Good morning and welcome to the New Residential Second Quarter 2020 Earnings Conference Call. All participants will be in listen-only mode. Please note that this event is being recorded. I would now like to turn the conference over to Kaitlyn Mauritz with Investor Relations. Please go ahead..

Great. Thank you, Jason and good morning everyone. I would like to welcome you today to New Residential’s second quarter 2020 earnings call and thank you all for joining us.

Joining me here today are Michael Nierenberg, our Chairman, CEO and President; Nick Santoro, our Chief Financial Officer and Jack Navarro, President and CEO of the Servicing division of NewRez; and Andrew Miller who runs our MSR portfolio..

Thanks, Kate. Good morning, everyone and thanks for joining us. As we continue our recovery from the early days of COVID-19, I am happy to report that we have made great progress on many fronts. We have more cash in our balance sheet today than ever before.

We closed the quarter with over $1 billion of cash and liquidity and the company has never been better capitalized. We termed out and reduced our daily mark-to-market exposure of our investment portfolio. 95% of our investment portfolio away from agency mortgage-backed securities are non-daily mark-to-market or has a mark-to-market holiday.

We made sure we have a surplus of capital to handle any additional amounts of advanced financing if needed. So far to-date, our advanced needs have not increased at all. In fact, due to prepays and better performance, we have actually had a net positive result in advances, which have required less cash and actually positive cash for our company.

We grew book and we will continue to focus on earnings and book value growth in both our investment portfolios and our operating business. The earnings power of our mortgage company is one that has plenty of room to grow and I feel that we have only scratched its surface. When we acquired NewRez in 2018, the company made $38 million in pre-tax income.

Along the way, we acquired the assets of Ditech, which are now fully integrated and expect the company to make upwards of $800 million in 2020. The company today has over 5,500 employees and is an important player in the mortgage ecosystem..

We will now begin the question-and-answer session. The first question comes from Doug Harter from Credit Suisse. Please go ahead..

Thanks.

Michael, talking about that illustrative example of deploying cash, can you give us a sense as to kind of what that timeframe might be for deploying cash? And I know you said you didn’t like kind of securities right now, but what assets would you want to deploy into?.

So, as we think about the cash deployment, the one thing I would say is during the quarter as we came out of Q1, we reduced our agency positions to next to nothing. During the quarter, we have added about $6 billion to $7 billion of agency mortgages. As we get through the quarter, we will likely deploy more capital into agency mortgages.

The one caveat I would add is Fannie 2.5s are trading $1.045 to $1.05 prices. At some point, I do think rates are going to go up. And we need to be mindful of that in how we think about the agency business versus our MSR business. So when we, pre-COVID, we had agency mortgages against our MSRs. Today, we have agency mortgages against our MSRs.

However, the difference today is pricing in MSRs is much, much lower. So, I think cash deployment will likely come in the form of agency mortgages.

Right now, I don't – we don't see a lot of value in many other things that we would want to deploy capital in, and it’s very likely that we will sit with more cash on our balance sheet today than we have in recent past..

And then also I guess how do you consider share repurchase in that equation given the discount to book that you currently trade at?.

It’s – I would say anything and everything is on the table as we think about driving our share price higher. And getting back to, again, my opening remarks of double-digit, a double-digit stock price, book value we think is understated. We put that slide in there, closed the quarter at $10.77.

When -- if you think about it this way, if amortization really slows down at some point in the mortgage company, let’s say does less volume, a one churn on our MSR portfolio is worth about $1.5 billion of $4 in book value.

So, if you think about it today, $10.77 even if the mortgage company broke even and the MSR value was a four multiple instead of a three multiple, you are talking about roughly $4 a share in book value or something close to $15 versus approximately an $8 stock price. So, we think there is lot of room to grow.

And we – our theme and my theme is truly the road to recovery. It bothers us tremendously that we are trading where we are. Our customers or the capital that’s allocated to us, we have a fiduciary responsibility to drive high returns for our shareholders, and we are going to continue to do that. So, whatever we need to do there, we are going to do..

Great. Thank you, Michael..

The next question comes from Bose George from KBW. Please go ahead..

Thanks. Good morning. Actually, just to follow-up on Doug’s question in terms of capital or cash liquidity use, you have the high cost debt that you guys took out and which is pre-payable at any time.

What are your thoughts about paying some of that back?.

So, there are a couple of things. One is we are going to carry higher cash and reserves today than we have right until the world normalizes. As we think about the cost of capital, the loan itself is an 11% coupon. If we were to raise equity, barring the warrants that were issued along with that loan, so separate the warrants for a second.

If we were to raise capital going back to historical dividend yields, our dividend yield would be something around 12%. So, the loan itself at 11%, yes, high cost capital, but at some point, we will likely refinance that with something else.

So, what are our options? One is there is unsecured debt as those markets continue to tighten, it’s something that we look at daily, but we will carry more capital on our balance sheet.

I am not going to – we are not going to just go out and do this term loan and then turn around and pay it back a month later, because we think the world is safe, because we just don't know. So in general, we are going to carry more cash. We are not going to payback the loan today.

And we are going to use – we are going to do whatever we can to drive our share price higher..

Okay. Makes sense. And switching over to mortgage volumes, you guys guided to $45 billion to $50 billion for the year, what was the run-rate in June. You noted that the volume was little lower this quarter because of April.

Just curious, is the June volumes suggesting a run-rate that kind of gets you to that $25 billion to $30 billion for the back half of the year?.

Yes. So, on April was lower, March was – we pulled back in March obviously as we got out of non-QM, for example and pulled back on some of our – on our channels. So, March and April were a little bit lower. June is going to be a little bit under $4 billion.

I think it was where the number came out, and July volumes are robust, and we think that’s going to continue. So, the one thing I want to be clear about is it’s not about doing $40 billion or $50 billion, it’s about how much money we can make for shareholders. And I think that’s the most important thing, but June was a little bit under $4 billion..

Okay. And the gain on sale margins in July remain similarly elevated..

Yes, they are very robust. I would say the – we’re starting to see a little bit of tightening on the corresponding side, but the direct-to-consumer, the third-party originated stuff, our JV business very, very robust margins..

Okay, great. Thanks..

Thanks, Bose..

The next question comes from Stephen Laws from Raymond James. Please go ahead..

Kind of following-up on Doug and Bose’s question, but just still want to gain on sale margin clearly much higher for the direct-to-consumer, from your slides.

Can you talk about what’s driving the increase in volume there, what initiatives and efforts have you guys made and what have you had to do that can continue to drive that mix higher to increase the blended mix across the origination platform?.

Good morning, Stephen. So, on the direct-to-consumer side, if you think about it, again, we have roughly 4 million customers. We need to be able to retain all these customers with the amount of incoming phone calls we have and the amount of personnel we have in the company today, which is far greater than the amount of personnel we have ever had.

We think we are going to do a better job. The relationship with Salesforce that was announced is something that we think is going to help us with that process. Things are going to be much more automated and the process will be much more seamless than a so-called manual process via the telephone. We have a lot of work to do.

We are very focused on our marketing efforts. We are going to hire a new Chief Marketing Officer in the markets now working on that higher. We need to do a better job on our web portals. We need to do a better job.

This overall, we do a good job now, volumes are elevated, processing loans and not only for us for the industry and this is why you are seeing such robust margins on some of these channels. It’s not the easiest thing based on the volumes.

I saw this morning Fannie Mae came out and announced that they think there is going to be $3 trillion of mortgage production this year. So, high volumes for us, better service for our customers, more automations, more affiliate relationships like the ones we announced with Salesforce.

And I think the combination of all of those should enable us to get to a much better place and do more in the direct-to-consumer channel and retain more customers..

Great. And this maybe is a little more on the macro side that ties into to your origination business as you narrowed the products, you mentioned that kind of moving away from non-QM. Since that decision you have seen the government announced the QM Patch will be extended. There is talk you could even take them up to 48% on DTI.

How does that change origination channel? Are you looking at stuff outside the non-QM or is this QM Patch is going to expand things to really cover everything you want to do? And then around that think about the upcoming election and recent ruling by the Supreme Court that could end up impacting the FHFA as far as who runs that being a Presidential appointee? Can you talk about any positives or negatives that either you could benefit or hurt you guys as you think about the changes taking place in the…..

So, on – from a macro perspective, on the geopolitical side, I can’t help anybody there. We don’t have any control on what’s going to happen with CFPB and FHFA and what we need to do is continue to perform for our customers and continue to do what we need to do there.

I don’t know, when you think about the patch in non-QM, we are in the money-making business. Our mortgage company, as I pointed out earlier, has a lot of room to grow. We pulled back a non-QM when, quite frankly, there was no liquidity in the markets. We pulled back on the agency mortgages when there was no liquidity in the market.

So that’s what put us in this position that, then that we are in – we are in a much better spot today probably better than ever, but that’s what put us in this position. So I think we will focus where we can on things that we – that makes sense. The agency business is something that makes a lot of sense now. We are evaluating the non-QM business again.

It’s not something that we are going to just jump back in unless we think we have robust gains. Similar to my earlier comments that we have $77 billion in call rights, there is some of those deals are in the money, but we are not going to call them until we think they make a lot of sense.

So we will be strategic around it, but I think the focus is going to continue on the origination side it will continue to be on the agency side..

Great. And lastly, on the forbearance down I think 60 basis points, if I remember the numbers from the slide deck to high 7%.

Kind of your outlook there, your risk bull and bear case around that number kind of how do you think about it under the table showed you guys pulled down kind of some forecasts from a worst case scenario, but do you think the forbearance risk is bigger in the near-term or is it more from a bigger economic slowdown in 2021?.

I have some thoughts but Jack Navarro, who is my partner and our partner is on the phone. The CARES Act, I mean, if you are going to get another bill that could be helpful, I think to homeowners.

We really don’t know at this point, but Jack, anything you want to add from a commentary standpoint?.

Yes, Michael. I would just say that there is two very sort of significant ways that we are thinking about today. One is the very clear and direct trends on the portfolio that we have today and that is basically that the number for forbearing new forbearance requests has come down significantly on a daily basis.

There still are some, but they have come down significantly and the number of people who have said their hardship is over and they are ready to move to a permanent solution have increased and the overall number of forbearances has gone down. So, those trends are pretty clear. You see them in the advances you mentioned that earlier.

But the other thing I might add is that we will see the special and again not – I am not an economist and I am not trying to talk like one, but we will see the special unemployment insurance expire in July and we obviously see an increase in sort of COVID activity around the country.

So we will have to – we are going to have to see how those things play out. And we are trying to just be very vigilant across the enterprise at Michael’s direction on these issues. And we are sort of the head of the sphere on the servicing operation, but there is no indication today that these trends are – the positive trends are going to change.

That’s what we are living with today..

Great. Appreciate that color, Michael, Jack. Thank you..

Thanks, David..

The next question comes from Kevin Parker from Piper Sandler. Please go ahead..

Thank you. So Michael, can you give us an idea of what your numbers look like for direct-to-consumer originations in the month of June and then how that’s progressing through the month of July.

I just want to reference back to your estimates for $6 billion of direct-to-consumer originations in the fourth quarter is approximately a double from what you are doing right now in the second quarter?.

What is it?.

Yes, I just want to understand the exit rate in the trajectory?.

Yes, June we did $1.2 billion. So when we are talking about in the fourth quarter as we get better around that channel and recapture, we think the fourth quarter numbers of whether it’s $4 billion or $6 billion, we think those numbers are real and we think we are going to be able to hit them..

So what do you think you are going to put – if you did one 1.2 in June, where do you think that’s going to end up in July? Is that going to be north of 1.5 or are you close to that run-rate already?.

We think we are going to be about – our target is to be at $2 billion by September..

Okay.

And then what gives you confidence that you are going to be able to hit that number? Is it that there is continued refi demand at the levels that we saw in the second quarter or is there specific recapture rates that are going to jump because of marketing programs or different targeting programs that you are doing?.

It’s a little bit of everything. We got – we will be – I think will be better around our lead conversion. We have added some – we have changed some of our leadership quite frankly in the origination business. Baron Silverstein joined us as President, working alongside Bruce and Jack. There is – we are going to be better. We need to be better.

I mean, you hear me say that every time we talk about the company, we make a lot of money in the company, but again, I think we are only scratching the surface whether we do $2 billion or $3 billion, I know from an analyst standpoint, you are looking to fine-tune the estimates. It’s hard for us to tell.

If the refi market goes away and the purchase market goes away, your MSR multiple would go from a three multiple to a four multiple, we will make an extra $1.5 billion. Our book value will be 15.

None of us have a crystal ball, but the way that we think there is a lot of offsets to the profitability we are seeing in the mortgage company, if the mortgage company stays where it is, you will continue to see higher levels of amortization on our MSR portfolio, but we are really happy originating mortgages and keeping the MSRs at today’s valuations..

Okay. And then going back to Slide 6, you are estimating that approximately $4, $5 of additional value or little over $4 of additional value from the origination franchise.

But the market typically puts very little multiple on those types of earnings, just given the volatility associated with it and what we have seen out there, but it seems like your comps are improving significantly.

Do you think it – do you think you will eventually get credit for that $4 in book value in the market or do you feel like it’s – it might be better as a separate entity?.

It’s a great question, Kevin. I think for us we will, NewRez needs to standalone by itself. I mean, if there is a way to create more shareholder value, we will always look to do that.

So whether it’s a three multiple or two multiple, if you look where Penny trades or if you look where Cooper trades and think about those companies, I don’t know that we are there yet. But at some point, I think we will get higher multiples for these businesses that continue to make money.

To your point on the origination side, you typically don’t get the same valuations, because it’s a much more volatile earnings stream. But again, the offset to our $4 is $4 in gain on our MSR portfolio that we marked down north of $1 billion over the course of the past few quarters.

So, I like the way we are positioned, I like I love the valuations where some of these things are. I think they are extremely attractive. The crystal ball today for any of us, I think is a very, very foggy one, because none of us know what’s going to happen.

And again, going back to Stephen’s question, whether you get another bit, whether you get more money into the system from another bill, when the CARES Act ends at the end of this month, I mean, it all remains to be seen, how this whole this is going to play out. That’s why we are carrying a lot more cash today..

Alright. Thank you for taking my questions..

Thanks..

The next question comes from Henry Coffey from Wedbush. Please go ahead..

Good morning, everyone and thank you for taking my question.

Mike, is it an oversimplification to say that you have got basically two businesses, an investment business, where you are going to be focused mainly on agency and keeping our eye open for opportunities? And then the origination servicing business, where you see a lot of growth and that business is you are going to keep pouring capital into that business.

Is that the simplest way to think about it?.

Yes and no, Henry. We have a $600 billion MSR portfolio. When we acquired, NewRez, over the years, we have actually – we have had some very good acquisitions, right. We did the HLSS deal in 2015. We developed a very good partnership with Ocwen. We did the deal with New Penn NewRez in 2018. We did Ditech in 2019.

All of these were strategic around MSRs advances. As we got more into the operating business, however, that operating business is there to support our portfolios.

When you look at our credit portfolio on the non-agency side, I got to find in my notes, but at a large amount of our credit portfolio from our issuance is serviced by Shellpoint and NewRez that we take a lot of comfort in because again Jack and his team do a great job around the servicing side of that business.

So, the – while it’s a standalone business, it does support our investment portfolio. My main thing around our investment portfolio today is we are not going to go out and just deploy capital to 5% levered return, it just doesn’t make sense, right for our cost of capital.

Then Kevin, somebody asked, whether it’s Bose before about, the loan – the term loan deploying capital out of 5%, when you are paying an 11% coupon on your debt doesn’t make a lot of sense. We will lower that cost of debt and pay that off.

I think over the course of the next whatever 6 to 12 months once we have a clearer picture of the world, but they do standalone, but they do work together. I think it’s the best way to think of it..

And then I – you talked a little bit about mods, last time there has been some discussion in the press, but no verification from anyone that as we get to the tail end of this whole forbearance equation that we will get something, HAMP or HARP 2.0 nowhere, some form of streamlined refinance, so someone who has been in forbearance for 3 to 12 months can then get out there and take advantage of really low interest rates.

And obviously, it would be good for the borrower it would be good for the economics of the mortgage and it would be good for you.

I don’t know who loses, but is that a reality or is that just some discussion in the press?.

It’s nothing that I am aware of today. Would it be surprising? The answer is no. When you think about the origination world today, it’s alive, it’s well, it’s robust. Yes, processing times take a little bit longer because of the sheer volumes that everybody is seeing.

And with the Fed buying all these mortgages, I am not sure that they need to do anything more than that, but I just don’t know. But I think anything – everything is on the table right now, depends what happens down the road..

Great. And thanks for answering my questions and congrats on a great quarter..

We will. Thank you..

The next question comes from Trevor Cranston from JMP Securities. Please go ahead..

Hey, thanks.

One more follow-up in terms of capital deployment opportunities, can you talk about what you are seeing in the third-party MSR market whether it’s flow or bulk? And if you see that as somewhere you could potentially be looking to deploy capital given how low servicing multiples are today or if you guys are primarily just focused on retaining what you can generate through the origination business right now? Thanks..

I think it’s twofold. One is we are not seeing a lot of MSRs come to market in the bulk market. The one thing I would say is we have been – we have acquired a few large packages of bulk MSRs over the course of the past couple of years. Mortgage banking and mortgage bankers are in the business to originate mortgage loans and refinance mortgage loans.

So, unless we are able to acquire these assets, I think at levels below where we would originate them ourselves, we are not going to be that axe there again, unless they are cheaper than where we think we could originate, because we are going to continue to focus on our own origination business.

While saying that, two multiples on two handles and low 3s on agency MSRs and private label MSRs are very, very attractive, but I just think that one thing to note is mortgage bankers will continue to refinance loans they create and there is no reason for us to jump in that pool again, we have learned quite frankly, unless this stuff gets much cheaper..

Okay, got it. That’s helpful.

And then in terms of the change in the fair value of the MSR this quarter, can you give us a split in terms of how much of that was due to realized payoffs this quarter versus the interchange and expected prepays and change in market multiples going forward?.

It’s a little bit of everything. What I would say is we have increased our speeds, our speed assumptions for down the road.

One is we have lowered some of the recapture rates on certain assets we have in our portfolio and then multiples when we look at conventional multiples and we looked at Ginnie multiples, our conventional – our conventional business is much larger than our Ginnie business. Ginnie multiples, the way that where we are – are in the mid 2s.

On the conventional side, we are in the very low 3. So overall we are like a 3 multiple, which is again some of the lowest levels we have seen in many, many years. So, we love where we sit there. I don’t know that amortization is going to slow down anytime soon, because we are in this robust housing market and robust refi market.

That’s where we are going to capitalize on the origination side. But when that does slow down, we think that the MSR stuff is going to go up a fair amount. That’s why we are excited to create it where we are right now..

Okay, appreciate the comments. Thank you..

Thank you..

The next question comes from Giuliano Bologna from BTIG. Please go ahead..

Good morning and congratulations on a great quarter. I guess jumping on the origination side to fine-tune that we will have some of the questions that have been asked before.

I was just curious what kind of margins you are generating on the direct-to-consumer side of the platform versus kind of JV retailing and some of your – and some of the correspondent as well.

Just to try and get a sense of where the margin is coming from and how much of a difference there is from DTC?.

On the direct-to-consumer side, we are seeing gain on sale margins at roughly 400 basis points. These are gross numbers. On the retail side, they are even higher than that. They are in give or take 500 basis points.

This is why the point that we continue to hammer home is that we need to get better in that direct-to-consumer channel, because not only is it going to help us retain our customers, it’s going to drive a lot more earnings through our – through the system for shareholders.

On the correspondence side, you have seen a tightening of spreads there you are starting to see MSR multiples increase versus where we were at the end of Q2. And as a result, you are probably give or take in the 25ish basis point range.

I think during the tough times we saw in March and April under COVID-19, I think we saw highs of give or take 60 odd basis points. The net number on the correspondence stuff is probably, give or take 25 basis points right now..

That makes a lot of sense. And then kind of thinking as we go forward, obviously, lot of loans come up forbearance, you have already had a lot of contacts with those customers as they come off.

Is that part of the strategy in terms of growing your direct-to-consumer margin once people kind of re-perform for a few months that you can go out and hopefully recapture that refinance or are you trying to find you, is it just more portfolio-wide recapture that will drive the volume this year?.

I think it’s more portfolio-wide. I mean people that are in forbearance will work with and provide mods and other solutions to help them stay in their homes, but the broader portfolio is where we are focused..

That makes sense. And one last quick one on thinking about kind of how you are hedging out the portfolio as a whole, obviously, MSR values are close to at some of the lowest levels we have seen in the long time.

But do you have any kind of hedging to rates moving lower or you – and how are your hedges in terms of rates moving higher or you are kind of leaving that optionality open at this point?.

We are doing both. We have agency mortgages, which hedge your MSR business. We have north of $6 billion of agency mortgages against our MSRs today. We are monitoring rates at the end of March, 3/31 the 10-year Treasury was 66 basis points. Today, it’s about 60 basis points. So it’s essentially unchanged.

I think the difference what we are seeing today versus the end of March was that the mortgage basis has tightened. So rates have done nothing, but the mortgage basis has tightened, because the Fed continues to buy a lot of mortgages.

But we will continue to monitor in a higher – in a lower rate environment at some point, for example, Fannie 2.5s are only going to go up so much more than where they are right now just from an absolute return perspective for our fixed income investors. So we are monitoring both ways.

We are probably more biased to think rates are going to go higher at some point. I don’t think it’s necessarily today. But we are – I think we are protected both ways.

The other thing to point out is we are – we do have a loan and bond portfolio that have duration, we have agency mortgages, we have loans, we have bonds, but at an overall three multiple on MSRs, we think there is less risk there today than there was obviously a couple of quarters ago..

That’s great. I really appreciate it. And I will jump back into queue. Thank you..

Thank you..

The next question comes from Tim Hayes from B. Riley FBR. Please go ahead..

Hey, good morning, Mike. Hope you are doing well.

First question, can you just talk about your off balance sheet investments in operating companies a bit more how those companies have been performing recently? And then I think I posed this question last quarter, but at what point do you think it makes sense to internalize these investments and further bolster the on-balance sheet operating company?.

So, on the – what I would call the off balance sheet stuff, Avenue 365 and East Street which are a title and appraisal company. They are and have been part of the ShellPoint NewRez family. There has been no change there.

As we do more volume there, obviously the appraisal business will grow, the title business will grow and the overall earnings from those businesses will grow. The third-party where we have made other acquisitions, Guardian, where I think the upfront payment was between $6 million and $7 million total with earn-out is about $25 million.

That’s going to make between $20 million and $25 million of EBITDA this year. They are in the property prints business obviously with foreclosure moratoriums and REO moratoriums out there. The earnings will be impacted negatively.

But if you think about it, overall total purchase price give or take $25 million and $20 million to $25 million of EBITDA this year in light of the foreclosure moratoriums, it’s been a great investment and the guys have run that do a great job. Covius, we have $64 million into that. That’s $20 million of equity. There is $44 million of debt.

They have been impacted again by similar things as Guardian has. They provide a broad suite of what I would call tech-enabled solutions to originators and servicers, obviously, a little bit harder to get out there from a travel perspective and create more from a sales standpoint and drive more revenue.

But that company should do between $20 million and $30 million of EBITDA this year. So, all-in-all, those three business, it’s really two off balance sheet businesses for the most part should continue to do fine. We will do better once we come out of this kind of COVID-19 world.

Those are really the – probably the two largest off balance sheet investments..

Got it.

And then yes, just the second part of that question, I guess was at what point do you think it makes sense to internalize these investments or further your stake in these companies?.

Well, Guardian, we own 100% of, Covius we own 26% of, we would like to see, so Guardian we own and Covius depending upon how they do, we are very fond of the management team there. I have been pretty vocal about that Rob Clements and John Surface who are great partners of ours.

But as their earnings grow, we have optionality to increase our ownership to the extent that we want to do that..

Got it, okay.

And then just one more from me on the dividend respecting that it’s a board decision, you made some comments earlier about hopefully getting that higher in the not too distant future and I know you recently raised it, but it’s still well below the core earnings run-rate this quarter and just given that you have a very strong liquidity position, and don’t really need to be more defensive there arguably, just wondering how you see the dividend trending in the near-term where if you think it makes sense to kind of keep it at this level, while there is so much uncertainty ahead?.

I think it’s a little bit of both. Does it make sense to keep it at this level? If we thought, we would get back to book value and get paid for it, it's something that, again, it’s a board decision, it’s and something that we would discuss.

We don’t want to just put capital out there because you are in a uncertain world, $0.10 versus our normalized run-rate of $0.50. Obviously, there is a big delta there. We want to continue to get through a couple quarters of what I would say very strong earnings and grow earnings.

Our main thing is if we came to the market and our book value was truly $15, I use the MSR example of $4 per share, so, $10.77 plus $4, let’s say it’s upper 14s and the stock was trading at $8. You would have to think that the stock – the equity is very, very cheap. But again, we don’t want to just put out capital without getting credit for it.

And I do think that in a zero interest rate world, which is kind of how we are all operating in, I don’t know that the mortgage REIT space, whether it’s us or any of our other friends and peers out there should be trading at 10% or 12% dividend yields in this environment. So, we will monitor it.

I would like to see our – I want to – we want to get back to book value. I mean, it’s something that’s very important, I think for everybody specifically, our shareholders as we want to perform for shareholders. It’s hard as you think about the world that we are in and what’s going to happen.

Right now, that’s a pretty broad vague answer and I gave you enough..

No. I get how you are thinking about it. So, appreciate that.

And then just one more quick one I will jump off, do you have a book value update as of today?.

It’s pretty similar, I would think..

Okay..

Where we closed the quarter, give or take, might be slightly higher, because MSR values are a little bit higher right now..

Got it. Alright, thanks for taking my questions..

Thank you..

This concludes our question-and-answer session. I would like to turn the conference back over to Michael Nierenberg for any closing remarks..

Well, we appreciate everybody’s support obviously, in this crazy world we all live in. I hope everybody stays well. We look forward to performing for our shareholders and updating you throughout the quarter and on our next earnings call. Have a great summer. Thank you..

Conference is now concluded. Thank you for attending today’s presentation. You may now disconnect..