Company: CIMO
Filing Date: 2025-02-19
Form Type: 10-K
Source: 0001628280-25-006426
Chunk: 105

Company: CHIMERA INVESTMENT CORP
Filing Date: 2025-02-19
Form: 10-K
Item: Item 1A
Chunk 105
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.22% in May and by September had retreated down to 6.08%, prompting a modest uptick in refinancing activity. The mortgage basis, which is the spread between MBS and Treasury benchmarks, remained mostly range-bound between 120 and 160 basis points and ended the year at 135. 

During 2024, the number of previously owned-homes that were sold declined for the third consecutive year and to the lowest level since 1995 reflecting what we believe was the continuation of the lock-in effect and homeowners are reluctant to trade in the low mortgage rate for a higher rate if they sell their home. New home construction was up slightly from 2023, but new homes for sale that are under construction peaked in March and were slightly down from that peak in December. The number of completed new homes for sale hit its highest level in December since 2009. Demand, however, on a national basis for newly constructed homes remained strong during the year as the time from completing construction to sale remained under 3 months as compared to a historical average of nearly 5 months.  

Our Strategy in 2024

Against this market backdrop, we managed our portfolio by increasing liquidity and diversifying sources of income. Consistent with this strategy, we raised $74 million from an equity raise in December 2023 and $140 million from two issuances of unsecured notes and deployed the net proceeds.

We invested approximately $102 million in subordinated tranches of new issue third-party mortgage securitizations backed by RPLs and small balance commercial properties. These investments were purchased at attractive unlevered yields. Finally, we invested $1 billion in floating rate Agency CMOs. These floating rate investments were purchased at levered yields that exceeded the cost of capital from the Company’s unsecured debt issuance. We believe these investments will provide an attractive return while serving as a source of liquidity during intermittent periods as we seek to deploy capital in loans or other investments. 

In 2024, we committed to purchase $1.1 billion of residential mortgage loans, down from $1.4 billion in 2023 and $1.7 billion in 2022. Of such loans, approximately 44% were seasoned RPLs, 29% were Non-QMs, and the remainder were BPLs. Of the $1.1 billion of residential mortgage loans that we committed to acquire in 2024, $130 million were RTLs and $308 million were Non-QM DSCR loans that settled in