The primary components of our market risk are related to credit risk, interest rate risk, prepayment risk, extension risk, basis risk and market risk. While we do not seek to avoid risk completely, we believe many risks can be quantified from historical experience and we seek to actively manage those risks and to maintain capital levels consistent with the risks we undertake. Additionally, refer to Item 1A, “Risk Factors” included in our Annual Report on Form 10-K for the year ended December 31, 2025 for additional information on risks we face. Credit Risk Through our Investment Portfolio segment, we are subject to credit risk in connection with our investments in Non-Agency RMBS and residential mortgage loans and may face more credit risk on assets we own that are rated below ‘‘AAA’’ or not rated. The credit risk related to these investments pertains to the ability and willingness of the borrowers to make scheduled debt servicing payments, which is assessed by lenders before credit is granted and reviewed by us prior to investment and periodically throughout the loan and security term. We believe that residential loan credit quality, and thus the quality of our assets, is primarily determined by the borrowers’ credit profiles, payment history, loan characteristics, and with respect to certain RTLs and investor loans, the ability of the borrower to renovate the properties, lease and collect rental income. Through our Residential Origination segment, we are subject to credit risk related to loans originated prior to the sale to third parties. Loans that default prior to sale are withdrawn from the normal course offering process and are either sold to third-party distressed asset investors or retained and subjected to internal loss mitigation, workout, or foreclosure processes. Additionally, pursuant to the terms of the related purchase and sale agreements with third party investors, we are exposed to risks of default after the sale due to certain repurchase obligations that are negotiated at the time of sale. In connection with loan acquisitions, we or a third party perform an independent review of the mortgage file to assess the credit underwriting and compliance with respect to the mortgage loans as well as our ability to enforce the contractual rights in the mortgage. Depending on various elements of the proposed acquisition and loan and portfolio characteristics, we may not review all of the loans in a pool, but rather select an adverse sample of loans for diligence review based upon specific risk-based criteria such as property location, loan size, effective LTV ratio, payment history, borrower characteristics and other criteria we believe to be important indicators of credit risk. Additionally, we obtain representations and warranties from each seller with respect to the residential mortgage loans, including the origination and servicing of the mortgage loan as well as the enforceability of the lien on the mortgaged property. A loan that breaches any of these representations and warranties may obligate the related seller to repurchase the loan from us. Our Residential Origination segment’s lending activities also utilize third-party due diligence firms. However, to the extent loans are funded prior to review by the third-party review vendor, and there are adverse findings with respect to such loans, 102 depending on the deficiency we may not be able to sell the loan, or may not be able to obtain a price for the loan that exceeds our cost to originate, in which case we may realize a loss. Additionally, we closely monitor credit losses incurred, as well as how expectations of credit losses are expected to change on our Non-Agency RMBS and Loans held for investment portfolios. We estimate future credit losses based on historical experience, market trends and forecasts and current delinquencies, as well as expected recoveries. The net present value of these expected credit losses can change, sometimes significantly from period to period, as new information becomes available. When credit loss experience and expectations improve, we will expect to collect more principal on our investments. If credit loss experience and expectations deteriorate, we will expect to collect less principal on our investments. The favorable or unfavorable changes in credit losses are reflected in the yield on our investments in mortgage loans and recognized in earnings over the remaining life of our investments. The following table presents changes to net present value of expected credit losses for our Non-Agency RMBS and Loans held for investment portfolios during the previous five quarters. Gross losses are discounted at the rate used to amortize any discounts or premiums on our investments into income. A decrease (negative balance) in the “Increase/(decrease)” line item in the tables below represents a favorable change in expected credit losses. An increase (positive balance) in the “Increase/(decrease)” line item in the tables below represents an unfavorable change in expected credit losses. Changes to net present value of expected credit losses — Non-Agency RMBS For the Quarters Ended (dollars in thousands) Non-Agency RMBS June 30, 2026 March 31, 2026 December 31, 2025 September 30, 2025 June 30, 2025 Balance, beginning of period $ 96,017 $ 95,483 $ 93,781 $ 90,565 $ 89,065 Realized losses (1,637) (650) (1,441) (1,539) (1,613) Accretion 3,917 3,663 3,452 3,317 3,072 Losses on purchases — — — — — Losses on sold/paid-off (271) (276) (142) (7,328) — Increase/(decrease) 1,327 (2,203) (167) 8,766 41 Balance, end of period $ 99,353 $ 96,017 $ 95,483 $ 93,781 $ 90,565 Changes to net present value of expected credit losses — Loans held for Investment For the Quarters Ended (dollars in thousands) Loans held for investment June 30, 2026 March 31, 2026 December 31, 2025 September 30, 2025 June 30, 2025 Balance, beginning of period $ 78,402 $ 94,859 $ 97,910 $ 102,727 $ 106,961 Realized losses (2,307) (13,147) (6,565) (6,717) (7,816) Accretion 1,001 1,034 1,312 1,385 1,439 Losses on purchases — — — — — Increase/(decrease) (1,262) (4,344) 2,202 515 2,143 Balance, end of period $ 75,834 $ 78,402 $ 94,859 $ 97,910 $ 102,727 Additionally, the Non-Agency RMBS which we acquire for our portfolio are reviewed by us to ensure that they satisfy our risk-based criteria. Our review of Non-Agency RMBS and other ABS is based on quantitative and qualitative analysis of the risk-adjusted returns on Non-Agency RMBS and other ABS. This analysis includes an evaluation of the collateral characteristics supporting the RMBS such as borrower payment history, credit profiles, geographic concentrations, seasoning, collateral value, the security’s credit enhancement, payment priorities across classes of securities, and other pertinent factors. Interest Rate Risk Our net interest income, borrowing activities and profitability could be negatively affected by changes in interest rates and the shape of the yield curve. These risks may be influenced by factors that could lead the Federal Reserve to increase or decrease the federal funds rate and the supply of, and market demand for, U.S. Treasury securities. A prolonged period of volatile and unstable market conditions would likely increase our funding costs, reduce our net interest income and negatively affect the fair market value of our investments. This could in turn have a material adverse effect on our net income, operating results, or financial condition. Interest rate risk is highly sensitive to many factors, including governmental, monetary and tax policies, domestic and international economic and political considerations and other factors beyond our control. We are subject to interest rate risk in 103 connection with our investments, our lending activities and our related debt obligations, which are generally secured financing agreements and securitization trusts. Our secured financing agreements and warehouse facilities may be of limited duration that is periodically refinanced at current market rates. We typically mitigate this risk by utilizing derivative contracts, primarily interest rate swap agreements, swaptions, interest rate caps, and futures. While we may use interest rate hedges to mitigate risks related to changes in interest rate, the hedges may not fully offset interest expense movements. Interest Rate Effects on Mortgage Lending Operations Higher interest rates may also impact our mortgage lending activities undertaken by HomeXpress. Rising interest rates generally have the effect of reducing housing demand and overall activity as it increases the cost of purchasing a home. Correspondingly, the demand for mortgage credit would likely decline, reducing HomeXpress loan origination volume and related earnings. In the event that mortgage interest rates are trending lower, our lending operations may be exposed to risks related to reduced funding or Pull-through Rates on approved but unfunded or locked loans, as well as early prepayments with respect to loans sold to third parties. Borrowers with locked loans may seek to secure more favorable terms from other lenders prior to funding, resulting in lower Pull-through Rates. In addition, pursuant to certain purchase and sale agreements, we may be required to reimburse third-party investors for the premiums paid on loans that prepay shortly after sale (commonly referred to as premium recapture). Early payoffs in excess of our established reserves may adversely affect our earnings. Interest Rate Effects on Net Interest Income Our operating results depend, in large part, on differences between the income from our investments and our borrowing costs. Most of our warehouse facilities and secured financing agreements provide financing based on a floating rate of interest calculated on a fixed spread over SOFR. The fixed spread varies depending on the type of underlying asset that collateralizes the financing as well as the amount and term of that financing. During periods of rising interest rates, the borrowing costs associated with our investments tend to increase while the income earned from our investments may remain substantially unchanged or decrease. This will result in a narrowing of the net interest spread between the related assets and borrowings and may even result in losses. To the extent delinquencies or defaults increase, this could have an adverse effect on the spread between interest-earning assets and interest-bearing liabilities. We generally do not hedge against credit losses. Hedging techniques are partly based on assumed levels of prepayments of our residential mortgage loans and RMBS. If prepayments are slower or faster than assumed, the life of the residential mortgage loans and RMBS will be longer or shorter, which would reduce the effectiveness of any hedging strategies we may use and may cause losses on such transactions. Similarly, if interest rates declined and the levels of prepayments increased, this would have the effect of shortening the life of our interests in MSR financing receivables and may reduce the cash and interest income related to such investments. Interest Rate Effects on Fair Value Another component of interest rate risk is the effect changes in interest rates will have on the fair value of our investments and the assets we originate. We face the risk that the fair value of our assets will increase or decrease at different rates than that of our liabilities, including our hedging instruments, if any. We primarily assess our interest rate risk by estimating the duration of our assets compared to the duration of our liabilities and hedges. Duration essentially measures the market price movements of financial instruments as interest rates change. We generally calculate duration using various financial models, assumptions and empirical data. Different models and methodologies can produce different duration estimates for the same securities. The impact of changes in interest rates on the fair value of our assets is not linear. As the magnitude of interest rate movements increases, the corresponding changes in fair value may become progressively larger due to the convexity characteristics of the underlying assets. As a result, periods of significant interest rate volatility may produce disproportionately greater changes in the fair value of our assets. In addition, other factors impact the fair value of our interest rate-sensitive investments and hedging instruments, such as the shape of the yield curve, market expectations as to future interest rate changes and other market conditions. Accordingly, in the event of changes in actual interest rates, the change in the fair value of our assets would likely differ from that shown below and such difference might be material and adverse to our stockholders. Interest Rate Cap Risk We may also invest in adjustable-rate residential mortgage loans and RMBS. These are mortgages or RMBS in which the underlying mortgages are typically subject to periodic and lifetime interest rate cap and floors, which limit the amount by which the loan or security’s interest rate may change during any given period. However, our borrowing costs pursuant to our financing agreements will not be subject to similar restrictions. Therefore, in a period of increasing interest rates, interest rate costs on our borrowings could increase without limitation, while the interest-rate on our adjustable-rate residential mortgage loans and RMBS would effectively be limited. This problem will be magnified to the extent we acquire adjustable-rate RMBS that are not based on mortgages which are fully indexed. In addition, the mortgages or the underlying mortgages in an RMBS may be 104 subject to periodic payment caps that result in some portion of the interest being deferred and added to the principal outstanding. This could result in our receipt of less cash income available on our adjustable-rate mortgages or RMBS to pay the interest cost on our related borrowings. These factors could lower our net interest income or cause a net loss during periods of rising interest rates, which could harm our financial condition, cash flows and results of operations. Interest Rate Mismatch Risk We fund a substantial portion of our investments with borrowings that have interest rates based on indices with shorter maturities than indices used to derive the interest rate on the adjustable rate mortgage assets and MBS we own, thereby creating an interest rate mismatch between assets and liabilities. In many cases, our cost of funds would likely rise or fall more quickly than the earnings rate on our assets. During periods of changing interest rates, such interest rate mismatches could negatively impact our financial condition, cash flows and results of operations. We may utilize derivatives as part of the hedging strategies to mitigate interest rate mismatches. Our analysis of risk is based on our experience, estimates, models and assumptions. These analyses rely on models which utilize estimates of fair value and interest rate sensitivity. Actual economic conditions or implementation of investment decisions by our management may produce results that differ significantly from the estimates and assumptions used in our models and the projected results. To further mitigate potential interest rate risk, we have entered into agreements for longer term, non-MTM financing facilities at rates that are higher than short-term secured financing agreements. These longer term agreements are primarily collateralized by our less liquid Non-Agency RMBS assets. Having non-MTM financing facilities are intended to mitigate liquidity risk related to margin calls and prevent the need to liquidate collateral in a volatile market. If rates on short term secured financing agreements fall, we may be locked into higher interest expenses than would otherwise be available in the market to finance our portfolio. Our profitability and the value of our investment portfolio, including derivatives may be adversely affected during any period as a result of changing interest rates. The following table quantifies the potential changes in net interest income and market value on the assets we retain and derivatives, if interest rates go up or down 50 and 100 basis points, assuming parallel movements in the yield curves. All changes in income and value are measured against the projected net interest income and the value of the assets we retain at the base interest rate scenario. The base interest rate scenario assumes interest rates at June 30, 2026 and all prepayment and cash flow estimates are made at each rate sensitivity level. Actual results could differ significantly from these estimates. June 30, 2026 (1) Change in Interest Rate Projected Percentage Change in Net Interest Income (2) Projected Percentage Change in Market Value (3) -100 Basis Points (5.25) % 1.90 % -50 Basis Points (3.11) % 1.00 % Base Interest Rate — — +50 Basis Points 1.06 % (1.20) % +100 Basis Points 0.28 % (2.50) % (1) The retained securities are securities retained by us from securitization VIEs included in our portfolio and not the consolidated assets and liabilities of the VIEs. Our Consolidated Statements of Financial Condition include assets of consolidated VIEs that can only be used to settle obligations and liabilities of the VIEs for which creditors do not have recourse to us. (2) Includes preferred stock dividend expense. (3) Projected Percentage Change in Market Value is based on instantaneous moves in interest rates. Prepayment & Extension Risk - Investment Portfolio As we receive prepayments of principal on these investments, premiums and discounts on such investments will be amortized or accreted into interest income. In general, an increase in actual or expected prepayment rates will accelerate the amortization of purchase premiums, thereby reducing the interest income earned on the investments. Conversely, discounts on such investments are accelerated and accreted into interest income, increasing interest income when prepayments increase. Actual prepayment results may be materially different from the assumptions we use for our portfolio. Management computes the projected weighted-average life of our investments based on assumptions regarding the rate at which borrowers will prepay the underlying mortgages. If prepayment rates decrease in a rising interest rate environment, the average life of the related assets could extend beyond original expectations. This extension risk may result in a mismatch between the duration of our borrowings and the related assets being financed, which could impact our net interest income. In such cases, the income earned on the mortgage assets may remain stable, while borrowing costs could rise, potentially negatively affecting our results from operations. Additionally, in volatile markets, we may be forced to sell assets to maintain adequate liquidity, which could result in losses. 105 Basis Risk - Investment Portfolio We may seek to mitigate a portion of our interest rate risk through the use of interest rate swaps, caps and other derivative instruments, which are primarily intended to manage the interest rate exposure associated with our financing activities. These hedging instruments do not eliminate all market risk. In particular, changes in mortgage spreads, credit spreads, prepayment expectations, liquidity conditions and other market factors may cause the value of our assets to change differently than the value of our hedging instruments. As a result, declines in the fair value of our assets may exceed gains in the fair value of our hedging instruments, which could adversely affect our book value. Market Risk Market Value Risk Certain of our securities classified as available-for-sale are reflected at their estimated fair value with unrealized gains and losses excluded from earnings and reported in other comprehensive income. The estimated fair value of these securities fluctuates primarily due to changes in interest rates, prepayment speeds, market liquidity, credit quality, credit spreads and other factors. Generally, in a rising interest rate environment, the estimated fair value of these securities would be expected to decrease; conversely, in a decreasing interest rate environment, the estimated fair value of these securities would be expected to increase. As market volatility increases or liquidity decreases, the fair value of our investments may be adversely impacted. Real Estate Market Risk We own assets secured by real property and may own real property directly. Residential property values are subject to volatility and may be affected adversely by a number of factors, including, but not limited to, national, regional and local economic conditions and unemployment (which may be adversely affected by industry slowdowns and other factors); local real estate conditions (such as housing supply and demand); changes or continued weakness in specific industry segments; construction quality, age and design; demographic factors; natural disasters and other acts of God; and retroactive changes to building or similar codes. In addition, decreases in property values reduce the value of the collateral and the potential proceeds available to a borrower to repay our loans, which could also cause us to incur losses. Risk Management - Investment Portfolio Subject to maintaining our REIT status, we seek to manage risk exposure to protect our portfolio of residential mortgage loans, RMBS, and other assets and related debt against the effects of major interest rate changes. We generally seek to manage risk by: •monitoring and adjusting, if necessary, the interest rate resets related to our financings; •attempting to structure our financing agreements to have a range of different maturities, terms, amortizations and interest rate adjustment periods, rights to post both cash and collateral for margin calls and provisions for non-MTM financing facilities; •using derivatives, financial futures, swaps, options, caps, floors and forward sales to adjust the interest rate sensitivity of our portfolio of investments and borrowings; •using securitization financing to secure financing terms for an extended period of time in contrast to short term financing generally involved in our secured recourse financings; and •actively managing, through asset selection, on an aggregate basis, the interest rate indices, interest rate adjustment periods, and gross reset margins of our investments and the interest rate indices and adjustment periods of our financings. Our efforts to manage our assets and liabilities are focused on the timing and magnitude of the re-pricing of assets and liabilities. We attempt to control risks associated with interest rate movements. Methods for evaluating interest rate risk include an analysis of our interest rate sensitivity “gap,” which is the difference between interest-earning assets and interest-bearing liabilities maturing or re-pricing within a given time period. A gap is considered positive when the amount of interest-rate sensitive assets exceeds the amount of interest-rate sensitive liabilities. A gap is considered negative when the amount of interest-rate sensitive liabilities exceeds interest-rate sensitive assets. During a period of rising interest rates, a negative gap would tend to adversely affect net interest income, while a positive gap would tend to result in an increase in net interest income. During a period of falling interest rates, a negative gap would tend to result in an increase in net interest income, while a positive gap would tend to affect net interest income adversely. Because different types of assets and liabilities with the same or similar maturities may react differently to changes in overall market rates or conditions, changes in interest rates may affect net interest income positively or negatively even if an institution were perfectly matched in each maturity category. 106 The following table sets forth the estimated maturity or re-pricing of our interest-earning assets and interest-bearing liabilities at June 30, 2026. The amounts of assets and liabilities shown within a particular period were determined in accordance with the contractual terms of the assets and liabilities, and securities are included in the period in which their interest rates are first scheduled to adjust and not in the period in which they mature and includes the effect of the interest rate derivatives, if any. The interest rate sensitivity of our assets and liabilities in the table could vary substantially based on actual prepayments. June 30, 2026 (dollars in thousands) Within 3 Months 3-12 Months 1 Year to 3 Years Greater than 3 Years Total Rate sensitive assets $ 272,052 $ 4,491,781 $ 520,720 $ 8,936,182 $ 14,220,735 Cash equivalents 384,155 — — — 384,155 Total rate sensitive assets $ 656,207 $ 4,491,781 $ 520,720 $ 8,936,182 $ 14,604,890 Rate sensitive liabilities 7,060,352 2,829,122 452,093 2,119,012 12,460,579 Interest rate sensitivity gap $ (6,404,145) $ 1,662,659 $ 68,627 $ 6,817,170 $ 2,144,311 Cumulative rate sensitivity gap $ (6,404,145) $ (4,741,486) $ (4,672,859) $ 2,144,311 Cumulative interest rate sensitivity gap as a percentage of total rate sensitive assets (44) % (32) % (32) % 15 % Our analysis of risks is based on our management’s experience, estimates, models and assumptions. These analyses rely on models which utilize estimates of fair value and interest rate sensitivity. Actual economic conditions or implementation of investment decisions by our management may produce results that differ significantly from the estimates and assumptions used in our models and the projected results shown in the above tables. These analyses contain certain forward-looking statements and are subject to the safe harbor statement set forth under the heading, “Special Note Regarding Forward-Looking Statements.” Enterprise Risk Management We employ a “Three Layers of Defense Approach” to Enterprise Risk Management designed to assess and manage our operational, strategic, and financial risks. The “First Layer of Defense” consists of assessing key risks indicators facing each respective business unit within the Company. Our risk management unit is a separate group that acts as the “Second Layer of Defense”. The risk management unit partners with various business units to enhance their understanding, monitoring, managing and escalating risks as appropriate. The financial reporting unit operates under the requirements of the Sarbanes-Oxley Act. The “Third Layer of Defense” consists of many of our internal controls which are subject to an independent evaluation by our third-party internal auditors. As an independent third party, the mandate of the internal auditor is to objectively assess the adequacy and effectiveness of our internal control environment to improve risk management, control and governance processes. Periodic reporting from the risk management unit is provided to executive management and to the Audit Committee of the Board of Directors. Cybersecurity Risk Our cybersecurity risk management and strategy is incorporated into our Enterprise Risk Management process. Our Board of Directors, in coordination with the Audit Committee and the Risk Committee, oversees management of cybersecurity risk. Please refer to Item 1C, “Cybersecurity” in our Annual Report on Form 10-K for additional information about our cybersecurity risk management, strategy and governance. Business Continuity Plans Our Business Continuity Plans are prepared with the intent of providing guidelines to facilitate (i) employee safety and relocation; (ii) preparedness for carrying out activities and receiving communication; (iii) resumption and restoration of systems and business processes and (iv) the protection and integrity of the Company’s assets. Our Business Continuity Plans are designed to facilitate business process resilience in a broad range of scenarios with dedicated disaster recovery teams which are comprised of executive management and professionals across our various business units. Our Business Continuity Plans identify the critical systems and processes necessary for business operations as well as the resources, employees, and planning needed to support these systems and processes. Our Business Continuity Plans provide guidelines to aid in the timely resumption of business operations and for communication with employees, service providers and other key stakeholders needed to support these operations. Our Business Continuity Plans are a “living process” that evolve with the input and guidance of the key stakeholders, subject matter experts and industry best practices and is reviewed and updated at least annually. 107