Financial Data and Key Metrics Changes - The company reported distributable earnings of $73 million or $0.35 per share for the third quarter [21] - The investment portfolio grew to $11.67 billion at September 30, with an all-in yield of 7.27% [31] - The average yield in core assets decreased to 6.95% from 7.95% in the previous quarter [33] Business Line Data and Key Metrics Changes - The agency business originated $2 billion in loans during the third quarter, marking the second highest production quarter in the company's history [16] - The single-family rental business originated approximately $150 million in the third quarter, totaling $1.2 billion for the year [17] - The construction lending business closed $145 million in deals during the third quarter, with a strong pipeline of $900 million in applications [19] Market Data and Key Metrics Changes - The company closed about $400 million in bridge lending in the third quarter, with a total of $850 million for the first nine months of the year [13] - The securitization market remains constructive, allowing the company to access liquidity effectively [4] - The company expects to originate between $8.5 and $9 billion in volume for the year, despite a challenging environment [19] Company Strategy and Development Direction - The company aims to resolve legacy assets aggressively, targeting a significant reduction in troubled assets by the second quarter of next year [9] - The strategy includes modifying loans, taking back assets as REOs, and bringing in new sponsors to stabilize income streams [11] - The company is optimistic about future origination volumes due to recent interest rate cuts [10] Management's Comments on Operating Environment and Future Outlook - Management believes the third and fourth quarters of the year will represent the bottom of the cycle, with expectations for improved market conditions [9] - The company is focused on creating efficiencies and generating strong returns on capital despite a competitive landscape [14] - Management expressed optimism about the interest rate environment improving, which could lead to increased origination volumes [20] Other Important Information - The company recorded a $48 million gain from the sale of a portion of the Lexford portfolio, contributing to a total of $55 million in income from legacy investments [6][8] - Delinquencies rose to $750 million as of September 30, reflecting the current cycle's stress [26] - The company expects fluctuations in quarterly earnings as it resolves legacy issues [22] Q&A Session Summary Question: Can you estimate the stability of performing loans in the portfolio? - Management indicated that the stability of performing loans varies by market and emphasized the importance of capital and management in stabilizing assets [37][38] Question: What is the expected run rate of interest income? - Management clarified that the $18 million accrued interest reversal was a one-time adjustment, with a projected ongoing reduction in interest income of about $16 million [48][50] Question: Can you provide details on the Homewood sale? - The company expects a $1 million realized loss on the Homewood sale, with a reserve reversal of $9 million due to selling above the written-down value [59][60] Question: What is the outlook for REO properties? - Management noted that while property income fell, they are actively working to improve occupancy and stabilize REO assets for future sales [64][66]