimore, Maryland (MD); and Houston, Texas (TX). As of December 31, 2023, the company owned 524 single-family rental properties, the majority of which are located in Illinois and Maryland. Multi-Family Investments The company invests in multi-family credit assets. The company seeks to position its multi-family credit investment platform in the marketplace as a real estate investor focused on debt and equity transactions. The company intends to participate at various levels within the capital structure of the properties, typically as a capital partner by lending to or co-investing alongside a project-level sponsor that has already identified an attractive investment opportunity, or through a subordinated security of a multi-family loan securitization. The company's multi-family property investments are not limited to any particular geographic area in the United States, although its preferred and joint venture equity and mezzanine loan investments tend to be concentrated primarily in the southern and southeastern United States, as these regions tend to benefit from growing demand and a shortage in housing. The company generally focuses on middle market multi-family apartment communities with approximately 150 to 600 units located in secondary and tertiary markets that might benefit from strategic value-added improvements. In general terms, pending the disposition over time of its portfolio of joint venture equity investments, the company expects that its multi-family credit investments going forward will principally be in the form of preferred equity investments in, and mezzanine loans to, owners of multi-family properties, and multi-family CMBS. The company targets investments in multi-family properties. As a capital partner, the company generally seeks experienced property-level operators or real estate entrepreneurs who have the ability to identify and manage strong investment opportunities. The company generally requires its operating partners to maintain a material investment in every multi-family property in which it makes a preferred equity investment or to which it provides mezzanine financing. Preferred Equity: The company owns, and expects to originate in the future, preferred equity investments in entities that directly or indirectly own multi-family properties. Preferred equity is not secured, but holders have priority relative to the common equity on cash flow distributions and proceeds from capital events. In addition, as a preferred holder the company may seeks to enhance its position and protect its equity position with covenants that limit the entity's activities and grant to the preferred holders the right to control the property upon default under relevant loan agreements or under the terms of its preferred equity investments. Occasionally, the first-mortgage loan on a property prohibits additional liens and a preferred equity structure provides an attractive financing alternative. With preferred equity investments, the company may become a special limited partner or member in the ownership entity and may be entitled to take certain actions, or cause a liquidation, upon a default. Mezzanine Loans: The company has made in the past, and may make in the future, mezzanine loans that are senior to the operating partner's equity in, and subordinate to a first-mortgage loan on, a multi-family property. These loans are secured by pledges of ownership interests, in whole or in part, in entities that directly or indirectly own the real property. In addition, the company may require other collateral to secure mezzanine loans, including letters of credit, personal guarantees or collateral unrelated to the property. The company may structure its mezzanine loans so that it receives a fixed or variable interest rate on the loan. The company's mezzanine loans may also have prepayment lockouts, prepayment penalties, minimum profit hurdles or other mechanisms to protect and enhance returns in the event of premature repayment. The company expects these investments will typically have terms from three to ten years. Mezzanine loans typically have loan-to-value ratios between 70% and 90% when combined with the first-mortgage loan amount. Joint Venture Equity: As of December 31, 2023, the company owned joint venture equity investments in entities that own multi-family properties. Joint venture equity is a direct common equity ownership interest in an entity that owns a property. In this type of investment, the return of capital to it is variable and is made on a pro rata basis between it and its operating partners. The company has typically provided between 70% and 95% of the total common equity capital to its joint ventures, with its operating partner providing the balance of the common equity capital. In some cases, the company also participates in these property investments as a general partner or manager or co-general partner or manager, which may provide it with the ability to earn a promote upon disposition of the asset. In December 2021, the company entered into a joint venture that presently owns 13 multi-family properties in seven states, including Texas, Tennessee and Florida. The company is a co-manager of the joint venture and, as of December 31, 2023, owned an approximate 24% common equity interest in the joint venture. The company also held approximately $146.1 million of preferred equity interests in this joint venture as of December 31, 2023. Pursuant to the terms of the operating agreement for the joint venture, subject to certain conditions, the other investors in the joint venture have the ability to sell their ownership interests to the company, at their election, on an annual basis at the current fair value of the interests in the joint venture. Multi-Family CMBS: The company has invested in, and may in the future invest in, multi-Family CMBS consists of first loss PO securities issued by multi-family loan securitizations and certain IOs and/or mezzanine securities issued by these securitizations. Other Investments Although it represents a significantly smaller portion of the company's overall investment portfolio, it also owns and has invested in ABS, an equity investment in an entity that originates residential loans and an equity investment in an entity that owns and manages single-family rental properties. The company has made, and may in the future make, investments in the debt and/or equity of other entities engaged in single-family loan-related businesses, such as loan originators. As of December 31, 2023, the company owned a 50% equity interest in an entity that originates residential loans. In connection with investments in loan originators, the company has entered into and may in the future enter into flow agreements that allow or will allow it to purchase new loans from the loan originators in which it invests in accordance with the parameters set forth in the applicable flow agreement. In the future, the company may also acquire investments that are structured with terms that reflect a combination of the investment structures. The company also may invest, from time to time, based on market conditions, in other multi-family investments, structured investments in other property categories, equity and debt securities issued by entities that invest in residential and commercial real estate or in other mortgage-, real estate- and credit-related assets, and certain alternative investments not described here, subject to maintaining its qualification as a REIT and the maintenance of its exclusion from regulation as an investment company under the Investment Company Act or otherwise. Strategy The company's strategy is to own and manage a portfolio of primarily mortgage-related single-family and multi-family residential assets that include elements of credit risk and/or interest rate risk. Tax Status The company has elected to be taxed as a REIT for the U.S. federal income tax purposes and have complied, and intend to continue to comply, with the provisions of the Internal Revenue Code of 1986, as amended (the Internal Revenue Code), with respect thereto. Accordingly, the company does not expect to be subject to federal income tax on its REIT taxable income that the company distributes to its stockholders if certain asset, income, distribution and ownership tests and record keeping requirements are fulfilled. History New York Mortgage Trust, Inc. was founded in 2003. The company was incorporated as a Maryland corporation in 2003.