Company: AOMN
Filing Date: 2025-03-24
Form Type: 10-K
Source: 0001766478-25-000019
Chunk: 170

Company: Angel Oak Mortgage REIT, Inc.
Filing Date: 2025-03-24
Form: 10-K
Item: Item 8
Chunk 170
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 both market comparable information and discounted cash flow modeling techniques.

We identified the assessment of the valuation of residential mortgage loans as a critical audit matter. A high degree of audit effort, including specialized skills and knowledge, was involved in evaluating the third-party pricing services’ valuation techniques and models as well as determining certain of the underlying valuation assumptions, including the prepayment rate, default rate, loss severity rate, and discount rate, which are subject to significant measurement uncertainty. The evaluation of these assumptions to 

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determine the fair value of residential mortgage loans required subjective and complex auditor judgment since the assumptions used were sensitive to variation.

The following are the primary procedures we performed to address this critical audit matter. We evaluated the design of certain internal controls related to the Company’s residential mortgage loan valuation process, including controls related to the evaluation of pricing service information and assumptions used in residential mortgage loan valuations. 

We evaluated the Company’s process to develop the residential mortgage loans valuation by testing certain sources of data and assumptions that the Company used and considered the relevance and reliability of such data and assumptions. We involved valuation professionals with specialized skills and knowledge who assisted in:

◦evaluating the design of the Company’s internal controls specific to the assessment of the third-party pricing services’ valuation techniques and models

◦evaluating that the methodology used by the Company in determining residential mortgage loan fair value is in accordance with U.S. GAAP

◦assessing the third-party pricing services’ valuation techniques and models through comparison to industry practices

◦recalculating the fair value of a selection of residential mortgage loans using the Company’s assumptions and comparing the results of our recalculation to the Company’s fair value estimate

◦developing an independent fair value estimate for a selection of residential mortgage loans at fair value based on independently developed valuation models and assumptions and comparing the results to the Company’s fair value estimate

/s/ KPMG

We have served as the Company’s auditor since 2018.

Atlanta, Georgia

March 24, 2025

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Angel Oak Mortgage REIT, Inc.Consolidated Balance Sheets(in thousands, except for share data)

As of:December 31, 2024December 31, 2023ASSETSResidential mortgage loans - at fair value$183,064 $380,040 Residential mortgage loans in securitization trusts - at fair value1,696,995 1,221,067 RMBS - at fair value 300,243 472,