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Cherry Hill Mortgage Investment Corporation invests its own capital and borrowed money in U.S. residential mortgage-backed securities and mortgage servicing rights. These assets generate most of its revenue through interest and servicing fees. Its current securities portfolio consists entirely of Agency RMBS—mortgage-backed securities supported by government-sponsored housing agencies—and primarily holds fixed-rate mortgage pools. It earns the difference between asset income and financing and hedging costs.
The company also buys rights to collect fees for administering mortgages. Government-sponsored housing agencies or mortgage owners pay these fees, generally on loans that remain current. Its subsidiary Aurora holds servicing rights, but Cherry Hill hires third-party subservicers to perform the work rather than servicing loans itself. It retains the fees after servicing costs.
Income depends on borrowing costs, continued access to financing, borrowers’ repayments and the performance of outside servicers. Early mortgage repayments shorten the income stream from its assets. Owning servicing rights requires agency consent and continued compliance with capital and servicing requirements. Maintaining real estate investment trust (REIT) status and exemptions from investment-company registration also limits which assets it can hold and how it invests.
The risk section is the longest, dullest part of the filing. This keeps only what can really hurt you: where it hits, how hard, when it plays out.
Every company claims an edge. Each one is checked against hard numbers like margins and returns: which hold, and which line gives way first.
Annaly Capital Management shares both sides of Cherry Hill’s investment model: both collect interest from Agency mortgage securities and fees from rights to service home loans. Watch Annaly’s Agency investment spread and mortgage-servicing income for clues to the pressures on Cherry Hill’s two income streams.
PennyMac Mortgage Investment Trust shares Cherry Hill’s exposure to interest rates by combining Agency mortgage securities that pay interest with rights that earn mortgage-servicing fees. Its interest-rate-sensitive segment is the useful comparison for Cherry Hill, rather than its business buying newly originated loans from lenders and reselling them.
Orchid Island Capital and Cherry Hill both borrow to buy Agency residential mortgage securities funded by homeowners’ payments, so mortgage spreads, borrowing costs and early repayments affect both earnings and book values. Orchid’s net interest margin shows how much income this type of portfolio retains after financing costs.
ARMOUR Residential REIT shares Cherry Hill’s exposure to mortgage spreads and interest-rate hedging: both use borrowed money to hold Agency securities backed by fixed-rate home loans and earn mortgage interest. Watch ARMOUR’s financing and hedging costs to gauge the pressure on returns from Cherry Hill’s fixed-rate securities.
Dynex Capital mirrors Cherry Hill’s fixed-rate mortgage-securities exposure: both invest primarily in Agency residential securities that pass homeowners’ payments to investors. Changes in Dynex’s fixed-rate Agency holdings offer a comparison for the valuation and early-repayment risks in Cherry Hill’s securities portfolio.
Invesco Mortgage Capital and Cherry Hill both earn the gap between interest from Agency residential mortgage securities and the costs of borrowing and hedging. Watch Invesco’s asset returns against those costs: a narrower gap signals pressure on the same source of Cherry Hill’s income.
Rithm Capital and Cherry Hill both depend on mortgage-servicing cash flows and early repayments, but Rithm keeps fee-earning servicing rights when it sells home loans, while Cherry Hill buys those rights and hires others to service the loans. Watch the retained servicing rights and servicing revenue in Rithm’s Origination and Servicing segment for a comparison with Cherry Hill’s servicing income.
Chimera Investment shares Cherry Hill’s exposure to borrowed-money mortgage investments and fee-earning servicing rights, but its substantial loan holdings and loan-origination business make it a broader comparison. Focus on Chimera’s Investment Portfolio interest income after borrowing costs, rather than HomeXpress’s mortgage-origination results.
MFA Financial and Cherry Hill both borrow to invest in residential mortgage securities and collect income from mortgage payments, but MFA’s larger whole-loan business makes borrowers’ ability to repay more important to its results. Compare MFA’s residential-securities returns and financing costs with Cherry Hill, rather than treating losses on loans it owns directly as equivalent.
Rithm Capital Corp. earningsRITM
Rithm Capital retains some servicing rights after selling home loans, so its servicing revenue offers a comparison for Cherry Hill’s servicing rights, which it owns but has third parties service.
Read Rithm Capital’s servicing revenue alongside the servicing rights it retains. Revenue that holds up or grows with those rights would suggest that servicing cash flows remain supported; weaker revenue would flag possible pressure in mortgage servicing, worth watching in Cherry Hill’s servicing income too. But Rithm retains rights after selling loans, while Cherry Hill buys rights and hires third parties to service the loans, so their revenues are not directly interchangeable; the takeaway is whether the servicing signal looks stronger or weaker.
Fed Interest Rate Decision
For Cherry Hill, the Fed’s policy rate shapes what it pays on short-term RMBS funding and what it earns on mortgage assets, while also affecting MSR values through expected loan prepayments.
Expected4.0%Last release4.0%
If it comes in above expectations
Higher rates can raise Cherry Hill’s short-term funding costs faster than fixed or rate-capped mortgage income adjusts, squeezing its RMBS spread; slower expected prepayments may support MSR values.
If it comes in below expectations
Lower rates can ease Cherry Hill’s short-term funding costs and support its RMBS spread, but faster expected prepayments may reduce MSR values.
Invesco Mortgage Capital Inc. earningsIVR
Invesco Mortgage Capital’s returns on Agency mortgage securities after financing and hedging costs show whether the spread income Cherry Hill also earns is under pressure.
Compare Invesco Mortgage Capital’s returns on Agency mortgage securities with its financing and hedging costs to see whether the net interest spread—the amount left after those costs—is widening or narrowing. A wider spread means more income remains from this type of investment; a narrower one means less remains and flags similar pressure on Cherry Hill’s RMBS income, showing whether the room left by securities investing is growing or shrinking.
CHERRY HILL MORTGAGE INVESTMENT CORPORATION earningsThis company
Cherry Hill earns from the gap between mortgage-security income and financing costs, and from mortgage-servicing rights, so this report shows how much each stream leaves after its costs.
Read the interest income from residential mortgage-backed securities (RMBS) against financing and hedging costs, then compare servicing fees with servicing costs. A wider net interest spread and higher net servicing income would mean both the securities portfolio and servicing rights are contributing more; weakness in either would locate the pressure, showing whether Cherry Hill’s income engine is strengthening or one part is losing ground.
