About Anworth Mortgage Asset
Anworth Mortgage Asset Corporation operates as a real estate investment trust (REIT). The company is externally managed and advised by Anworth Management, LLC. The company’s principal business is to invest in, finance and manage a leveraged portfolio of residential mortgage-backed securities (MBS) and residential mortgage loans, which includes the following types of investments: Agency MBS, which include residential mortgage pass-through certificates and collateralized mortgage obligations, which are securities representing interests in pools of mortgage loans secured by residential property in which the principal and interest payments are guaranteed by a government-sponsored enterprise (GSE), such as the Federal National Mortgage Association (Fannie Mae) or the Federal Home Loan Mortgage Corporation (Freddie Mac). Non-Agency MBS, which are securities issued by companies that are not guaranteed by federally sponsored enterprises and that are secured primarily by first-lien residential mortgage loans. Residential Mortgage Loans: The company acquires non-Qualified Mortgage residential mortgage loans from independent loan originators with the intent of holding these loans for securitization. These loans are financed by a warehouse line of credit until securitization. The company also holds residential mortgage loans through consolidated securitization trusts. It finances these loans through asset-backed securities (ABS) issued by the consolidated securitization trusts. The ABS, which are held by unaffiliated third parties, are non-recourse financing. Target Investments The company’s investment portfolio focuses on two different strategies that embody its hybrid investment approach. The target investments that fall under these strategies are: Agency MBS This strategy includes investing in Agency MBS and the related derivative transactions. Agency MBS are collateralized by fixed-rate mortgage loans, adjustable-rate mortgage loans, hybrid mortgage loans, or any derivatives thereof, including mortgage pass-through certificates issued by a GSE, such as Fannie Mae and Freddie Mac; and ‘to-be-announced’ forward contracts, which are pools of mortgages with specific investment terms to be issued by government-sponsored enterprises at a future date. Mortgage Credit Investments These assets include investing in Non-Agency MBS, residential mortgage loans, and related derivative transactions. Examples of Non-Agency MBS include MBS collateralized by prime mortgage loans, alternative A- paper mortgage loans, and subprime mortgage loans, which may have fixed-rate, adjustable-rate or hybrid-rate terms. Non-Agency MBS Non-Agency MBS includes both senior and mezzanine MBS. Senior MBS refers to Non-Agency MBS that represent the senior-most tranches – that is tranches, which have the highest priority claim to cash flows from the related collateral pool within the MBS structure. Mezzanine MBS refers to subordinated tranches within the collateral pool. The Non-Agency MBS that the company purchases may include investment grade and non-investment grade classes, including non-rated securities. Residential Mortgage Loans Held-for-Securitization Residential mortgage loans held for securitization are held at the company’s wholly-owned subsidiary, Anworth Mortgage Loans, Inc., with the intent to sponsor its own securitizations. The residential mortgage loans held-for-securitization are financed by a warehouse line of credit. Residential Mortgage Loans Held-for-Investment Through Consolidated Securitization Trusts The company invests in residential mortgage loans held-for-investment through consolidated securitization trusts. The company finances its residential mortgage loans through ABS issued by the consolidated securitization trusts. The ABS, which are held by unaffiliated third parties are non-recourse financing. Residential Real Estate These assets consist primarily of single-family residential properties, which after renovation, the company leases to tenants. The company’s focus is on properties that produce high occupancy and attractive rental rates and generate long-term property appreciation. Strategy The company’s strategy is to invest in residential MBS (both Agency MBS and Non-Agency MBS), residential mortgage loans, and residential rental properties. Tax Status The company has elected to be taxed as a REIT under the Internal Revenue Code of 1986, as amended. As a result, the company is not subject to federal or state income taxation at the corporate level to the extent it distributes annually approximately 90% of its REIT taxable income to its shareholders and satisfies certain other requirements. History Anworth Mortgage Asset Corporation was founded in 1997. It was incorporated in Maryland in 1997. The company commenced its operations in 1998.
