Organization

6 Months Ended

Jun. 30, 2020

Organization, Consolidation and Presentation of Financial Statements [Abstract]

New York Mortgage Trust, Inc., together with its consolidated subsidiaries (“NYMT,” “we,” “our,” or the “Company”), is a real estate investment trust, or REIT, in the business of acquiring, investing in, financing and managing primarily mortgage-related single-family and multi-family residential assets. Our objective is to deliver long-term stable distributions to our stockholders over changing economic conditions through a combination of net interest margin and capital gains from a diversified investment portfolio. Our investment portfolio includes credit sensitive residential and multi-family assets, including investments that may have been sourced from distressed markets.

The Company conducts its business through the parent company, New York Mortgage Trust, Inc., and several subsidiaries, including special purpose subsidiaries established for securitization purposes, taxable REIT subsidiaries (“TRSs”) and qualified REIT subsidiaries (“QRSs”). The Company consolidates all of its subsidiaries under generally accepted accounting principles in the United States of America (“GAAP”).

The Company is organized and conducts its operations to qualify as a REIT for U.S. federal income tax purposes. As such, the Company will generally not be subject to federal income taxes on that portion of its income that is distributed to stockholders if it distributes at least 90% of its REIT taxable income to its stockholders by the due date of its federal income tax return and complies with various other requirements.

COVID-19 Impact

The outbreak of the novel coronavirus (“COVID-19”) pandemic around the globe continues to adversely impact the U.S. and world economies and has contributed to significant volatility in global financial and credit markets. The impact of the outbreak has evolved rapidly, with many countries taking drastic measures to slow the spread of the virus by instituting quarantines, lockdowns, shelter-in-place, stay-at-home or other social distancing measures and imposing travel restrictions. The major disruptions caused by COVID-19 significantly slowed many commercial activities in the U.S., resulting in a rapid rise in unemployment claims, reduced business revenues and sharp reductions in liquidity and the fair value of many assets, including those in which the Company invests.

During the three months ended June 30, 2020, many jurisdictions have begun to “reopen” by reducing measures that were previously taken to limit the spread of COVID-19, but the Company cannot predict the length of time that it will take for a meaningful economic recovery to take place or whether the U.S. government and other governments will continue to take actions designed to mitigate the impact of the virus and the response thereto in the economy. In a number of jurisdictions, these reopening measures led to a surge in new cases of COVID-19 which, in turn, led governmental authorities to reimpose certain of the restrictions that previously had been lifted, which could further materially and adversely affect the Company’s business. The ultimate duration and impact of the COVID-19 pandemic and response thereto remains highly uncertain, but we expect adverse economic and market conditions will persist throughout 2020.

The global pandemic associated with COVID-19 and related economic conditions caused financial and mortgage-related asset markets to come under extreme duress starting in mid-March, resulting in credit spread widening, a sharp decrease in interest rates and unprecedented illiquidity in repurchase agreement financing and mortgage-backed securities ("MBS") markets. These events, in turn, resulted in falling prices of our assets and increased margin calls from our repurchase agreement counterparties. In an effort to manage the Company’s portfolio through this unprecedented turmoil in the financial markets and improve liquidity, the Company executed the following measures during the three months ended March 31, 2020:


•	The Company sold approximately $2.0 billion of assets, recognizing a total net loss of approximately $301.7 million.


•	The Company terminated interest rate swap positions with an aggregate notional value of $495.5 million, recognizing a total net loss of $44.1 million.


•	The Company reduced its outstanding repurchase agreements by $1.7 billion from year-end levels, reducing its overall leverage to less than one times.

The Company continued to improve liquidity and executed the following measures during the three months ended June 30, 2020:


•	The Company obtained additional financing for residential loans pledged under a repurchase agreement in the amount of $248.8 million.


•	The Company further reduced its outstanding repurchase agreements to finance investment securities by $625.8 million from March 31, 2020. As of June 30, 2020, the Company had an outstanding repurchase agreement related to investment securities with one counterparty amounting to $87.6 million.


•	The Company completed a non-mark-to-market re-securitization backed by non-Agency residential mortgage-backed securities generating net proceeds of approximately $109.3 million.


•	The Company sold residential loans for approximately $43.8 million in proceeds, non-Agency RMBS for approximately $37.8 million in proceeds and CMBS for approximately $24.0 million in proceeds.

We transitioned in March to a fully remote work force, ensuring the safety and well-being of our employees. Our prior investments in technology, business continuity planning and cyber-security protocols have enabled us to continue working with limited operational impact and we expect to continue our remote work arrangement for the foreseeable future.