Company: AOMN
Filing Date: 2025-03-24
Form Type: 10-K
Source: 0001766478-25-000019
Chunk: 38

Company: Angel Oak Mortgage REIT, Inc.
Filing Date: 2025-03-24
Form: 10-K
Item: Item 1A
Chunk 38
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closures to increase and lead to higher credit losses on our loans or other investments or on the pool of mortgage loans underlying securities we own.

The non-QM loans and other residential mortgage loans in which we invest are subject to a risk of default, among other risks.

Our strategy is to make credit-sensitive investments primarily in newly-originated first lien non-QM loans, which include investment property loans. We also may invest in other target assets. Further, we may identify and acquire our target assets through the secondary market when market conditions and asset prices are conducive to making attractive purchases. Such acquisitions and investments will subject us to risks which include, among others:

•declines in the value of residential or commercial real estate;

•risks related to benchmark rates such as the Secured Overnight Financing Rate (“SOFR”) as reference rates for loans, borrowings and securities;

•risks related to general and local economic conditions, including unemployment rates;

•lack of available mortgage funding for borrowers to refinance or sell their homes or other properties;

•overbuilding and/or housing availability;

•increases in property taxes;

•changes in U.S. federal and state lending laws;

•changes in zoning laws;

•costs resulting from the clean-up of, and liability to third parties for damages resulting from, environmental problems, such as indoor mold;

•casualty or condemnation losses;

•acts of God, terrorism, social unrest, and civil disturbances;

•uninsured damages from floods, earthquakes, wildfires, or other natural disasters, including those resulting from global climate change;

•limitations on and variations in rents;

•fluctuations in interest rates;

•undetected or unknown fraudulent activity by borrowers, originators, sellers of mortgage loans and/or other third party service providers;

•undetected deficiencies and/or inaccuracies in underlying mortgage loan documentation and calculations; and

•failure of the borrower to adequately maintain the property.

To the extent that assets underlying our investments are concentrated geographically, by property type or in certain other respects, we may be subject to certain of the foregoing risks to a greater extent. Additionally, we may be required to foreclose on a mortgage loan and 

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such actions would subject us to greater concentration of the risks of the real estate markets and risks related to the ownership and management of real property.

We may need to foreclose on certain of the residential mortgage loans we acquire, which could result in losses that materially and adversely affect us.

We may find it necessary or desirable to foreclose on certain of