Earnings PressureThe increase in interest rates and the higher-for-longer rate outlook has created headwinds for ABR’s business, such as the need for additional loan modifications to manage through problem loans, lower new originations, lower agency volumes, and increasing REO activity, which will be a drag on earnings over the next 12-24 months.
Interest Rate ImpactAgency lending volumes are pressured by higher interest rates.
REO IncreaseManagement expects REO (Real Estate Owned) to increase in coming quarters, contributing to the lower 2025 guidance.