Company: ABR-PF
Filing Date: 2025-10-31
Form Type: 10-Q
Source: 0001253986-25-000022
Chunk: 253

Company: ARBOR REALTY TRUST INC
Filing Date: 2025-10-31
Form: 10-Q
Item: Part I, Item 8
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 modified to provide temporary rate relief through a pay and accrual feature (see Note 3 for details);

•Received cash distributions totaling $67.4 million and recognized income of $48.0 million from our equity investments in Lexford and a residential mortgage banking business (see Note 8 for details); and

•We foreclosed on two loans with a net carrying value of $107.8 million and charged-off $16.6 million of specific CECL reserves.

Agency Business Activity. Servicing portfolio of $35.17 billion (up $1.41 billion); Agency originations of $1.98 billion, including $391.2 million of new Agency loans that were recaptured from our Structured Business runoff. 

Subsequent Events. 

•In October 2025, we unwound CLO 16, redeeming the remaining outstanding notes totaling $482.1 million; and

•In October 2025, we foreclosed on five loans with a total UPB of $127.4 million that have specific reserves totaling $17.8 million..

Current Market Conditions, Risks and Recent Trends

During 2025, the Federal Reserve has so far lowered the federal funds rate twice totaling a 50-basis point reduction. General consensus is that the Federal Reserve may continue to lower rates in the near term. This high-interest rate environment, that has persisted longer than anticipated, could persist even longer if certain key economic indicators fail to align with the Federal Reserve’s expectations. Although short-term interest rates have declined, long-term interest rates remain highly volatile since the announcement of the current administrator’s imposition of increased tariffs and macroeconomic uncertainty. Analysts currently hold mixed expectations regarding the future trajectory of long-term rates for the remainder of 2025 due to the uncertainty regarding long-term inflation, fiscal policy, increased federal spending and larger deficits as a result of the recent enactment of the One Big Beautiful Bill Act (“OBBBA”), as described below.

As a result of the significant volatility in rates and the unpredictable impact of the tariff negotiations and the OBBBA, it is very difficult to predict where short and long-term rates will settle for the remainder of the year.

This elevated and unpredictable rate environment has resulted in, and may continue to result in, increased payment delinquencies and defaults, increased loan modifications and foreclosures and declining real estate values of certain asset classes, all of which have impacted, and may continue to impact, our future results of operations, financial condition, business prospects and ability to make distributions