We seek to manage our risks related to the credit quality of our assets, interest rates, liquidity, prepayment speeds and market value while, at the same time, seeking to provide an opportunity to stockholders to realize attractive risk-adjusted returns through ownership of our capital stock. While we do not seek to avoid risk completely, we believe the risk can be quantified from historical experience and seek to actively manage that risk, to earn sufficient compensation to justify taking those risks and to maintain capital levels consistent with the risks we undertake. Our strategies for managing risk and our exposure to such risks, as described in Item 7A of our Form 10-K, have not changed materially since December 31, 2025 except as described below. Credit Risk Our loans and investments are subject to credit risk. The performance and value of our loans and investments depend upon the owners’ ability to operate the properties that serve as our collateral so that they produce cash flows adequate to pay interest and principal due to us. To monitor this risk, our asset management team reviews our investment portfolios and is in regular contact with our borrowers, monitoring performance of the collateral and enforcing our rights as necessary. We seek to further manage credit risk associated with our Investing and Servicing Segment loans held-for-sale through the purchase of credit instruments. The following table presents our credit instruments as of June 30, 2026 and December 31, 2025 (dollars in thousands): Face Value of Loans Held-for-Sale Aggregate Notional Value of Credit Instruments Number of Credit Instruments June 30, 2026 $ 65,038 $ 40,000 1 December 31, 2025 $ 47,300 $ 70,000 1 In 2025, we entered into a credit default swap with a notional amount of $20.0 million to hedge a portion of credit risk on a large commercial loan held-for-investment. As of both June 30, 2026 and December 31, 2025, the notional amount of this credit default swap was $20.0 million. 107 Table of Contents Interest Rate Risk Interest rates are highly sensitive to many factors, including fiscal and monetary policies and domestic and international economic and political considerations, as well as other factors beyond our control. We are subject to interest rate risk in connection with our investments and the related financing obligations. In general, we seek to match the interest rate characteristics of our investments with the interest rate characteristics of any related financing obligations such as repurchase agreements, bank credit facilities, term loans, revolving facilities and securitizations. In instances where the interest rate characteristics of an investment and the related financing obligation are not matched, we mitigate such interest rate risk through the utilization of interest rate derivatives of the same duration. As discussed in Note 13 to the Condensed Consolidated Financial Statements, we entered into a series of derivative transactions during 2024 related to our residential loan portfolio in an effort to extend hedge duration. These transactions involved a series of reverse swap trades which effectively locked a portion of positive cash flows from our original hedges for a period of time. We simultaneously entered into a forward starting swap which will not be effective until June 2027. While the fair value of the forward starting swap will impact earnings, it will not impact net investment income until its effective date. The following table presents financial instruments where we have utilized interest rate derivatives to hedge interest rate risk and the related interest rate derivatives as of June 30, 2026 and December 31, 2025 (dollars in thousands); however, consistent with Note 13 to the Condensed Consolidated Financial Statements, the notional value and number of interest rate derivatives excludes the residential lending reverse swap trades and forward starting swaps as well as certain other interest rate swaps that were not effective as of June 30, 2026 and December 31, 2025: Face Value of Hedged Instruments Aggregate Notional Value ofInterest Rate Derivatives Number ofInterest Rate Derivatives Instrument hedged as of June 30, 2026 Loans held-for-sale $ 2,429,935 $ 1,459,800 25 RMBS, available-for-sale 168,814 40,000 1 CMBS, fair value option 100,986 57,380 2 HTM debt securities 115,436 90,595 4 Net lease properties 466,072 385,000 1 Secured financing agreements 450,500 450,500 1 Unsecured senior notes 3,875,000 3,875,000 8 $ 7,606,743 $ 6,358,275 42 Instrument hedged as of December 31, 2025 Loans held-for-sale $ 2,502,852 $ 2,238,400 28 RMBS, available-for-sale 172,554 40,000 1 CMBS, fair value option 102,587 57,380 2 HTM debt securities 22,302 16,898 3 Net lease properties 229,246 229,200 2 Secured financing agreements 490,000 490,000 2 Unsecured senior notes 3,275,000 3,275,000 7 $ 6,794,541 $ 6,346,878 45 The table below summarizes the estimated annual change in net investment income for our variable rate investments and our variable rate debt assuming increases or decreases in SOFR or other applicable index rates and adjusted for the effects of our interest rate hedging activities (amounts in thousands). However, this table excludes: (i) our floating rate residential loan debt along with its related hedges (see Note 13); (ii) certain other interest rate swaps that were not effective as of June 30, 2026 (see Note 13); and (iii) nonaccrual loans (see Note 4). Income (Expense) Subject to Interest Rate Sensitivity Variable rate investments and indebtedness (1) 0.50% Decrease 0.50% Increase 1.00% Increase Investment income from variable rate investments $ 19,012,710 $ (85,948) $ 92,552 $ 187,132 Interest expense from variable rate debt, net of interest rate derivatives (17,995,086) 87,803 (89,831) (179,661) Net investment income from variable rate instruments $ 1,017,624 $ 1,855 $ 2,721 $ 7,471 ______________________________________________________________________________________________________________________ (1)Includes the notional value of interest rate derivatives. 108 Table of Contents Foreign Currency Risk Our loans and investments that are denominated in a foreign currency are also subject to risks related to fluctuations in exchange rates. We generally mitigate this exposure by matching the currency of our foreign currency assets to the currency of the borrowings that finance those assets. As a result, we substantially reduce our exposure to changes in portfolio value related to changes in foreign exchange rates. We intend to hedge our net currency exposures in a prudent manner. However, our currency hedging strategies may not eliminate all of our currency risk due to, among other things, uncertainties in the timing and/or amount of payments received on the related investments, and/or unequal, inaccurate, or unavailable hedges to perfectly offset changes in future exchange rates. Additionally, we may be required under certain circumstances to collateralize our currency hedges for the benefit of the hedge counterparty, which could adversely affect our liquidity. Consistent with our strategy of hedging foreign currency exposure on certain investments, we typically enter into a series of forwards to fix the U.S. dollar amount of foreign currency denominated cash flows (interest income and principal payments) we expect to receive from our foreign currency denominated investments. Accordingly, the notional values and expiration dates of our foreign currency hedges approximate the amounts and timing of future payments we expect to receive on the related investments. The following table represents our assets and liabilities that are denominated in Pounds Sterling (“GBP”), Euros (“EUR”), Australian dollars (“AUD”), Swiss Francs (“CHF”) and Swedish Kronas (“SEK”) as well as our expected future net interest receipts (amounts in thousands): June 30, 2026 GBP EUR AUD CHF SEK Foreign currency assets £ 1,220,100 € 1,515,800 A$ 1,942,086 Fr. 43,513 kr 1,289,533 Foreign currency liabilities (832,326) (1,123,441) (1,358,090) (32,016) (1,002,679) Foreign currency contracts - notional, net (433,743) (434,076) (829,998) (11,243) (355,800) Subtotal (1) £ (45,969) € (41,717) A$ (246,002) Fr. 254 kr (68,946) ______________________________________________________________________________________________________________________ (1) Primarily relates to expected net interest cash flows on the respective assets and liabilities over their term. Substantially all of our net asset exposure to the GBP, EUR, AUD, CHF and SEK has been hedged with foreign currency forward contracts as of June 30, 2026, as indicated in the table above. Refer to Note 13 to the Condensed Consolidated Financial Statements for further detail regarding our foreign currency derivatives and their contractual maturities.