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Commitments and Contingencies | 9 Months Ended
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Sep. 30, 2025
Commitments and Contingencies [Abstract] |
Commitments and Contingencies | Note 10 — Commitments and Contingencies The commitments and contingencies of the Company as of September 30, 2025 and December 31, 2024 are described below. Legal and Regulatory From time to time, the Company may be subject to potential liability under laws and government regulations and various claims and legal actions arising in the ordinary course of business. Liabilities are established for legal claims when payments associated with the claims become probable and the costs can be reasonably estimated. The actual costs of resolving legal claims may be substantially higher or lower than the amounts established for those claims. The Company has established immaterial reserves for these possible matters. Based on information currently available, management is not aware of any legal or regulatory claims that would have a material effect on the Company’s consolidated financial statements. Commitments to Purchase/Sell RMBS As of September 30, 2025 and December 31, 2024, the Company held forward TBA purchase and sale commitments with counterparties, which are forward Agency RMBS trades, whereby the Company committed to purchasing or selling a pool of securities at a particular interest rate. As of the date of the trade, the mortgage-backed securities underlying the pool that will be delivered to fulfill a TBA trade are not yet designated. The securities are typically “to be announced” 48 hours prior to the established trade settlement date. See Note 2 — Basis of Presentation and Significant Accounting Policies for details of unsettled RMBS trades, if any, as of September 30, 2025 and December 31, 2024. Acknowledgment Agreements In connection with the Fannie Mae MSR Financing Facility (as defined below in Note 12), entered into by Aurora and QRS III, those parties also entered into an acknowledgment agreement with Fannie Mae. Pursuant to that agreement, Fannie Mae consented to the pledge by Aurora and QRS III of their respective interests in MSRs for loans owned or securitized by Fannie Mae, and acknowledged the security interest of the lender in those MSRs. See Note 12—Notes Payable for a description of the Fannie Mae MSR Financing Facility and the financing facility it replaced. In connection with the Freddie Mac MSR Revolver (as defined below in Note 12), Aurora, QRS V, and the lender, with a limited joinder by the Company, entered into an acknowledgement agreement with Freddie Mac pursuant to which Freddie Mac consented to the pledge of the Freddie Mac MSRs securing the Freddie Mac MSR Revolver. Aurora and the lender also entered into a consent agreement with Freddie Mac pursuant to which Freddie Mac consented to the pledge of Aurora’s rights to reimbursement for advances on the underlying loans. See Note 12—Notes Payable for a description of the Freddie Mac MSR Revolver. Operating Lease The Company’s operating lease is comprised of a corporate office lease with a remaining term of approximately ten months. Operating lease right-of-use (“ROU”) asset represents the right to use an underlying asset for the lease term and lease liabilities represent obligations to make lease payments arising from the lease. The Company recognizes lease expense on a straight-line basis over the lease term. The lease cost for the three-month periods ended September 30, 2025 and September 30, 2024 was approximately $19 thousand and $15 thousand, respectively. The lease cost for the nine-month periods ended September 30, 2025 and September 30, 2024 was approximately $56 thousand and $15 thousand, respectively. Cash used for the operating lease during the nine-month periods ended September 30, 2025 and September 30, 2024 was approximately $56 thousand and $15 thousand, respectively. The table below summarizes the Company’s future commitments under the operating lease (dollars in thousands):
|  | Operating Lease Commitments |
2025 |  | $ | 19 |
2026 |  |  | 41 |
2027 |  |  | - |
Remaining undiscounted lease payments |  |  | 60 |
Less: imputed interest |  |  | 2 |
Remaining discounted lease payments |  | $ | 58 |
Other information related to the operating lease is summarized below as of the periods indicated:
| Classification |  | September 30, 2025 |  |  | December 31, 2024 |
ROU Assets | Receivables and other assets |  | $ | 58 |  |  | $ | 109 |
Lease Liabilities | Accrued expenses and other liabilities |  | $ | (58 | ) |  | $ | (109 | )
Weighted average remaining lease term in years |  |  |  | 0.9 |  |  |  | 1.6 |
Weighted average discount rate (A) |  |  |  | 8.18 | % |  |  | 8.18 | %
(A) | The Company uses an incremental borrowing rate in determining the present value of lease payments.

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