Larry Penn – CEO Lisa Mumford - CFO Mark Tecotzky - Co-CIO Lindsay Tragler – VP of IR.

Steve Delaney – JMP Securities Jason Stewart – Compass Point Research & Trading.

Good morning ladies and gentlemen. Thank you for standing by. Welcome to Ellington Financial’s Third Quarter 2014 Financial Results Conference Call. Today’s call is being recorded. At this time all participants have been placed in a listen-only mode and the floor will be opened for your questions following the presentation. (Operator Instructions).

It is now my pleasure to turn the floor over to Lindsay Tragler, Investor Relations. You may begin..

Thanks Susan. Before we start, I would like to remind everyone that certain statements made during this conference call may constitute forward-looking statements within the meaning of the Safe Harbor provisions of the Private Securities Litigation Reform Act of 1995.

Forward-looking statements are not historical in nature and they are based on management’s beliefs, assumptions and expectations.

As described under item 1A of our annual report on Form 10-K filed on March 14, 2014, forward-looking statements are subject to a variety of risks and uncertainties that could cause the company’s actual results to differ from its beliefs, expectations, estimates and projections.

Consequently, you should not rely on these forward-looking statements as predictions of future events. Statements made during this conference call are made as of the date of this call and the company undertakes no obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.

I have on the call with me today, Larry Penn, Chief Executive Officer of Ellington Financial; Mark Tecotzky, our Co-Chief Investment Officer; and Lisa Mumford, our Chief Financial Officer. With that, I will now turn the call over to Larry..

Thanks Lindsay. Once again, it’s our pleasure to speak with our shareholders this morning as we release our third quarter results. As always, we appreciate your taking the time to participate on the call today. First, a few highlights. It was a reasonably good quarter for Ellington Financial.

Our net income was $0.46 per share and both our agency and non-agency strategies made positive contributions to our net income. We declared our eighth consecutive quarterly dividend at the $0.77 level, which equates to a 13.75%r yield based on yesterday’s closing price.

We successfully completed a common share offering in early September and raised net proceeds of $188.2 million. We continue to see many attractive investment opportunities, particularly given our continued diversification, and the common share offering has enabled us to capitalize on this.

We also closed a new financing facility in the quarter that I’ll talk more about later. It’s the kind of facility that I think could have a meaningful impact on how we manage our leverage and our liquidity going forward. We’ll follow the same format as we have on pervious calls. First, Lisa will run through our financial results.

Then Mark will discuss how the MBS market performed over the course of the quarter, how we positioned our portfolio and what our market outlook is. I will follow with some closing remarks before openings the floor to questions.

As a remainder, we have posted our third quarter earnings conference call presentation to our website, www.ellingtonfinancial.com. You can find it in three different places; the Homepage of the website, for our Shareholders page or the Presentations page. Lisa and Mark’s prepared remarks will track the presentation.

So if you have that presentation in front of you, please turn to page four to follow along. I’m going to turn it over to Lisa now..

Thank you, Larry. Good morning everyone. As shown on our earnings attribution table on page four of the presentation, our third quarter net income was $12.9 million or $0.46 per share. In the second quarter, our net income was $20.9 million or $0.81 per share.

Our income from both our non-agency and agency strategies declined in the third quarter, relative to the second. Within our non-agency strategies, legacy RMBS continued to be the biggest revenue generator, but profits from these holdings were lower quarter-over-quarter as the rally in that sector eased.

However, our credit hedges, which are currently mainly in the form of credit to full swap on high yield corporate industries, offset some of the declines as threads on high yield corporate credit widened during the quarter. Our interest hedges also generated net gain.

Together, non-agency RMBS, related credit hedges and interest rate hedges generated approximately $11 million or $0.39 cents per share of our total gross income of $15.9 million or $0.56 per share.

Our commercial strategy, including small balance distressed commercial loans and our preferred equity investments in the commercial real estate related private partnership, performed well, generating approximately $4.5 million or $0.16 per share.

Our CLO strategy added another $2.1 million or $0.08 cents per share and our residential non-performing and sub-performing loans contributed approximately $1.5 million or $0.05 per share. Our equity trading strategy had a net loss during the quarter of $2.3 million or $0.08 a share.

However, although the strategy generated a net loss during the third quarter on a year-to-date basis, its contribution was positive at approximately $1 million or $0.04 per share as of quarter end. Following the end of the third quarter, as of today at least, or yesterday at least, the third quarter loss has been offset by net gain.

During the quarter, we purchased our first non-legacy consumer ABS assets. And though they did not contribute significantly to our third quarter results, as we ramp up we expect this asset class to become a meaningful contributor to earnings. Our agency strategy generated a gross income of $3.8 million or $0.13 per share.

Agency pass-throughs are typically the primary driver of our income in this strategy, but during the quarter, our agency interest-only securities also performed well as prepayment levels remained relatively low.

During the quarter, we had a common net loss for our interest rate hedges in that strategy, which continued to principally be in the form of short TBAs and interest rate swaps.

At the third of the third quarter, our loan non-agency portfolio grew to $732 million, up from $670 million last quarter and our agency portfolio reached $1.1 billion as compared to $962 million as of the end of June.

For a little more detail on our non-agency portfolio, you can see the portfolio breakdown by sector on page 11 of the presentation, and on page 15 you can see the detail of our agency portfolio. In September we completed the follow on common share offering and successfully raised new capital.

The increase is in our non-agency and agency portfolios related to the deployment of these proceeds. We also paid down a portion of our non-agency repo debt. As a result of the offering, we expect that our expense ratio could decline approximately 20 basis points on an annualized basis.

Our leverage ratio, excluding repo debt on US treasuries, was 1.44:1 at the end of September. As we continue to purchase assets in some of our newer asset classes, which generally take longer to source and evaluate than MBS securities, our expectation is that our leverage ratio will increase.

Our cost of repo in the third quarter was essentially unchanged from the second quarter. In September we closed a $150 million non-mark-to-market repo facility that provides financing for certain types of non-agency assets with a term of two years. We are pleased to have entered into this facility as it provides added flexibility.

We are currently utilizing almost all of the facility and Larry will elaborate further on the significance of it in a little bit. I will now turn the presentation over to Mark..

Thanks Lisa. During the third quarter, the credit and interest environment was fairly benign. The yield curve continued to flatten in anticipation of a rate hike next year, but interest rate volatility was low. Credit spreads were more volatile.

High yield and some CMBS indices traded in a wide range, about 3.5 points as did some of the Fannie Mae and Freddie Mac credit risk transfer tranches. Generally speaking, credit spreads widened in the quarter.

Our own non-agency RMBS portfolio, the core driver of returns for EFC, has almost a decade of seasoning and holds mostly floating rates or adjustable rate bonds, so it experienced much lower price volatility.

The macro backdrop that impacted high yield in the season in the stock market was not precipitated by any change in housing or US consumer credit fundamentals.

Broadly speaking, the credit metrics that are most impactful to our portfolio, home price depreciation, borrower-default rates, and loss severities, all continued their positive trajectories for the quarter, albeit at a slower pace than last year.

The powerful force of home price depreciation and amortization of seasoned loans, have materially decreased the sensitivity of our non-agency portfolio to small change in home prices.

While we had slightly net reduced our non-agency position through the year, we were able to find selective buying opportunities during the mini market meltdown in July and early august, most notably in lower priced alt-A bonds.

There were no big changes in the composition of our non-agency portfolio during the third quarter, other than the continued measured diversification into some new areas that Larry will discuss. The portfolio grew during the last few weeks of the quarter, as we deployed proceeds from the capital raise.

One of the overarching themes for us is that some of the best investment opportunities now come in sectors where banks are exiting because they don’t want to take on the regulations or the asset is too capital intensive.

The flow of compelling opportunities from banks as they continue to adapt to the new regulatory regime is one of the primary reasons we raised capital during the third quarter, for example, residential non-performing loans with 3% of our non-agency portfolio as of September 30.

Since September 30, we bought a package of loans from a bank that is liquidating many of its legacy assets. For the package of non-performing loans and weak performing loans we bought, the bank was a highly motivated seller.

The bank sold the portfolio because these types of loans require a lot of capital reserves under Basel III, and they bring with them a lot of regularity scrutiny. With this dynamic, banks selling high yield assets for non-economic reasons, is the type of opportunity we really want to capture.

This is just one example of how our view that new regulation would yield strong deal flow is coming to fruition. We’ve been able to buy from this type of seller in virtually all the diverse markets that we now target in our non-agency loan portfolio. So our core non- agency portfolio continues to perform well.

It generates a lot of interest income and even though the level of trading activity is measured by portfolio turnover with lower than previous quarters, we had over $6 million in realized gains.

Both in terms of trading and longer term holdings, we are essentially getting paid to go where the banks can’t and won’t go, and we think we’ll continue to see a wide range of investment opportunities driven by increased regulation. In our agency RMBS portfolio, we had a very strong quarter.

However, the market as a whole didn’t perform well relative to hedges. So most of our return came from actively trading our portfolio and appreciation of pool pay ups. Last quarter I spoke about how cheap pre-payment protection has been. During the third quarter, pay ups increased despite the decline in mortgage bond prices.

Prepayments were stable during the quarter, but post quarter end rates have rallied and that has caused the spike in the refi index.

It is still unclear whether this is going to materialize into anything because rates are now off their lows, but I think some people were surprised to see how quickly the refi index popped up in response to a small decrease in mortgage rates. All this will create some interesting opportunities if rates stay low.

Additionally, with the Federal Reserve having concluded their net purchase of mortgages at the end of October, we expect to see improving opportunities in the agency MBS. Let’s look at hedges. Picking the right hedge really requires as much thought and insight as picking the right asset.

We spend a lot of time on it and have developed a lot of proprietary models to assist us.

Volatility in hedge crisis can also be a great source of trading opportunities and incremental returns for us and we made $2.7 million in our credit hedges for the third quarter as hedge gains were a meaningful contributor to our earnings in a relatively uneventful quarter.

A fair amount of macro volatility created some opportunities for us to trade our high heeled hedges. Midway through the quarter, the S&P had a sudden 4% drop. As I previously mentioned, high yield indices moved in a wide range of 3.5 points.

We opportunistically trade our credit hedges so this sort of price volatility is generally good for us as it creates trading opportunities. We closely monitor trends in mortgage credit in home prices.

There was no material change in those metrics within the quarter that would cause big changes in our cash flow expectations on our assets so this kind of volatility in hedge prices is particularly beneficial.

While we opportunistically generate gains from our hedges, first thing foremost our focus here is on preserving book value using both interest rates and credit hedges. On the interest rate side, we generally hedge the portfolios with a goal of being close to zero duration.

On the credit hedging side, our PTP structure enables us to use hedging strategies that traditional REITs can’t. REIT rules only allow for liability hedging, basically interest rate risk, but the PTP structure gives the flexibility to hedge assets, not just credit risk and spread risk as well.

While we generally hedge some of our credit risk, we do leave some of it on where we believe we have an edge or expertise, or we feel we’re getting well compensated for the risk. As we saw this quarter, these credit hedges can be a great source of return in addition to stability.

Looking forward, we think the portfolio well hedged for a potential rise in rates and that we are prepared for volatility. We are also excited about the opportunities from now until year end. It's typically a time when many investors close their books. That’s certainly not the case with us.

We have capital to deploy and we plan to use it opportunistically to capitalize on any year end selling pressures. With that, I’ll turn the call back to Larry..

Thanks Mark. As Mark mentioned, we continue to find attractive investments in select pockets of the non-agency RMBS market. Our non-agency RMBS holdings still represent the largest sector allocation in our portfolio and that will likely be the case for some time.

However, we are making excellent progress on diversifying our sources of return and broadening our investment opportunity set. We’ve continued to strategically expand into adjacent sectors of structured products, where we believe we can leverage our expertise and analytical capabilities to achieve attractive, risk adjusted returns.

You shouldn’t expect to see a dramatic change in the composition of our portfolio in a single quarter, but we are positioning ourselves to access additional sources of return.

Our target sectors are ones in which our researching systems, which have distinguished Ellington since day one, give us an advantage and enable us to capitalize on inefficiencies. More specifically, we believe that granular data analytics and loan level modelling, give us competitive advantages in many of these sectors.

Leveraging these core competencies, we’ve been extremely pleased with our investments in CMBS, including B-pieces, CLOs distressed small balance commercial mortgages loans, residential NPLs and European MBS and ABS. In fact, Europe is a great example of the kind of adjacency and competitive advantages we are looking for.

Loan level data for UK RMBS has become more and more available. And so we’ve used our U.S non-agency models and research and analytical tools to build similar models and research and analytical tools for the UK market.

In other European markets where we see opportunities such as Spain, the data availability is not as good, but that’s okay because the markets inefficiencies are that much greater. With the help of these tools, our team in Europe is ramping up and sourcing a number of opportunities.

The majority of our European holdings are still legacy RMBS, but we are all so actively pursuing non-security opportunities, such us distressed loan pools like that Spanish consumer NPL pool that we bought during the third quarter. In the third quarter, European MBS and ABS spreads tightened in anticipation of possible ECB quantitative easing.

We exited and rotated some positions during the third quarter, which is why it looks a little smaller as percentage of the portfolio as of Septembers 30. However, as you know, European banks still have a long way to go to clean up their balance sheets and when they sell assets, they tend to do it in a dramatic way.

So just one large transaction could have a meaningful impact on our portfolio. Another notable adjacent sector for us is the consumer ABS space. Will Messmore has been leveraging his relationships and has already put money to work for us.

He made his first investments during the third quarter and he has a healthy pipeline of fourth quarter opportunities shaping up. In all these markets, we believe that we have the competitive advantages and resources to help us execute.

Being active in so many different sectors, we have the ability to be much more opportunistic with our capital allocation and that’s another reason why we keep our leverage low and our liquidity high.

We don’t know which of these areas will be the most fruitful or will present a sudden buying opportunity, but whichever it we believe that we’ll be ready. This was one of the main motivating factors for our early September follow-on common share offering. Just as importantly, we raised the $198 million of net proceeds right around book value all in.

It was essential non-dilutive to existing shareholders. We believe the bigger capital base will lower our expense ratio by 20 basis points. Finally, the offering has already produced another benefit. Namely, it has improved the liquidity of our stock dramatically.

Our average daily trading volume is now running about 250,000 shares a day, which is more than two and a half times the 95,000 share average daily trading volume for the six months leading up to the offering. And after two months after completing the offering, we’ve deployed the vast majority of the proceeds.

Now I'd like to close with a discussion of that new financing facility that we established in the third quarter. First, it's a non-agency borrowing facility. It has a minimum two year term, but after one and a half years it converts into a rolling six months facility. We always get at least six months’ notice if a lender decides not to roll.

However, the most important feature is that it's a non-mark-to-market facility. We post the initial haircut when we’ve financed the investment and we never have to post any additional cash or margin after that, even if the market crashes.

Why is this so significant for us? One of the main reasons that we’ve kept our leverage low at Ellington Financial is that we are acutely aware of the dangers of overleveraging in a market crisis.

The founders of Ellington have seen firsthand, both on the sale-side end at Ellington, what happens in a financial crisis such as 1994, 1998 and of course 2008 when lenders don’t roll repo financing. We’ve witnessed the dangerous of leveraging too much and we’ve benefited from the buying opportunities in the wake of these financial crisis.

We don’t want to be selling into these crises when prices drop. We want to be buying. Because of that, we long ago adopted and we continue to refine what we think are robust and well thought out liquidity risk management processes.

And that’s the main reason why we have kept our leverage low relative to our mortgage REIT peers and kept our liquidity in the form of cash and/or unencumbered agency pools high relative to our peers.

For the portion of our non-agency portfolio that is financed with typical repo with mark-to-market margining, we’ve typically used at most one full turn of leverage, even though the repo haircut terms would allow two full turns of leverage or more. But our new non-mark to market facility is different.

Now, its haircut is comparable to our mark-to-market repo financing alternatives. However, we are paying around 50 to 60 basis points more for the non-mark-to-market feature. Why is that worth it? Here’s the math. By not having to worry about margin calls, we free up all that low yielding cash that our liquidity management systems don’t let us deploy.

On the assets that are in this new facility, we get to use almost a full turn of leverage more. And if you look at our net interest margin, I’m sure you’d agree that extra NIM, more than compensates for the slightly higher cost of the facility.

Now, re-REMICs are in some ways a similar technology that others have used in the past, but in a re-REMICs you lock up your assets. You lose the flexibility to actively trade, which as you know we think is worth a lot.

Here, just like in the repo market, with this new facility, as long as the lender okays the substitution, we can substitute collateral freely and trade freely. As Lisa mentioned, we’ve already just about filled up this line.

At $150 million, this line in and of itself won’t be transformational, but we are hopeful that this represents the wave of the future for us. Obviously, our permanent capital and reputation as conservative risk managers plays a big part in our abilities to secure financing lines like this one. This concludes our prepared remarks.

We are now pleased to take your questions. .

The floor is now open for your questions. (Operator instructions) Your first question is coming from the line of Steve Delaney with JMP Securities..

Larry, congratulations on that facility. That is unique and an exciting development..

Thanks Steve..

Obviously, look, you guys have been such strong performers and so consistent that any time you get any kind of a blip in a quarter, it's bound to raise questions. Nobody doubts the ability of the managers. Just wondering what was going on behind the scenes. And Mark, thanks. You did a great job with telling us what was happening within credit.

A couple of questions around the change, the move from $0.80 kind of quarter that you've had earlier this year to this $0.46. The offering certainly had to have some impact. And our back of the envelope looks like that that may have cost you $0.04 to $0.05 with respect to higher share count for a portion of the quarter.

I was curious if you -- internally you guys have come up with a number similar to that..

I don’t think that’s reasonable. The proceeds came in in the early part of September..

We were just assuming no material earnings benefit and just looking at the incremental additional shares. It looked like about a 10% impact on a per-share. But obviously --..

Right, yes that makes sense. You’re talking about a third of a quarter and a third of the capital..

36% new shares, bingo. Yeah, exactly. So obviously, the bigger impact was within the portfolio. And just looking at your slide on page 4, and I'm trying to frame this, Larry to focus in on what the big thing was. I'm not trying to be micro or anything.

But when we look at the change in 2Q to 3Q on your gains on credit, both realized and unrealized, that was like a minus $15 million delta and your hedges were a plus $6 million delta. Well, we're looking at that and saying, okay, the long side obviously underperformed.

The hedges helped a little bit, but that $9-million swing, that right there is 30-some cents of earnings.

And I'm sure there's other things that are a few pennies here and there, but as I'm looking at the quarter I think it just tells me that the credit-spread volatility that we saw in this quarter relative to earlier in the year is really the challenge that you faced.

And I guess I'm just asking if that thought process of mine is similar to what you guys were thinking during the quarter and as you looked at the results..

I think there’s a few things going on. Because we’ve actively traded in the past, I think and I know you’d agree, it’s tougher to just do the math on us.

We realize that and what’s going to happen is that there are going to be quarters like this where we trade a little less actively than others and there could be a lot of reasons for that, both good and bad. And I think that we had a little less trading than we normally do and I think you saw that in our results.

I don’t think that’s necessarily indicative of what we are going to see going forward. I just think it’s one of those things. We had summer months. I mean there’s just a lot of things going on. We’ve always -- our leverage obviously has been lower than our peers.

If you have ever done the math on our run rate, you’d never obviously get close to what our quarter-to-quarter earnings are.

We realize that makes us a little bit tougher to model from an analyst perspective or maybe even an investors perspective, but you are going to see some quarters where we have fewer trading gains and others where we have more and it’s really impossible going in to predict.

I will tell you and I’ll let Mark elaborate on this, with all the different sectors that we are involved in and what we are seeing with banks exiting certain markets, we are still very optimistic about our opportunities going forward..

Steve, it’s Mark. I would just add that when you get a lot of macro-volatility in the market, S&P moving around a lot, credit indices moving around a lot, it flows down a little bit sometimes. The volume of cash bonds that trade, the (inaudible) bonds that trade.

I think that was part of the reason why the turnover was a little bit lower for the quarter. When I look at all the areas we are in and then all the opportunities in those areas, it looks like a very opportunity rich environment for us. I see probably more opportunities for us to pursue now than I did at the start of the year..

Well, that's great timing to have that view with the incremental capital and the credit facility. I guess switching over to the portfolio -- and one more thing about just the quarter, we should be seeing your October 31 book value I guess any day now.

Can you make any comments -- the volatility that you had in the third quarter, seems like bonds have generally settled into a range here.

Would you say the conditions since September 30 are generally more favorable to the way that you would normally operate?.

Just from a book value perspective?.

Yes, exactly, or in terms of the price -- the 3.5% price range that you saw in 3Q.

Have you seen prices tighter since September?.

I think a little bit..

Okay..

Obviously October started -- first few weeks in October were very volatile to the downside and then to the upside. There was ….

I guess you're right. It's only been the last couple of weeks only that we've seen some stability in rates. But switching away from that to just more big-picture, one of these and then I'll hop off. I'm looking at incrementally -- it takes a while now to read through, especially on the credit side the different paragraphs of all the new initiatives.

And I guess, as I look at this I was trying to think through it last night like okay, what are you guys really trying to do here? And I came up -- you mentioned it in your comments, I came up with this thought of targeting inefficient markets or less liquid markets, such that you're now looking at investing in more of an incremental approach rather than some kind of macro theme.

And I was curious if you would comment if that really is what you're really trying to focus on..

This is Mark. I think about it as one theme for us is buy assets or focus on businesses that banks want to sell as opposed to banks want to buy. That’s why we’ve been thinking a lot about non-QM lending. We are not focused on the jumbo space where the banks want to be active.

We are much more focused on parts of that market where the banks aren’t going to want to go. I mentioned we bought this package of non-performing and re-performing loans from a bank that was liquidating legacy assets. We did that post quarter end.

That’s an example of buying the assets the banks are selling en masse and not trying not to focus on the assets that the banks are aggressively looking to buy because their funding is low. I would say that’s one theme for us. In terms of liquidity, we are not targeting things that are less liquid by nature.

I think we are trying to target markets where we feel like they are underserved from a capital perspective. So markets where there hasn’t been a lot of capital. We’ve liked for a long time the distressed commercial mortgage loans. That has been an underserved -- there hasn’t been a lot of capital there.

There has been a lot of capital for big trophy properties. That’s not what we are interested in. There has also been capital for smaller properties, but there hasn’t been a lot of capital for distressed loans on smaller properties and that’s been a great niche for us. It's not super competitive. The returns are great. We can get quick resolutions.

We think we have limited downside. I would say targeting things that the banks want to sell as opposed to things the banks want to buy and targeting corners of the market where we don’t think there is a lot of institutional capital amassed relative to the opportunity..

Very helpful. Thanks Mark. I appreciate the --..

Larry Penn:.

:.

Guys that's very helpful, appreciate the comments..

(Operator Instructions) You do have a question that came in from the line of Lucy Webster with Compass Point. .

Good morning. It's Jason for Lucy. A question on the agency portfolio. It looks like you added a little bit in the low-FICO specified pool bucket. But I'm just looking at the CPR increase and wondering if that was mainly due to the addition or if there's some underlying trends going on here. .

This is Mark. So this quarter was the highest quarter for prepayments from a seasonal basis. So it was a big seasonality to prepayment. Between mid-summer to the winter, it's typically like almost like a doubling peak to trough. We haven’t seen anything surprising us on the prepayments -- on our portfolio for the quarter.

I would say I think the most interesting thing with prepayments occurred post quarter end when you had that drop in interest rates, lowering of mortgage rates and you saw a very quick and sudden change in the refi index spiked up a lot.

And when people drilled down on that change in the refi index, it really was coming from a larger loan balance of loans that are in there. That is sort of behind some of the increase in the value of prepayment protection. So I think that was sort of the most interesting thing that really occurred at the end of the quarter.

I think what you saw going on in the quarter was primarily just seasonality, especially when you’re at very low levels of prepayments where we are. So our prepayments went from basically five up to about eight on three months basis. That’s just seasonal turnover changes, the cyclical pattern throughout the year..

Okay. And then in the MHA portfolio, just curious to get your thoughts on how those are positioned, especially if we start to see lower LLPAs or we perhaps get some credit widening at the GSEs. Thanks. .

Yeah. I think on the MHA portfolio, we have focused more on the higher LTV sectors, over 100 LTV. We’ve been very sensitive to modest amounts of home price depreciation can degrade the quality of prepayment protections for the lower LTV MHA stories there like the 80 to 90 story.

I think we need to -- it's hard to make any specific comments on what changes we are going to see out of FHFA. Mel Watt made some comments, but we haven’t seen the specifics there about some of these high LTV programs and changes in reps and warrants. I think it's interesting, I don’t think that it’s going to be very impactful on the MHA speeds.

I think the MHA speeds are going to be more impacted by the rate of home price appreciations. But I do think some of the changes you might see out of FHA could -- they could promote some more first time home buying which could be supportive of home prices.

There are further questions at this time. Ladies and gentlemen, this concludes Ellington Financial’s third quarter 2014 financial results conference call. Please disconnect your lines at this time and have a wonderful day..