Mortgage Investments

In our mortgage portfolio, we do not make singular "bets" on the direction of interest rates. Instead, we seek to mitigate interest rate risk by hedging a sizable portion of our mortgage portfolio and target duration of one year or less. We seek to limit consumer credit risk by buying Agency and AAA-rated non-Agency loans. By employing these strategies, we believe we substantially reduce the risks in our mortgage portfolio, while still generating attractive cash flows to enhance shareholder dividends.