Company: MFAN
Filing Date: 2025-11-06
Form Type: 10-Q
Source: 0001055160-25-000018
Chunk: 147

Company: MFA FINANCIAL, INC.
Filing Date: 2025-11-06
Form: 10-Q
Item: Part I, Item 1
Chunk 147
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.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 nine months ended September 30, 2025 and 2024, the Company recorded REO with an aggregate estimated fair value, less estimated cost to sell, of $85.1 million and $82.1 million, respectively, at the time of foreclosure. During the nine months ended September 30, 2025, the Company reclassified three REO properties originally classified as held for investment to held for sale status and marked them down to their estimated fair value, less estimated cost to sell, of $10.4 million.Commercial REO - During the nine months ended September 30, 2025, the Company did not record any new Commercial REO, but recorded valuation adjustments on existing Commercial REO totaling $(1.5) million. During the nine months ended September 30, 2024, the Company recognized at fair value two properties considered Commercial REO at $28.4 million and $40.0 million, of which the Company’s 75% and 49% interests were $10.3 million and $4.9 million (net of related third-party financing), respectively. During the nine months ended September 30, 2024, the Company recorded valuation adjustments on Commercial REO totaling $(0.7) million.

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Table of ContentsMFA FINANCIAL, INC.NOTES TO THE UNAUDITED CONSOLIDATED FINANCIAL STATEMENTSSEPTEMBER 30, 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