Company: MFAN
Filing Date: 2025-05-06
Form Type: 10-Q
Source: 0001055160-25-000007
Chunk: 134

Company: MFA FINANCIAL, INC.
Filing Date: 2025-05-06
Form: 10-Q
Item: Part I, Item 1
Chunk 134
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 Senior Notes272,503 75,128 72,390 75,218 (1)Carrying value of securitized debt, Convertible Senior Notes, 8.875% Senior Notes, 9.00% Senior Notes, and certain repurchase agreements is net of associated debt issuance costs.  Other Assets Measured at Fair Value on a Nonrecurring BasisThe Company holds REO and Commercial REO (see Note 5) at the lower of the current carrying amount or fair value less estimated selling costs.  The Company classifies fair value measurements of REO as Level 3 in the fair value hierarchy.REO - During the three months ended March 31, 2025 and 2024, the Company recorded REO with an aggregate estimated fair value, less estimated cost to sell, of $25.4 million and $19.3 million, respectively, at the time of foreclosure. During the first quarter of 2025, the Company reclassified an REO property originally classified as held for investment to held for sale status and marked it down to its estimated fair value, less estimated cost to sell, of $1.9 million.

Commercial REO - At December 31, 2023, the Company held one property which is considered Commercial REO. In the first quarter of 2024, this Commercial REO property’s estimated fair value, less estimated cost to sell, was updated to $33.3 million (from $34.2 million), of which the Company’s 75% interest was $25.0 million. 

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Table of ContentsMFA FINANCIAL, INC.NOTES TO THE UNAUDITED CONSOLIDATED FINANCIAL STATEMENTSMARCH 31, 2025

14.    Use of Special Purpose Entities and Variable Interest Entities 

 A Special Purpose Entity (“SPE”) is an entity designed to fulfill a specific limited need of the company that organized it.  SPEs are often used to facilitate transactions that involve securitizing financial assets or re-securitizing previously securitized financial assets.  The objective of such transactions may include obtaining non-recourse financing, obtaining liquidity or refinancing the underlying financial assets on improved terms.  Securitization involves transferring assets to a SPE to convert all or a portion of those assets into cash before they would have been realized in the normal course of business, through the SPE’s issuance of debt or equity instruments.  Investors in a SPE usually