10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Form 10-Q

☑   QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 2021

or

☐   TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

Commission file number: 001-32136

Arbor Realty Trust, Inc.

(Exact name of registrant as specified in its charter)

Maryland	20-0057959
(State or other jurisdiction of incorporation)	(I.R.S. Employer Identification No.)
333 Earle Ovington Boulevard, Suite 900 Uniondale, NY (Address of principal executive offices)	11553 (Zip Code)

(Registrant’s telephone number, including area code): (516) 506-4200

Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Trading symbols	Name of each exchange on which registered
Common Stock, par value $0.01 per share	ABR	New York Stock Exchange
Preferred Stock, 6.375% Series D Cumulative Redeemable, par value $0.01 per share	ABR-PD	New York Stock Exchange
Preferred Stock, 6.25% Series E Cumulative Redeemable, par value $0.01 per share	ABR-PE	New York Stock Exchange
Preferred Stock, 6.25% Series F Fixed-to- Floating Rate Cumulative Redeemable, par value $0.01 per share	ABR-PF	New York Stock Exchange

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☑ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☑ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer  ☑	Accelerated filer  ☐	Non-accelerated filer  ☐
Smaller reporting company  ☐	Emerging growth company  ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☑

Issuer has 143,006,659 shares of common stock outstanding at October 22, 2021.

INDEX

PART I. FINANCIAL INFORMATION
Item 1. Financial Statements (Unaudited)	2
Consolidated Balance Sheets	2
Consolidated Statements of Income	3
Consolidated Statements of Changes in Equity	4
Consolidated Statements of Cash Flows	6
Notes to Consolidated Financial Statements	8
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations	51
Item 3. Quantitative and Qualitative Disclosures about Market Risk	66
Item 4. Controls and Procedures	67
PART II. OTHER INFORMATION
Item 1. Legal Proceedings	67
Item 1A. Risk Factors	67
Item 6. Exhibits	68
Signatures	70

Forward-Looking Statements

The information contained in this quarterly report on Form 10-Q is not a complete description of our business or the risks associated with an investment in Arbor Realty Trust, Inc.  We urge you to carefully review and consider the various disclosures in this report.

This report contains certain “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Such forward-looking statements relate to, among other things, the operating performance of our investments and financing needs. We use words such as “anticipate,” “expect,” “believe,” “intend,” “should,” “could,” “will,” “may” and similar expressions to identify forward-looking statements, although not all forward-looking statements include these words.  Forward-looking statements are based on certain assumptions, discuss future expectations, describe future plans and strategies, contain projections of results of operations or of financial condition or state other forward-looking information.  Our ability to predict results or the actual effect of future plans or strategies is inherently uncertain.  These forward-looking statements involve risks, uncertainties and other factors that may cause our actual results in future periods to differ materially from forecasted results.  Factors that could have a material adverse effect on our operations and future prospects include, but are not limited to, changes in economic conditions generally, and the real estate market specifically, in particular, due to the uncertainties created by the novel coronavirus (“COVID-19”) pandemic; the potential impact of the COVID-19 pandemic on our business, results of operations and financial condition; adverse changes in our status with government-sponsored enterprises affecting our ability to originate loans through such programs; changes in interest rates; the quality and size of the investment pipeline and the rate at which we can invest our cash; impairments in the value of the collateral underlying our loans and investments; changes in federal and state laws and regulations, including changes in tax laws; the availability and cost of capital for future investments; and competition. Readers are cautioned not to place undue reliance on any of these forward-looking statements, which reflect our views as of the date of this report.  The factors noted above could cause our actual results to differ significantly from those contained in any forward-looking statement.

Additional information regarding these and other risks and uncertainties we face is contained in our annual report on Form 10-K for the year ended December 31, 2020 (the “2020 Annual Report”) filed with the SEC on February 19, 2021 and in our other reports and filings with the SEC.

Although we believe the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future results, levels of activity, performance or achievements.  We are under no duty to update any of the forward-looking statements after the date of this report to conform these statements to actual results.

i

PART I. FINANCIAL INFORMATION

Item 1. Financial Statements

ARBOR REALTY TRUST, INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

($ in thousands, except share and per share data)

	September 30,		December 31,
	2021		2020
	(Unaudited)
Assets:
Cash and cash equivalents	$	380,730	$	339,528
Restricted cash		569,928		197,470
Loans and investments, net (allowance for credit losses: $131,534 and $148,329, respectively)		8,993,790		5,285,868
Loans held-for-sale, net		1,274,234		986,919
Capitalized mortgage servicing rights, net		417,283		379,974
Securities held-to-maturity, net (allowance for credit losses: $1,761 and $1,644, respectively)		112,735		95,524
Investments in equity affiliates		91,846		74,274
Due from related party		12,664		12,449
Goodwill and other intangible assets		101,933		105,451
Other assets		214,441		183,529
Total assets	$	12,169,584	$	7,660,986
Liabilities and Equity:
Credit and repurchase facilities	$	3,399,711	$	2,234,883
Collateralized loan obligations		4,715,804		2,517,309
Senior unsecured notes		1,102,578		662,843
Convertible senior unsecured notes, net		258,001		267,973
Junior subordinated notes to subsidiary trust issuing preferred securities		142,192		141,656
Due to related party		4,384		2,365
Due to borrowers		93,544		89,325
Allowance for loss-sharing obligations		62,828		64,303
Other liabilities		255,135		197,644
Total liabilities		10,034,177		6,178,301
Commitments and contingencies (Note 13)
Equity:
Arbor Realty Trust, Inc. stockholders' equity:
Preferred stock, cumulative, redeemable, $0.01 par value: 100,000,000 shares authorized, shares issued and outstanding by period, respectively:
Special voting preferred shares, 16,325,095 and 17,560,633 shares
8.25% Series A, 0 and 1,551,500 shares
7.75% Series B, 0 and 1,260,000 shares
8.50% Series C, 0 and 900,000 shares
6.375% Series D, 9,200,000 and 0 shares
6.25% Series E, 5,750,000 and 0 shares		361,635		89,472
Common stock, $0.01 par value: 500,000,000 shares authorized - 143,007,036 and 123,181,173 shares issued and outstanding, respectively		1,430		1,232
Additional paid-in capital		1,635,134		1,317,109
Retained earnings (accumulated deficit)		10,674		(63,442)
Total Arbor Realty Trust, Inc. stockholders' equity		2,008,873		1,344,371
Noncontrolling interest		126,534		138,314
Total equity		2,135,407		1,482,685
Total liabilities and equity	$	12,169,584	$	7,660,986

Note: Our consolidated balance sheets include assets and liabilities of consolidated variable interest entities, or VIEs, as we are the primary beneficiary of these VIEs. As of September 30, 2021 and December 31, 2020, assets of our consolidated VIEs totaled $5,706,553 and $3,134,447, respectively, and the liabilities of our consolidated VIEs totaled $4,721,526 and $2,520,064, respectively. See Note 14 for discussion of our VIEs.

See Notes to Consolidated Financial Statements.

2

ARBOR REALTY TRUST, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF INCOME (Unaudited)

($ in thousands, except share and per share data)

	Three Months Ended September 30,				Nine Months Ended September 30,
	2021		2020		2021		2020
Interest income	$	125,480	$	81,701	$	321,772	$	253,307
Interest expense		55,560		37,888		144,122		129,172
Net interest income		69,920		43,813		177,650		124,135
Other revenue:
Gain on sales, including fee-based services, net		16,334		19,895		86,102		60,566
Mortgage servicing rights		32,453		42,357		95,688		96,708
Servicing revenue, net		20,088		13,348		50,939		40,156
Property operating income		—		1,033		—		3,976
Loss on derivative instruments, net		(1,492)		(753)		(7,320)		(58,852)
Other income, net		2,195		1,050		4,140		3,404
Total other revenue		69,578		76,930		229,549		145,958
Other expenses:
Employee compensation and benefits		41,973		32,962		128,647		101,652
Selling and administrative		11,757		9,356		33,707		29,013
Property operating expenses		149		1,300		421		4,778
Depreciation and amortization		1,807		1,922		5,349		5,830
Provision for loss sharing (net of recoveries)		(3,272)		(2,227)		(1,070)		21,706
Provision for credit losses (net of recoveries)		(3,799)		(7,586)		(12,689)		59,510
Total other expenses		48,615		35,727		154,365		222,489
Income before extinguishment of debt, sale of real estate, income from equity affiliates and income taxes		90,883		85,016		252,834		47,604
Loss on extinguishment of debt		—		—		(1,370)		(3,546)
(Loss) gain on sale of real estate		—		(1,868)		1,228		(1,868)
Income from equity affiliates		5,086		32,358		32,095		56,758
Provision for income taxes		(9,905)		(17,785)		(33,356)		(15,493)
Net income		86,064		97,721		251,431		83,455
Preferred stock dividends		4,913		1,888		13,216		5,665
Net income attributable to noncontrolling interest		8,347		13,836		26,806		11,012
Net income attributable to common stockholders	$	72,804	$	81,997	$	211,409	$	66,778
Basic earnings per common share	$	0.51	$	0.72	$	1.57	$	0.60
Diluted earnings per common share	$	0.51	$	0.72	$	1.56	$	0.59
Weighted average shares outstanding:
Basic		142,624,300		113,766,446		134,437,663		111,775,436
Diluted		160,270,905		133,997,087		152,691,461		132,401,315
Dividends declared per common share	$	0.35	$	0.31	$	1.02	$	0.91

See Notes to Consolidated Financial Statements.

3

ARBOR REALTY TRUST, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY (Unaudited)

($ in thousands, except shares)

Three Months Ended September 30, 2021
									Retained		Total Arbor
	Preferred	Preferred		Common	Common		Additional		Earnings		Realty Trust, Inc.
	Stock	Stock		Stock	Stock		Paid-in		(Accumulated		Stockholders'		Noncontrolling
	Shares	Value		Shares	Par Value		Capital		Deficit)		Equity		Interest		Total Equity
Balance – July 1, 2021	25,552,233	$	222,627	141,738,609	$	1,417	$	1,620,898	$	(12,084)	$	1,832,858	$	123,909	$	1,956,767
Issuance of common stock	—		—	800,000		8		14,596		—		14,604		—		14,604
Issuance of common stock from convertible debt	—		—	386,459		4		(4)		—		—		—		—
Issuance of 6.25% Series E preferred stock	5,750,000		139,008	—		—		—		—		139,008		—		139,008
Redemption of preferred stock	—		—	—		—		—		—		—		—		—
Stock-based compensation, net	—		—	81,968		1		(356)		—		(355)		—		(355)
Distributions - common stock	—		—	—		—		—		(50,043)		(50,043)		—		(50,043)
Distributions - preferred stock	—		—	—		—		—		(4,916)		(4,916)		—		(4,916)
Distributions - noncontrolling interest	—		—	—		—		—		—		—		(5,722)		(5,722)
Distributions - noncontrolling interest	(27,138)		—	—		—		—		—		—		—		—
Net income	—		—	—		—		—		77,717		77,717		8,347		86,064
Balance – September 30, 2021	31,275,095	$	361,635	143,007,036	$	1,430	$	1,635,134	$	10,674	$	2,008,873	$	126,534	$	2,135,407

Nine Months Ended September 30, 2021
Balance - January 1, 2021	21,272,133	$	89,472	123,181,173	$	1,232	$	1,317,109	$	(63,442)	$	1,344,371	$	138,314	$	1,482,685
Issuance of common stock	—		—	20,222,879		202		342,416		—		342,618		—		342,618
Repurchase of common stock	—		—	(1,399,999)		(14)		(23,446)		—		(23,460)		—		(23,460)
Issuance of common stock from convertible debt	—		—	386,459		4		(4)		—		—		—		—
Issuance of 6.375% Series D preferred stock	9,200,000		222,463	—		—		—		—		222,463		—		222,463
Issuance of 6.25% Series E preferred stock	5,750,000		139,008	—		—		—		—		139,008		—		139,008
Redemption of preferred stock	(3,711,500)		(89,296)	—		—		—		(3,492)		(92,788)		—		(92,788)
Stock-based compensation, net	—		—	616,524		6		(941)		—		(935)		—		(935)
Distributions - common stock	—		—	—		—		—		(137,282)		(137,282)		—		(137,282)
Distributions - preferred stock	—		—	—		—		—		(9,735)		(9,735)		—		(9,735)
Distributions - noncontrolling interest	—		—	—		—		—		—		—		(17,488)		(17,488)
Redemption of operating partnership units	(1,235,538)		(12)	—		—		—		—		(12)		(21,098)		(21,110)
Net income	—		—	—		—		—		224,625		224,625		26,806		251,431
Balance – September 30, 2021	31,275,095	$	361,635	143,007,036	$	1,430	$	1,635,134	$	10,674	$	2,008,873	$	126,534	$	2,135,407

See Notes to Consolidated Financial Statements.

4

ARBOR REALTY TRUST, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY (Unaudited) (Continued)

($ in thousands, except shares)

Three Months Ended September 30, 2020
											Total Arbor
					Common						Realty Trust, Inc.
	Preferred	Preferred		Common	Stock Par		Additional Paid-		Accumulated		Stockholders'		Noncontrolling
	Stock Shares	Stock Value		Stock Shares	Value		in Capital		Deficit		Equity		Interest		Total Equity
Balance - July 1, 2020	24,080,765	$	89,500	112,211,461	$	1,122	$	1,182,449	$	(167,165)	$	1,105,906	$	151,870	$	1,257,776
Issuance of common stock	—		—	3,579,266		36		40,506		—		40,542		—		40,542
Stock-based compensation, net	—		—	139,624		1		(10)		—		(9)		—		(9)
Distributions - common stock	—		—	—		—		—		(35,371)		(35,371)		—		(35,371)
Distributions - preferred stock	—		—	—		—		—		(1,888)		(1,888)		—		(1,888)
Distributions - noncontrolling interest	—		—	—		—		—		—		—		(5,880)		(5,880)
Redemption of operating partnership units	(2,736,894)		(28)	—		—		—		—		(28)		(29,627)		(29,655)
Net income	—		—	—		—		—		83,885		83,885		13,836		97,721
Balance – September 30, 2020	21,343,871	$	89,472	115,930,351	$	1,159	$	1,222,945	$	(120,539)	$	1,193,037	$	130,199	$	1,323,236

Nine Months Ended September 30, 2020
Balance – January 1, 2020	24,195,594	$	89,501	109,706,214	$	1,097	$	1,154,932	$	(60,920)	$	1,184,610	$	171,417	$	1,356,027
Cummulative-effect adjustment (adoption of credit loss standard)	—		—	—		—		—		(24,106)		(24,106)		(4,501)		(28,607)
Balance – January 1, 2020 (as adjusted for adoption of credit loss standard)	24,195,594	$	89,501	109,706,214	$	1,097	$	1,154,932	$	(85,026)	$	1,160,504	$	166,916	$	1,327,420
Issuance of common stock	—		—	6,887,274		69		78,481		—		78,550		—		78,550
Repurchase of common stock	—		—	(1,625,777)		(16)		(12,745)		—		(12,761)		—		(12,761)
Issuance of common stock from convertible debt	—		—	363,013		3		90		—		93		—		93
Stock-based compensation, net	—		—	599,627		6		3,786		—		3,792		—		3,792
Distributions - common stock	—		—	—		—		—		(102,283)		(102,283)		—		(102,283)
Distributions - preferred stock	—		—	—		—		—		(5,673)		(5,673)		—		(5,673)
Distributions - noncontrolling interest	—		—	—		—		—		—		—		(18,102)		(18,102)
Redemption of operating partnership units	(2,851,723)		(29)	—		—		(1,599)		—		(1,628)		(29,627)		(31,255)
Net income	—		—	—		—		—		72,443		72,443		11,012		83,455
Balance –September 30, 2020	21,343,871	$	89,472	115,930,351	$	1,159	$	1,222,945	$	(120,539)	$	1,193,037	$	130,199	$	1,323,236

See Notes to Consolidated Financial Statements.

5

ARBOR REALTY TRUST, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)

(in thousands)

	Nine Months Ended September 30,
	2021		2020
Operating activities:
Net income	$	251,431	$	83,455
Adjustments to reconcile net income to net cash (used in) provided by operating activities:
Depreciation and amortization		5,349		5,830
Stock-based compensation		7,986		7,286
Amortization and accretion of interest and fees, net		119		3,172
Amortization of capitalized mortgage servicing rights		43,744		36,129
Originations of loans held-for-sale		(4,558,811)		(3,940,322)
Proceeds from sales of loans held-for-sale, net of gain on sale		4,330,959		4,169,411
Loss on sale of real estate		—		1,868
Mortgage servicing rights		(95,688)		(96,708)
Write-off of capitalized mortgage servicing rights from payoffs		18,344		12,610
Provision for loss sharing (net of recoveries)		(1,070)		21,706
Provision for credit losses (net of recoveries)		(12,689)		59,510
Net recoveries (charge-offs) for loss sharing obligations		(411)		399
Deferred tax provision (benefit)		10,692		(5,172)
Income from equity affiliates		(32,095)		(56,758)
Distributions from equity affiliates		25,450		16,333
Loss on extinguishment of debt		1,370		3,546
Payoffs and paydowns of loans held-for-sale		2,375		117
Changes in operating assets and liabilities		2,543		(18,711)
Net cash (used in) provided by operating activities		(402)		303,701
Investing Activities:
Loans and investments funded, originated and purchased, net		(5,174,313)		(1,425,051)
Payoffs and paydowns of loans and investments		1,345,559		674,929
Proceeds from sale of loans and investments		110,000		—
Deferred fees		41,475		10,338
Contributions to equity affiliates		(38,604)		(98)
Distributions from equity affiliates		27,675		—
Purchase of securities held-to-maturity, net		(23,747)		(37,927)
Payoffs and paydowns of securities held-to-maturity		9,760		8,914
Due to borrowers and reserves		(53,929)		(50,168)
Investments in real estate, net		—		(131)
Proceeds from sale of real estate, net		—		7,499
Net cash used in investing activities		(3,756,124)		(811,695)
Financing activities:
Proceeds from credit and repurchase facilities		10,494,663		7,565,743
Paydowns and payoffs of credit and repurchase facilities		(9,328,154)		(7,792,471)
Proceeds from issuance of collateralized loan obligations		2,567,387		668,000
Payoffs and paydowns of collateralized loan obligations		(356,150)		(282,874)
Payoffs and paydowns of debt fund		—		(70,000)
Proceeds from issuance of common stock		342,618		78,550
Proceeds from issuance of preferred stock		361,471		—
Settlements of convertible senior unsecured notes		(14,300)		(22,145)
Proceeds from issuance of senior unsecured notes		445,000		345,750
Redemption of preferred stock		(92,788)		—
Redemption of operating partnership units		(21,110)		(31,255)
Payments of withholding taxes on net settlement of vested stock		(8,921)		(3,494)
Repurchase of common stock		(23,460)		(12,761)
Distributions to stockholders		(161,404)		(126,058)
Payment of deferred financing costs		(34,666)		(17,086)
Net cash provided by financing activities		4,170,186		299,899
Net increase (decrease) in cash, cash equivalents and restricted cash		413,660		(208,095)
Cash, cash equivalents and restricted cash at beginning of period		536,998		510,562
Cash, cash equivalents and restricted cash at end of period	$	950,658	$	302,467

See Notes to Consolidated Financial Statements.

6

ARBOR REALTY TRUST, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) (Continued)

(in thousands)

	Nine Months Ended September 30,
	2021		2020
Reconciliation of cash, cash equivalents and restricted cash:
Cash and cash equivalents at beginning of period	$	339,528	$	299,687
Restricted cash at beginning of period		197,470		210,875
Cash, cash equivalents and restricted cash at beginning of period	$	536,998	$	510,562
Cash and cash equivalents at end of period	$	380,730	$	192,204
Restricted cash at end of period		569,928		110,263
Cash, cash equivalents and restricted cash at end of period	$	950,658	$	302,467
Supplemental cash flow information:
Cash used to pay interest	$	119,978	$	108,573
Cash used to pay taxes		37,436		22,810
Supplemental schedule of non-cash investing and financing activities:
Loans transferred from loans and investment, net to loans held-for-sale	$	65,204	$	—
Distributions accrued on preferred stock		3,732		629
Cummulative-effect adjustment (for adoption of credit loss standard)		—		28,607
Settlements of convertible senior unsecured notes		—		4,778
Fair value of conversion feature of convertible senior unsecured notes		—		185
Issuance of common stock from convertible debt		—		93

See Notes to Consolidated Financial Statements.

7

ARBOR REALTY TRUST, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

September 30, 2021

Note 1 — Description of Business

Arbor Realty Trust, Inc. (“we,” “us,” or “our”) is a Maryland corporation formed in 2003. We operate through two business segments: our Structured Loan Origination and Investment Business, or “Structured Business,” and our Agency Loan Origination and Servicing Business, or “Agency Business.”

Through our Structured Business, we invest in a diversified portfolio of structured finance assets in the multifamily, single-family rental (“SFR”) and commercial real estate markets, primarily consisting of bridge and mezzanine loans, including junior participating interests in first mortgages and preferred and direct equity. We also invest in real estate-related joint ventures and may directly acquire real property and invest in real estate-related notes and certain mortgage-related securities.

Through our Agency Business, we originate, sell and service a range of multifamily finance products through the Federal National Mortgage Association (“Fannie Mae”) and the Federal Home Loan Mortgage Corporation (“Freddie Mac,” and together with Fannie Mae, the government-sponsored enterprises, or “GSEs”), the Government National Mortgage Association (“Ginnie Mae”), Federal Housing Authority (“FHA”) and the U.S. Department of Housing and Urban Development (together with Ginnie Mae and FHA, “HUD”). We retain the servicing rights and asset management responsibilities on substantially all loans we originate and sell under the GSE and HUD programs. We are an approved Fannie Mae Delegated Underwriting and Servicing (“DUS”) lender nationally, a Freddie Mac Multifamily Conventional Loan lender, seller/servicer, in New York, New Jersey and Connecticut, a Freddie Mac affordable, manufactured housing, senior housing and small balance loan (“SBL”) lender, seller/servicer, nationally and a HUD MAP and LEAN senior housing/healthcare lender nationally. We also originate and service permanent financing loans underwritten using the guidelines of our existing agency loans sold to the GSEs, which we refer to as “Private Label” loans, and originate and sell finance products through conduit/commercial mortgage-backed securities (“CMBS”) programs. We pool and securitize the Private Label loans and sell certificates in the securitizations to third-party investors, while retaining the servicing rights and the highest risk bottom tranche certificate of the securitization (“APL certificates”).

Substantially all of our operations are conducted through our operating partnership, Arbor Realty Limited Partnership (“ARLP”), for which we serve as the indirect general partner, and ARLP's subsidiaries. We are organized to qualify as a real estate investment trust (“REIT”) for U.S. federal income tax purposes. A REIT is generally not subject to federal income tax on that portion of its REIT-taxable income that is distributed to its stockholders, provided that at least 90% of taxable income is distributed and provided that certain other requirements are met. Certain of our assets that produce non-qualifying REIT income, primarily within the Agency Business, are operated through taxable REIT subsidiaries (“TRS”), which are part of our TRS consolidated group (the “TRS Consolidated Group”) and are subject to U.S. federal, state and local income taxes. In general, our TRS entities may hold assets that the REIT cannot hold directly and may engage in real estate or non-real estate-related business.

Note 2 — Basis of Presentation and Significant Accounting Policies

Basis of Presentation

These consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States (“GAAP”), for interim financial statements and the instructions to Form 10-Q. Accordingly, certain information and footnote disclosures normally included in the consolidated financial statements prepared under GAAP have been condensed or omitted. In our opinion, all adjustments considered necessary for a fair presentation of our financial position, results of operations and cash flows have been included and are of a normal and recurring nature. The operating results presented for interim periods are not necessarily indicative of the results that may be expected for any other interim period or for the entire year. These financial statements should be read in conjunction with our financial statements and notes thereto included in our 2020 Annual Report.

Principles of Consolidation

These consolidated financial statements include our financial statements and the financial statements of our wholly owned subsidiaries, partnerships and other joint ventures in which we own a controlling interest, including variable interest entities (“VIEs”) of which we are the primary beneficiary. Entities in which we have a significant influence are accounted for under the equity method. Our VIEs are described in Note 14. All significant intercompany transactions and balances have been eliminated in consolidation.

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ARBOR REALTY TRUST, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

September 30, 2021

Use of Estimates

The preparation of consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that could materially affect the amounts reported in the consolidated financial statements and accompanying notes. Actual results could differ from those estimates. Beginning early 2020, there has been a global outbreak of COVID-19, which had forced many countries, including the United States, to declare national emergencies, to institute “stay-at-home” orders, to close financial markets and to restrict operations of non-essential businesses. Such actions have created significant disruptions in global supply chains, and adversely impacted many industries. COVID-19 could have a continued and prolonged adverse impact on economic and market conditions, which could continue a period of global economic slowdown. The impact of COVID-19 on companies continues to evolve, and the extent and duration of the economic fallout from this pandemic, both globally and to our business, remain unclear, making any estimate or assumption as of September 30, 2021 inherently less certain than they would be absent the current and potential impacts of COVID-19.

Reclassification

Certain amounts in the prior period financial statements have been reclassified to conform to the presentation of the current period financial statements. Our real estate owned assets previously recorded to real estate owned, net on our consolidated balance sheets are now recorded to other assets for all periods presented.

Recently Adopted Accounting Pronouncements

Description	Adoption Date	Effect on Financial Statements
In December 2019, the Financial Accounting Standards Board (“FASB”) issued Accounting Standard Update (“ASU”) 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes, which removes certain exceptions to the general principles in Topic 740 and also clarifies and amends existing guidance to improve consistent application.	First quarter of 2021	The adoption of this guidance did not have a material impact on our consolidated financial statements.

Recently Issued Accounting Pronouncements

Description	Effective Date	Effect on Financial Statements
In August 2020, the FASB issued ASU 2020-06, Debt—Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging—Contracts in Entity’s Own Equity (Subtopic 815-40): Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity. This guidance reduces the number of accounting models for convertible debt instruments. Upon adoption of this guidance, convertible debt proceeds will no longer be allocated between debt and equity components, reducing the unamortized debt discount and lowering interest expense. This guidance also changes the method used to calculate diluted earnings per share when an instrument may be settled in cash or shares, if the effect is dilutive.	First quarter of 2022 with early adoption permitted beginning in the first quarter of 2021	We continue to evaluate the impact the adoption of this guidance will have on our consolidated financial statements and related disclosures. We expect to adopt this guidance on January 1, 2022. Upon adoption, we will reclassify the remaining equity component from equity to our convertible senior unsecured notes liability and cease the amortization of the debt discount through interest expense. The adoption of this guidance will also require us to change the method which we use to calculate diluted earnings per share to the if-converted method, potentially requiring us to add back interest expense to the numerator and make certain adjustments to the denominator.

Significant Accounting Policies

See Item 8 – Financial Statements and Supplementary Data in our 2020 Annual Report for a description of our significant accounting policies. There have been no significant changes to our significant accounting policies since December 31, 2020.

9

ARBOR REALTY TRUST, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

September 30, 2021

Note 3 — Loans and Investments

Our Structured Business loan and investment portfolio consists of ($ in thousands):

								Wtd. Avg.
								Remaining	Wtd. Avg.		Wtd. Avg.
			Percent of		Loan	Wtd. Avg.		Months to	First Dollar		Last Dollar
	September 30, 2021		Total		Count	Pay Rate (1)		Maturity	LTV Ratio (2)		LTV Ratio (3)
Bridge loans (4)	$	8,696,486	95	%	423	4.45	%	20.7	0	%	76	%
Mezzanine loans		256,413	3	%	38	6.83	%	53.5	30	%	82	%
Preferred equity investments		186,705	2	%	13	6.62	%	35.2	59	%	89	%
Other loans (5)		29,403	<1	%	2	4.63	%	51.1	0	%	69	%
		9,169,007	100	%	476	4.56	%	22.0	2	%	76	%
Allowance for credit losses		(131,534)
Unearned revenue		(43,683)
Loans and investments, net	$	8,993,790

	December 31, 2020
Bridge loans (4)	$	5,022,509	92	%	263	5.09	%	16.2	0	%	76	%
Mezzanine loans		159,242	3	%	29	7.40	%	45.0	32	%	82	%
Preferred equity investments		224,928	4	%	14	7.07	%	49.8	64	%	89	%
Other loans (5)		68,403	1	%	22	4.95	%	74.8	0	%	69	%
		5,475,082	100	%	328	5.23	%	19.2	4	%	77	%
Allowance for credit losses		(148,329)
Unearned revenue		(40,885)
Loans and investments, net	$	5,285,868

(1) “Weighted Average Pay Rate” is a weighted average, based on the unpaid principal balance (“UPB”) of each loan in our portfolio, of the interest rate required to be paid monthly as stated in the individual loan agreements. Certain loans and investments that require an additional rate of interest “accrual rate” to be paid at maturity are not included in the weighted average pay rate as shown in the table.

(2) The “First Dollar Loan-to-Value (“LTV”) Ratio” is calculated by comparing the total of our senior most dollar and all senior lien positions within the capital stack to the fair value of the underlying collateral to determine the point at which we will absorb a total loss of our position.

(3) The “Last Dollar LTV Ratio” is calculated by comparing the total of the carrying value of our loan and all senior lien positions within the capital stack to the fair value of the underlying collateral to determine the point at which we will initially absorb a loss.

(4) As of September 30, 2021 and December 31, 2020, bridge loans included 86 and 38, respectively, SFR loans with an aggregate UPB of $614.3 million and $309.2 million, respectively, of which $277.3 million and $88.1 million, respectively, was funded.

(5) As of September 30, 2021, other loans included 2 variable rate SFR permanent loans and as of December 31, 2020, other loans included 22 SFR permanent loans.

During the first quarter of 2021, the Structured Business transferred 21 fixed rate SFR permanent loans with a UPB of $65.2 million to the Agency Business, which represented all fixed rate SFR permanent loans originated prior to such transfer. Fixed rate SFR permanent loans are reported through the Agency Business beginning in 2021 and classified as held-for-sale. See Note 4 for further details.

Concentration of Credit Risk

We are subject to concentration risk in that, at September 30, 2021, the UPB related to 32 loans with five different borrowers represented 11% of total assets. At December 31, 2020, the UPB related to 22 loans with five different borrowers represented 12% of total assets. During both the nine months ended September 30, 2021 and the year ended December 31, 2020, no single loan or investment represented more than 10% of our total assets and no single investor group generated over 10% of our revenue. See Note 17 for details on our concentration of related party loans and investments.

10

ARBOR REALTY TRUST, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

September 30, 2021

We assign a credit risk rating of pass, pass/watch, special mention, substandard or doubtful to each loan and investment, with a pass rating being the lowest risk and a doubtful rating being the highest risk. Each credit risk rating has benchmark guidelines that pertain to debt-service coverage ratios, LTV ratios, borrower strength, asset quality, and funded cash reserves. Other factors such as guarantees, market strength, and remaining loan term and borrower equity are also reviewed and factored into determining the credit risk rating assigned to each loan. This metric provides a helpful snapshot of portfolio quality and credit risk. All portfolio assets are subject to, at a minimum, a thorough quarterly financial evaluation in which historical operating performance and forward-looking projections are reviewed, however, we maintain a higher level of scrutiny and focus on loans that we consider “high risk” and that possess deteriorating credit quality.

Generally speaking, given our typical loan profile, risk ratings of pass, pass/watch and special mention suggest that we expect the loan to make both principal and interest payments according to the contractual terms of the loan agreement. A risk rating of substandard indicates we anticipate the loan may require a modification of some kind. A risk rating of doubtful indicates we expect the loan to underperform over its term, and there could be loss of interest and/or principal. Further, while the above are the primary guidelines used in determining a certain risk rating, subjective items such as borrower strength, market strength or asset quality may result in a rating that is higher or lower than might be indicated by any risk rating matrix.

11

ARBOR REALTY TRUST, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

September 30, 2021

A summary of the loan portfolio’s internal risk ratings and LTV ratios by asset class as of September 30, 2021 is as follows ($ in thousands):

																Wtd. Avg.		Wtd. Avg.
	UPB by Origination Year															First Dollar		Last Dollar
Asset Class / Risk Rating	2021		2020		2019		2018		2017		Prior		Total			LTV Ratio		LTV Ratio
Multifamily:
Pass	$	3,167,965	$	350,623	$	185,265	$	—	$	20,300	$	276	$	3,724,429
Pass/Watch		1,458,271		1,077,411		256,877		127,255		32,500		28,800		2,981,114
Special Mention		180,723		415,519		617,506		63,233		—		350		1,277,331
Substandard		—		14,340		89,330		11,400		31,117		8,250		154,437
Doubtful		—		—		—		—		17,700		—		17,700
Total Multifamily	$	4,806,959	$	1,857,893	$	1,148,978	$	201,888	$	101,617	$	37,676	$	8,155,011		2	%	76	%
Single-Family Rental:												Percentage of portfolio		89	%
Pass	$	30,777	$	3,165	$	44,181	$	—	$	—	$	—	$	78,123
Pass/Watch		169,677		26,813		—		—		—		—		196,490
Special Mention		3,340		28,722		—		—		—		—		32,062
Total Single-Family Rental	$	203,794	$	58,700	$	44,181	$	—	$	—	$	—	$	306,675		0	%	63	%
Land:												Percentage of portfolio		3	%
Special Mention	$	—	$	8,100	$	—	$	—	$	—	$	—	$	8,100
Substandard		—		71,018		19,524		—		19,975		127,928		238,445
Total Land	$	—	$	79,118	$	19,524	$	—	$	19,975	$	127,928	$	246,545		0	%	95	%
Healthcare:												Percentage of portfolio		3	%
Pass/Watch	$	—	$	—	$	—	$	26,850	$	—	$	—	$	26,850
Special Mention		—		—		65,819		14,650		39,650		—		120,119
Total Healthcare	$	—	$	—	$	65,819	$	41,500	$	39,650	$	—	$	146,969		0	%	79	%
Office:												Percentage of portfolio		2	%
Special Mention	$	—	$	35,410	$	—	$	42,799	$	43,151	$	2,096	$	123,456
Doubtful		—		—		—		—		—		880		880
Total Office	$	—	$	35,410	$	—	$	42,799	$	43,151	$	2,976	$	124,336		0	%	83	%
Student Housing:												Percentage of portfolio		1	%
Pass	$	25,700	$	—	$	—	$	—	$	—	$	—	$	25,700
Special Mention		—		—		31,100		—		—		—		31,100
Substandard		—		23,500		—		13,000		—		—		36,500
Total Student Housing	$	25,700	$	23,500	$	31,100	$	13,000	$	—	$	—	$	93,300		19	%	71	%
Hotel:												Percentage of portfolio		1	%
Pass/Watch	$	—	$	5,846	$	—	$	—	$	—	$	—	$	5,846
Special Mention		—		—		41,000		—		—		—		41,000
Total Hotel	$	—	$	5,846	$	41,000	$	—	$	—	$	—	$	46,846		0	%	75	%
Retail:												Percentage of portfolio		1	%
Pass	$	—	$	—	$	4,000	$	—	$	—	$	—	$	4,000
Special Mention		—		—		—		26,600		—		—		26,600
Substandard		—		—		—		—		—		3,445		3,445
Total Retail	$	—	$	—	$	4,000	$	26,600	$	—	$	3,445	$	34,045		9	%	72	%
Other:												Percentage of portfolio		< 1	%
Pass/Watch	$	—	$	—	$	—	$	—	$	13,580	$	—	$	13,580
Doubtful		—		—		—		—		—		1,700		1,700
Total Other	$	—	$	—	$	—	$	—	$	13,580	$	1,700	$	15,280		7	%	51	%
												Percentage of portfolio		< 1	%
Grand Total	$	5,036,453	$	2,060,467	$	1,354,602	$	325,787	$	217,973	$	173,725	$	9,169,007		2	%	76	%

Geographic Concentration Risk

As of September 30, 2021, 18% and 15% of the outstanding balance of our loan and investment portfolio had underlying properties in Texas and New York, respectively. As of December 31, 2020, 19% and 11% of the outstanding balance of our loan and investment portfolio had underlying properties in New York and Texas, respectively. No other states represented 10% or more of the total loan and investment portfolio.

12

ARBOR REALTY TRUST, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

September 30, 2021

Allowance for Credit Losses

A summary of the changes in the allowance for credit losses is as follows (in thousands):

	Three Months Ended September 30, 2021
	Land		Multifamily		Retail		Office		Student Housing		Hotel		Healthcare		Other		Total
Allowance for credit losses:
Beginning balance	$	78,057	$	30,160	$	13,819	$	7,822	$	2,365	$	225	$	3,866	$	2,133	$	138,447
Provision for credit losses (net of recoveries)		(45)		(2,093)		—		(95)		(542)		(209)		(3,851)		(78)		(6,913)
Ending balance	$	78,012	$	28,067	$	13,819	$	7,727	$	1,823	$	16	$	15	$	2,055	$	131,534

	Three Months Ended September 30, 2020
Allowance for credit losses:
Beginning balance	$	78,094	$	34,606	$	13,981	$	8,532	$	4,110	$	7,672	$	3,930	$	1,886	$	152,811
Provision for credit losses (net of recoveries)		(84)		103		(40)		(6,589)		675		(133)		(21)		23		(6,066)
Ending balance	$	78,010	$	34,709	$	13,941	$	1,943	$	4,785	$	7,539	$	3,909	$	1,909	$	146,745

	Nine Months Ended September 30, 2021
Allowance for credit losses:
Beginning balance	$	78,150	$	36,468	$	13,861	$	1,846	$	4,078	$	7,759	$	3,880	$	2,287	$	148,329
Provision for credit losses (net of recoveries)		(138)		(8,401)		(42)		5,881		(2,255)		(7,743)		(3,865)		(232)		(16,795)
Ending balance	$	78,012	$	28,067	$	13,819	$	7,727	$	1,823	$	16	$	15	$	2,055	$	131,534

	Nine Months Ended September 30, 2020
Allowance for credit losses:
Beginning balance, prior to adoption of CECL	$	67,869	$	—	$	—	$	1,500	$	—	$	—	$	—	$	1,700	$	71,069
Impact of adopting CECL - January 1, 2020		77		16,322		335		287		68		29		64		112		17,294
Provision for credit losses (net of recoveries)		10,064		18,387		13,606		156		4,717		7,510		3,845		97		58,382
Ending balance	$	78,010	$	34,709	$	13,941	$	1,943	$	4,785	$	7,539	$	3,909	$	1,909	$	146,745

Our estimate of allowance for credit losses on our structured loans and investments, including related unfunded loan commitments, was based on a reasonable and supportable forecast period that was adjusted for the expectations that the markets we operate in will experience moderate improvements in economic conditions, decreases in unemployment rates, continued low interest rates and other market factors including positive developments in the COVID-19 pandemic.

The expected credit losses over the contractual period of our loans also include the obligation to extend credit through our unfunded loan commitments. Our current expected credit loss (“CECL”) allowance for unfunded loan commitments are adjusted quarterly and correspond with the associated outstanding loans. As of September 30, 2021 and December 31, 2020, we had outstanding unfunded commitments of $638.1 million and $353.8 million, respectively, that we are obligated to fund as borrowers meet certain requirements.

As of September 30, 2021 and December 31, 2020, accrued interest receivable related to our loans totaling $59.7 million and $41.6 million, respectively, was excluded from the estimate of credit losses and is included in other assets on the consolidated balance sheets.

13

ARBOR REALTY TRUST, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

September 30, 2021

All of our structured loans and investments are secured by real estate assets or by interests in real estate assets, and, as such, the measurement of credit losses may be based on the difference between the fair value of the underlying collateral and the carrying value of the assets as of the period end. A summary of our specific loans considered impaired by asset class is as follows (in thousands):

	September 30, 2021
							Wtd. Avg. First		Wtd. Avg. Last
			Carrying		Allowance for		Dollar LTV		Dollar LTV
Asset Class	UPB (1)		Value		Credit Losses		Ratio		Ratio
Land	$	134,215	$	127,868	$	77,868	0	%	99	%
Retail		30,045		29,348		13,818	10	%	77	%
Office		2,096		2,096		1,500	0	%	64	%
Commercial		1,700		1,700		1,700	63	%	63	%
Total	$	168,056	$	161,012	$	94,886	2	%	94	%

	December 31, 2020
Land	$	134,215	$	127,829	$	77,869	0	%	99	%
Hotel		110,000		89,613		7,500	0	%	94	%
Retail		30,079		28,957		13,851	10	%	75	%
Healthcare		4,625		4,673		3,845	0	%	83	%
Office		2,166		2,166		1,500	0	%	71	%
Commercial		1,700		1,700		1,700	63	%	63	%
Total	$	282,785	$	254,938	$	106,265	1	%	94	%

(1) Represents the UPB of eight and ten impaired loans (less unearned revenue and other holdbacks and adjustments) by asset class at September 30, 2021 and December 31, 2020, respectively.

There were no loans for which the fair value of the collateral securing the loan was less than the carrying value of the loan for which we had not recorded a provision for credit loss as of September 30, 2021 and December 31, 2020.

At September 30, 2021, six loans with an aggregate net carrying value of $53.0 million, net of related loan loss reserves of $2.6 million, were classified as non-performing and, at December 31, 2020, seven loans with an aggregate net carrying value of $53.8 million, net of related loan loss reserves of $6.5 million, were classified as non-performing. Income from non-performing loans is generally recognized on a cash basis when it is received. Full income recognition will resume when the loan becomes contractually current and performance has recommenced.

A summary of our non-performing loans by asset class is as follows (in thousands):

	September 30, 2021						December 31, 2020
			Less Than		Greater Than				Less Than		Greater Than
			90 Days		90 Days				90 Days		90 Days
	UPB		Past Due		Past Due		UPB		Past Due		Past Due
Student Housing	$	36,500	$	—	$	36,500	$	36,500	$	—	$	36,500
Multifamily		17,700		—		17,700		17,700		—		17,700
Commercial		1,700		—		1,700		1,700		—		1,700
Retail		920		—		920		920		—		920
Office		880		—		880		880		—		880
Healthcare		—		—		—		4,625		—		4,625
Total	$	57,700	$	—	$	57,700	$	62,325	$	—	$	62,325

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ARBOR REALTY TRUST, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

September 30, 2021

In addition, we have six loans with a carrying value totaling $121.4 million at September 30, 2021, that are collateralized by a land development project. The loans do not carry a current pay rate of interest, however, five of the loans with a carrying value totaling $112.0 million entitle us to a weighted average accrual rate of interest of 7.91%. In 2008, we suspended the recording of the accrual rate of interest on these loans, as they were impaired and we deemed the collection of this interest to be doubtful. At both September 30, 2021 and December 31, 2020, we had a cumulative allowance for credit losses of $71.4 million related to these loans. The loans are subject to certain risks associated with a development project including, but not limited to, availability of construction financing, increases in projected construction costs, demand for the development's outputs upon completion of the project, and litigation risk. Additionally, these loans were not classified as non-performing as the borrower is in compliance with all of the terms and conditions of the loans.

At both September 30, 2021 and December 31, 2020, we had no loans contractually past due 90 days or more that are still accruing interest. During both the three and nine months ended September 30, 2021 and 2020, interest income recognized on nonaccrual loans was de minimis.

In August 2020, we entered into a loan modification agreement on a $26.5 million bridge loan with an interest rate of LIBOR plus 6.00% with a 2.375% LIBOR floor and a $6.1 million mezzanine loan with a fixed rate of 12% collateralized by a retail property to: (1) reduce the interest rate on both loans to the greater of: (i) LIBOR plus 5.50% and (ii) 6.50%, and (2) to extend the maturity three years to December 2024. A portion of the foregoing interest equal to 2.00% will be deferred to payoff and will be waived if the loan is paid off by December 31, 2022. The loan modification agreement also includes a $6.0 million required principal paydown, which occurred at the closing of the modification transaction, and an $8.0 million principal reduction once the borrower deposits an additional reserve deposit of approximately $4.6 million by December 31, 2021.

In 2019, we purchased $50.0 million of a $110.0 million bridge loan, which was collateralized by a hotel property and scheduled to mature in December 2022. In the first quarter of 2020, we recorded a $7.5 million allowance for credit losses due to a reduction in the appraised value of the property. In August 2020, we purchased the remaining $60.0 million bridge loan at a discount for $39.9 million, which we determined had experienced a more than insignificant deterioration in credit quality since origination and, therefore, deemed to be a purchased loan with credit deterioration. The $20.1 million discount was classified as a noncredit discount and no portion of the discount was allocated to allowance for credit losses at the date of purchase since the appraised value of the property was greater than the purchase price. Shortly after the purchase, we entered into a forbearance agreement with the borrower to temporarily reduce the interest rate from LIBOR plus 3.00% with a 1.50% LIBOR floor to a pay rate of 1.00% and to include a $10.0 million principal reduction if the loan is paid off by March 2, 2021. In January 2021, we entered into a second forbearance agreement which temporarily eliminated the pay rate, extended the principal reduction payoff deadline to June 30, 2021 and increased the interest rate to an unaccrued default rate of 9.50%, which was deferred to payoff. In June 2021, we received $95.0 million for full satisfaction of these loans, reversed the $7.5 million allowance for credit losses and recorded interest income of $3.5 million.

These two loan modifications were deemed troubled debt restructurings. There were no other loan modifications, refinancing's and/or extensions during the nine months ended September 30, 2021 and 2020 that were considered troubled debt restructurings.

Given the transitional nature of some of our real estate loans, we may require funds to be placed into an interest reserve, based on contractual requirements, to cover debt service costs. At September 30, 2021 and December 31, 2020, we had total interest reserves of $89.2 million and $78.3 million, respectively, on 297 loans and 186 loans, respectively, with an aggregate UPB of $5.27 billion and $3.60 billion, respectively.

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ARBOR REALTY TRUST, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

September 30, 2021

Note 4 — Loans Held-for-Sale, Net

Our GSE loans held-for-sale are typically sold within 60 days of loan origination, while our Private Label loans are generally expected to be sold and securitized within 180 days of loan origination. Loans held-for-sale, net consists of the following (in thousands):

	September 30, 2021		December 31, 2020
Private Label	$	761,098	$	56,186
Fannie Mae		279,981		679,342
Freddie Mac		108,589		180,004
FHA		70,113		53,063
SFR - Fixed Rate		39,506		—
		1,259,287		968,595
Fair value of future MSR		19,151		21,600
Unearned discount		(4,204)		(3,276)
Loans held-for-sale, net	$	1,274,234	$	986,919

During the three and nine months ended September 30, 2021, we sold $1.01 billion and $4.33 billion, respectively, of loans held-for-sale and recorded gain on sales, including fees, of $16.3 million and $86.1 million, respectively. During the three and nine months ended September 30, 2020, we sold $1.22 billion and $4.17 billion, respectively, of loans held-for-sale and recorded gain on sales, including fees, of $19.9 million and $60.6 million, respectively.

Included in the total loans sold during 2021 and 2020 were Private Label loans totaling $449.9 million and $727.2 million, respectively, which were sold to unconsolidated affiliates of ours who pooled and securitized the loans. We retained the most subordinate class of certificates in the 2021 and 2020 securitizations totaling $38.2 million and $63.6 million, respectively, in satisfaction of credit risk retention requirements (see Note 7 for details), and we are also the primary servicer of the mortgage loans. In addition, the total loans sold during 2021 included 23 fixed rate SFR permanent loans totaling $75.3 million which resulted in a gain on sale of $2.8 million.

At September 30, 2021 and December 31, 2020, there were no loans held-for-sale that were 90 days or more past due, and there were no loans held-for-sale that were placed on a non-accrual status.

Subsequent Event. In October 2021, we closed a Private Label securitization totaling $535.0 million, of which we retained the most subordinate class of certificates totaling $47.5 million.

Note 5 — Capitalized Mortgage Servicing Rights

Our capitalized mortgage servicing rights (“MSRs”) reflect commercial real estate MSRs derived from loans sold in our Agency Business or acquired MSRs. The discount rates used to determine the present value of our MSRs throughout the periods presented for all MSRs were between 8% - 13% (representing a weighted average discount rate of 12%) based on our best estimate of market discount rates. The weighted average estimated life remaining of our MSRs was 8.5 years and 8.6 years at September 30, 2021 and December 31, 2020, respectively.

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ARBOR REALTY TRUST, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

September 30, 2021

A summary of our capitalized MSR activity is as follows (in thousands):

	Three Months Ended September 30, 2021						Nine Months Ended September 30, 2021
	Originated		Acquired		Total		Originated		Acquired		Total
Beginning balance	$	383,063	$	35,590	$	418,653	$	336,466	$	43,508	$	379,974
Additions		22,387		—		22,387		99,397		—		99,397
Amortization		(12,345)		(2,527)		(14,872)		(35,221)		(8,523)		(43,744)
Write-downs and payoffs		(7,420)		(1,465)		(8,885)		(14,957)		(3,387)		(18,344)
Ending balance	$	385,685	$	31,598	$	417,283	$	385,685	$	31,598	$	417,283

	Three Months Ended September 30, 2020						Nine Months Ended September 30, 2020
Beginning balance	$	260,452	$	52,836	$	313,288	$	221,901	$	64,519	$	286,420
Additions		37,403		—		37,403		97,554		—		97,554
Amortization		(8,811)		(3,605)		(12,416)		(24,425)		(11,704)		(36,129)
Write-downs and payoffs		(2,081)		(959)		(3,040)		(8,067)		(4,543)		(12,610)
Ending balance	$	286,963	$	48,272	$	335,235	$	286,963	$	48,272	$	335,235

We collected prepayment fees totaling $11.2 million and $18.1 million during the three and nine months ended September 30, 2021, respectively, and $2.0 million and $10.1 million during the three and nine months ended September 30, 2020, respectively. Prepayment fees are included as a component of servicing revenue, net on the consolidated statements of income. As of September 30, 2021 and December 31, 2020, we had no valuation allowance recorded on any of our MSRs.

The expected amortization of capitalized MSRs recorded as of September 30, 2021 is as follows (in thousands):

Year	Amortization
2021 (three months ending 12/31/2021)	$	14,991
2022		57,963
2023		54,522
2024		51,072
2025		48,251
2026		44,235
Thereafter		146,249
Total	$	417,283

Actual amortization may vary from these estimates.

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ARBOR REALTY TRUST, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

September 30, 2021

Note 6 — Mortgage Servicing

Product and geographic concentrations that impact our servicing revenue are as follows ($ in thousands):

September 30, 2021
Product Concentrations					Geographic Concentrations
						UPB
			Percent of			Percentage
Product	UPB (1)		Total		State	of Total
Fannie Mae	$	19,271,527	74	%	Texas	14	%
Freddie Mac		4,726,587	18	%	New York	10	%
Private Label		1,176,391	4	%	North Carolina	9	%
FHA		933,519	4	%	California	9	%
SFR - Fixed Rate		104,094	<1	%	Georgia	6	%
Total	$	26,212,118	100	%	Florida	6	%
					New Jersey	5	%
					Other (2)	41	%
					Total	100	%

December 31, 2020
Fannie Mae	$	18,268,268	74	%	Texas	16	%
Freddie Mac		4,881,080	20	%	New York	9	%
FHA		752,116	3	%	North Carolina	9	%
Private Label		726,992	3	%	California	9	%
Total	$	24,628,456	100	%	Florida	7	%
					Georgia	6	%
					New Jersey	4	%
					Other (2)	40	%
					Total	100	%

(1) Excludes loans which we are not collecting a servicing fee.

(2) No other individual state represented 4% or more of the total.

At September 30, 2021 and December 31, 2020, our weighted average servicing fee was 45.7 basis points and 45.4 basis points, respectively. At September 30, 2021 and December 31, 2020, we held total escrow balances of $1.78 billion and $1.29 billion, respectively, which is not reflected in our consolidated balance sheets. Of the total escrow balances, we held $767.2 million and $867.6 million at September 30, 2021 and December 31, 2020, respectively, related to loans we are servicing within our Agency Business. These escrows are maintained in separate accounts at several federally insured depository institutions, which may exceed FDIC insured limits. We earn interest income on the total escrow deposits, generally based on a market rate of interest negotiated with the financial institutions that hold the escrow deposits. Interest earned on total escrows, net of interest paid to the borrower, was $1.0 million and $3.2 million during the three and nine months ended September 30, 2021, respectively, and $1.3 million and $5.8 million during the three and nine months ended September 30, 2020, respectively, and is a component of servicing revenue, net in the consolidated statements of income.

Note 7 — Securities Held-to-Maturity

Agency Private Label Certificates (“APL certificates”). In connection with our Private Label securitizations, we retain the most subordinate class of the APL certificates in satisfaction of credit risk retention requirements. As of September 30, 2021, we retained APL certificates with an initial face value of $101.9 million, which were purchased at a discount for $61.7 million. These certificates are collateralized by 10-year fixed rate first mortgage loans on multifamily properties, bear interest at an initial weighted average variable rate of 4.51% and have an estimated weighted average remaining maturity of 8.6 years. The weighted average effective interest rate was 9.65% and 10.15% at September 30, 2021 and December 31, 2020, respectively, and the full $101.9 million is expected to mature after five years through ten years.

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ARBOR REALTY TRUST, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

September 30, 2021

Agency B Piece Bonds. Freddie Mac may choose to hold, sell or securitize loans we sell to them under the Freddie Mac SBL program. As part of the securitizations under the SBL program, we have the ability to purchase the B Piece bond through a bidding process, which represents the bottom 10%, or highest risk, of the securitization. As of September 30, 2021, we retained 49%, or $106.2 million initial face value, of seven B Piece bonds, which were purchased at a discount for $74.7 million, and sold the remaining 51% to a third-party at par. These securities are collateralized by a pool of multifamily mortgage loans, bear interest at an initial weighted average variable rate of 3.74% and have an estimated weighted average remaining maturity of 5.8 years. The weighted average effective interest rate was 11.17% and 10.85% at September 30, 2021 and December 31, 2020, respectively, including the accretion of a portion of the discount deemed collectible. Approximately $11.3 million is estimated to mature within one year, $30.1 million is estimated to mature after one year through five years, $8.2 million is estimated to mature after five years through ten years and $15.5 million is estimated to mature after ten years.

A summary of our securities held-to-maturity is as follows (in thousands):

			Net Carrying		Unrealized		Estimated		Allowance for
	Face Value		Value		Gain/(Loss)		Fair Value		Credit Losses
September 30, 2021
APL certificates	$	101,868	$	62,412	$	5,575	$	67,987	$	1,315
B Piece bonds		65,137		50,323		3,821		54,144		446
Total	$	167,005	$	112,735	$	9,396	$	122,131	$	1,761
December 31, 2020
APL certificates	$	63,627	$	37,685	$	(2,105)	$	35,580	$	1,023
B Piece bonds		76,497		57,839		709		58,548		621
Total	$	140,124	$	95,524	$	(1,396)	$	94,128	$	1,644

A summary of the changes in the allowance for credit losses for our securities held-to-maturity is as follows (in thousands):

	Three Months Ended September 30, 2021
	APL		B Piece
	Certificates		Bonds		Total
Beginning balance	$	1,568	$	547	$	2,115
Provision for credit loss expense/(reversal)		(253)		(101)		(354)
Ending balance	$	1,315	$	446	$	1,761

	Nine Months Ended September 30, 2021
Beginning balance	$	1,023	$	621	$	1,644
Provision for credit loss expense/(reversal)		292		(175)		117
Ending balance	$	1,315	$	446	$	1,761

The allowance for credit losses on our held-to-maturity securities was estimated on a collective basis by major security type and was based on a reasonable and supportable forecast period and a historical loss reversion for similar securities. The issuers continue to make timely principal and interest payments and we continue to accrue interest on all our securities. As of September 30, 2021, no other-than-temporary impairment was recorded on our held-to-maturity securities.

We recorded interest income (including the amortization of discount) related to these investments of $3.4 million and $9.4 million during the three and nine months ended September 30, 2021, respectively, and $2.9 million and $6.9 million during the three and nine months ended September 30, 2020, respectively.

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ARBOR REALTY TRUST, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

September 30, 2021

Note 8 — Investments in Equity Affiliates

We account for all investments in equity affiliates under the equity method. A summary of these investments is as follows (in thousands):

					UPB of Loans to
	Investments in Equity Affiliates at				Equity Affiliates at
Equity Affiliates	September 30, 2021		December 31, 2020		September 30, 2021
Arbor Residential Investor LLC	$	68,473	$	59,150	$	—
AMAC Holdings III LLC		12,223		10,308		—
Tapestry on the River		3,410		—		—
Emerson at Forney		3,000		—		—
North Vermont Avenue		2,420		2,496		—
Lightstone Value Plus REIT L.P.		1,895		1,895		—
JT Prime		425		425		—
West Shore Café		—		—		1,687
Lexford Portfolio		—		—		—
East River Portfolio		—		—		—
Total	$	91,846	$	74,274	$	1,687

Arbor Residential Investor LLC (“ARI”). During the three and nine months ended September 30, 2021, we recorded income of $5.4 million and $32.7 million, respectively, and during the three and nine months ended September 30, 2020, we recorded income of $32.3 million and $56.1 million, respectively, to income from equity affiliates in our consolidated statements of income. We also received cash distributions totaling $4.7 million and $23.4 million from this investment during the three and nine months ended September 30, 2021, respectively, and $15.0 million during both the three and nine months ended September 30, 2020, which were classified as returns of capital. In January 2021, an equity investor in the underlying residential mortgage banking business exercised their right to purchase an additional interest in this investment, which decreased our indirect interest to 12.3%. The allocation of income is based on the underlying agreements, which may be different than our indirect interest, and was 9.2% as of September 30, 2021.

Summarized statements of income for Wakefield Investment Holdings LLC, the third-party entity formed to hold the underlying residential mortgage banking business, are as follows (in thousands):

	Nine Months Ended September 30,
	2021		2020
Statements of Income:
Total revenues	$	935,444	$	1,171,796
Total expenses		722,882		790,454
Net income	$	212,562	$	381,342

AMAC Holdings III LLC (“AMAC III”). During 2021, we funded an additional $4.5 million of a total committed investment of $30.0 million, which brings the total funded investment to $16.3 million at September 30, 2021. During the three and nine months ended September 30, 2021 the loss recorded from this investment was $0.4 million and $0.9 million, respectively. We also received cash distributions totaling $1.7 million from this investment during the three months ended September 30, 2021, which were classified as returns of capital.

Century Summerfield Apartments. During the first quarter of 2021, we funded $17.0 million of a total committed investment of $20.0 million for a 50% equity interest in a joint venture with a third party that was formed to invest in an apartment community. During the second quarter of 2021, this joint venture was dissolved and we received distributions totaling $17.2 million and recorded a $0.2 million gain.

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ARBOR REALTY TRUST, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

September 30, 2021

Tapestry on the River. During the three months ended September 30, 2021, we invested $14.0 million for a 48.9% equity interest in a joint venture with a third party that was formed to invest in an apartment community. We received distributions totaling $10.6 million during the three months ended September 30, 2021, which were classified as returns of capital.

Emerson at Forney. During the three months ended September 30, 2021, we invested $3.0 million for an 11.1% equity interest in a joint venture with a third party that was formed to invest in an apartment community.

See Note 17 for details of certain investments described above.

Note 9 — Debt Obligations

Credit and Repurchase Facilities

Borrowings under our credit and repurchase facilities are as follows ($ in thousands):

				September 30, 2021							December 31, 2020
			Note	Debt		Collateral					Debt		Collateral
	Current	Extended	Rate	Carrying		Carrying		Wtd. Avg.			Carrying		Carrying
	Maturity	Maturity	Type	Value (1)		Value		Note Rate			Value (1)		Value
Structured Business
$1.25B joint repurchase facility	Mar. 2022	Mar. 2023	V	$	1,068,118	$	1,449,400		2.32	%	$	681,006	$	1,054,562
$725M repurchase facility	Sept. 2022	Sept. 2023	V		343,511		484,880		2.08	%		191,622		259,559
$450M repurchase facility	Mar. 2023	Mar. 2026	V		211,118		270,396		1.97	%		—		—
$225M credit facility	Oct. 2022	Oct. 2023	V		14,403		21,755		3.90	%		23,606		31,809
$200M credit facility	July 2022	N/A	V		146,878		197,468		2.14	%		39,346		47,912
$200M repurchase facility	Oct. 2023	Oct 2024	V		110,592		148,021		1.86	%		31,780		40,551
$198.7M repurchase facility (2)	Dec. 2021	N/A	V		167,106		197,804		3.04	%		71,627		87,242
$164.4M loan specific credit facilities	Dec. 2021 to Jan. 2024	N/A	V/F		164,232		218,950		3.01	%		148,615		198,550
$100M credit facility	Oct. 2022	N/A	V		3,246		4,878		4.06	%		—		—
$50M credit facility	April 2022	N/A	V		22,407		28,485		2.11	%		15,992		21,300
$30M working capital facility	Nov. 2021	N/A	V		—		—		—			30,000		—
$25M credit facility	June 2022	June 2023	V		12,623		18,296		2.36	%		9,323		14,340
$1M master security agreements	Dec. 2022	N/A	F		790		—		4.01	%		1,441		—
Repurchase facilities - securities (3)	N/A	N/A	V		32,201		—		3.38	%		38,487		—
Structured Business total				$	2,297,225	$	3,040,333		2.35	%	$	1,282,845	$	1,755,825
Agency Business
$750M ASAP agreement	N/A	N/A	V	$	176,261	$	176,264		1.40	%	$	301,455	$	302,491
$750M joint repurchase facility	Mar. 2022	N/A	V		642,652		761,098		2.06	%		42,808		56,186
$400M repurchase facility (4)	Oct. 2021	N/A	V		169,406		169,409		1.58	%		174,515		174,555
$200M credit facility	Mar. 2022	N/A	V		108,533		108,635		1.60	%		294,732		296,698
$150M credit facility	Nov. 2021	N/A	V		3,100		3,100		1.43	%		49,632		49,754
$50M credit facility	Sept. 2022	N/A	V		1,275		1,275		1.38	%		88,896		88,911
$1.3M repurchase facility (2)	Dec. 2021	N/A	V		1,259		1,481		3.00	%		—		—
Agency Business total				$	1,102,486	$	1,221,262		1.83	%	$	952,038	$	968,595
Consolidated total				$	3,399,711	$	4,261,595		2.18	%	$	2,234,883	$	2,724,420

V = Variable Note Rate; F = Fixed Note Rate

(1) The debt carrying value for the Structured Business at September 30, 2021 and December 31, 2020 was net of unamortized deferred finance costs of $3.9 million and $3.3 million, respectively. The debt carrying value for the Agency Business at September 30, 2021 and December 31, 2020 was net of unamortized deferred finance costs of $1.6 million and $0.6 million, respectively.

(2) A portion of this repurchase facility was used to finance a fixed rate SFR permanent loan reported through our Agency Business.

(3) These repurchase facilities are subject to margin call provisions associated with changes in interest spreads. As of September 30, 2021 and December 31, 2020, these facilities were collateralized by our B Piece bonds with a carrying value of $50.3 million and $58.5 million, respectively, and an SFR bond with a carrying value of $10.0 million at December 31, 2020.

(4) We are currently in negotiations with the lender to amend this facility.

Generally, our credit and repurchase facilities have extension options that are at the discretion of the banking institutions in which we have long standing relationships with. These facilities typically renew annually and also include a “wind-down” feature.

21

ARBOR REALTY TRUST, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

September 30, 2021

Joint Repurchase Facility. We amended this facility three times in 2021 to increase the facility size to $2.00 billion, which is shared between the Structured Business and the Agency Business, and to extend the maturity to March 2022 with a one year extension option. This facility is used to finance structured loans and Private Label loans. The interest rate under the facility is determined on a loan-by-loan basis and may include a LIBOR floor equal to a pro rata share of the LIBOR floors included in our originated loans. The facility has a maximum advance rate of 80% on all loans and has a $50.0 million over advance available that bears interest at a rate of LIBOR plus 5.75%, which over advance availability matures in June 2022. If the estimated market value of the loans financed in this facility decrease, we may be required to pay down borrowings under this facility.

Structured Business

At September 30, 2021 and December 31, 2020, the weighted average interest rate for the credit and repurchase facilities of our Structured Business, including certain fees and costs, such as structuring, commitment, non-use and warehousing fees, was 2.53% and 2.97%, respectively. The leverage on our loan and investment portfolio financed through our credit and repurchase facilities, excluding the securities repurchase facilities, working capital facility and the master security agreements, was 75% and 69% at September 30, 2021 and December 31, 2020, respectively.

We amended our $400.0 million repurchase facility four times in 2021 to increase the facility size to $725 million and to extend the maturity to September 2022. The interest rate on new loans in 2021 is LIBOR plus 1.75% with a 0.35% LIBOR floor if utilization is above $250.0 million and LIBOR plus 2.00% with up to a 0.35% LIBOR floor if utilization is below $250.0 million. For existing loans, the interest rate will remain at LIBOR plus 2.00% to 2.20% with a LIBOR floor reduced to 0.35%.

In September 2021, we amended our $100.0 million repurchase facility to increase the facility size to $200.0 million and extend the maturity to October 2023.

In August 2021, we amended our $100.0 million credit facility to increase the facility size to $200.0 million, extend the maturity to July 2022 and amend the interest rates from a LIBOR-based rate to the Secured Overnight Financing Rate (“SOFR”) plus 1.50% for multifamily, SOFR plus 2.20% for independent living and SOFR plus 2.45% for assisted living.

In March 2021, we entered into a $200.0 million repurchase facility to finance bridge loans that has interest rates of LIBOR plus 1.75% - 2.75% and matures in March 2023. The facility has a maximum advance rate of 80%. In May 2021, we amended this facility increasing the facility size to $250.0 million. In August 2021, we amended this facility increasing the facility size to $450.0 million.

In March 2021, we amended our $50.0 million credit facility increasing the facility size to $150.0 million and decreased the all in floor rate by 0.15%. In September 2021, we amended this facility to increase the facility size to $225.0 million and allow for further reduction to the all in floor rate by up to 1.10%.

In March 2021, we entered into an $18.2 million credit facility used to finance a hotel bridge loan. The facility bore interest at the prime rate with a 3.25% floor and was scheduled to mature in December 2022. This facility was paid off in September 2021.

In February 2021, we entered into a $21.6 million credit facility used to finance a multifamily bridge loan. The facility bears interest at a 3.00% fixed rate and matures in January 2024.

Agency Business

During the third quarter of 2021, we amended our $150.0 million credit facility to reduce the interest rate to LIBOR plus 1.35% and extend the maturity to October 2021.

In August 2021, we amended our $100.0 million credit facility to decrease the facility size to $50.0 million, extend the maturity to September 2022 and increase the interest rate 0.15% to LIBOR plus 1.30%.

In March 2021, we amended our $150.0 million credit facility to increase the facility size to $200.0 million, extend the maturity to March 2022, increase the interest rate 0.20% and add a 0.25% LIBOR floor.

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ARBOR REALTY TRUST, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

September 30, 2021

Collateralized Loan Obligations (“CLOs”)

We account for CLO transactions on our consolidated balance sheet as financing facilities. Our CLOs are VIEs for which we are the primary beneficiary and are consolidated in our financial statements. The investment grade tranches are treated as secured financings, and are non-recourse to us.

Borrowings and the corresponding collateral under our CLOs are as follows ($ in thousands):

	Debt						Collateral (3)
							Loans				Cash
			Carrying		Wtd. Avg.				Carrying		Restricted
September 30, 2021	Face Value		Value (1)		Rate (2)		UPB		Value		Cash (4)
CLO 16	$	1,237,500	$	1,229,631	1.41	%	$	1,147,056	$	1,140,662	$	312,984
CLO 15		674,412		669,272	1.47	%		796,612		792,770		—
CLO 14		655,475		650,531	1.43	%		724,633		722,221		42,341
CLO 13		668,000		664,700	1.52	%		767,167		765,158		26,182
CLO 12		534,193		531,616	1.60	%		601,231		599,879		25,764
CLO 11		533,000		530,785	1.54	%		592,829		591,484		53,347
CLO 10		441,000		439,269	1.55	%		508,598		507,346		39,511
Total CLOs	$	4,743,580	$	4,715,804	1.49	%	$	5,138,126	$	5,119,520	$	500,129

December 31, 2020
CLO 13	$	668,000	$	663,804	1.58	%	$	768,664	$	768,664	$	43
CLO 12		534,193		530,673	1.66	%		628,935		628,935		2,005
CLO 11		533,000		529,859	1.61	%		555,157		555,157		92,395
CLO 10		441,000		438,442	1.61	%		522,132		522,132		25,537
CLO 9		356,150		354,531	1.53	%		457,903		457,903		18,703
Total CLOs	$	2,532,343	$	2,517,309	1.60	%	$	2,932,791	$	2,932,791	$	138,683

(1) Debt carrying value is net of $27.8 million and $15.0 million of deferred financing fees at September 30, 2021 and December 31, 2020, respectively.

(2) At September 30, 2021 and December 31, 2020, the aggregate weighted average note rate for our CLOs, including certain fees and costs, was 1.79% and 1.93%, respectively.

(3) As of September 30, 2021 and December 31, 2020, there were no collateral deemed a “credit risk” as defined by the CLO indentures.

(4) Represents restricted cash held for principal repayments as well as for reinvestment in the CLOs. Does not include restricted cash related to interest payments, delayed fundings and expenses totaling $52.6 million and $49.5 million at September 30, 2021 and December 31, 2020, respectively.

CLO 16. In September 2021, we completed CLO 16, issuing eight tranches of CLO notes through two newly-formed wholly-owned subsidiaries totaling $1.37 billion. Of the total CLO notes issued, $1.24 billion were investment grade notes issued to third party investors and $135.0 million were below investment grade notes retained by us. As of the CLO closing date, the notes were secured by a portfolio of loan obligations with a face value of $1.19 billion, consisting primarily of bridge loans that were contributed from our existing loan portfolio. The financing has an approximate two-and-a-half-year replacement period that allows the principal proceeds and sale proceeds (if any) of the loan obligations to be reinvested in qualifying replacement loan obligations, subject to the satisfaction of certain conditions set forth in the indenture. Thereafter, the outstanding debt balance will be reduced as loans are repaid. Initially, the proceeds of the issuance of the securities also included $313.0 million for the purpose of acquiring additional loan obligations for a period of up to 180 days from the CLO closing date, resulting in the issuer owning loan obligations with a face value of $1.50 billion, representing leverage of 83%. We retained a residual interest in the portfolio with a notional amount of $262.5 million, including the $135.0 million below investment grade notes. The notes sold to third parties had an initial weighted average interest rate of 1.31% plus one-month LIBOR and interest payments on the notes are payable monthly.

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ARBOR REALTY TRUST, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

September 30, 2021

CLO 15. In June 2021, we completed CLO 15, issuing eight tranches of CLO notes through two newly-formed wholly-owned subsidiaries totaling $747.8 million. Of the total CLO notes issued, $674.4 million were investment grade notes issued to third party investors and $73.4 million were below investment grade notes retained by us. As of the CLO closing date, the notes were secured by a portfolio of loan obligations with a face value of $653.0 million, consisting primarily of bridge loans that were contributed from our existing loan portfolio. The financing has an approximate two-and-a-half-year replacement period that allows the principal proceeds and sale proceeds (if any) of the loan obligations to be reinvested in qualifying replacement loan obligations, subject to the satisfaction of certain conditions set forth in the indenture. Thereafter, the outstanding debt balance will be reduced as loans are repaid. Initially, the proceeds of the issuance of the securities also included $162.0 million for the purpose of acquiring additional loan obligations for a period of up to 180 days from the CLO closing date, which we subsequently utilized, resulting in the issuer owning loan obligations with a face value of $815.0 million, representing leverage of 83%. We retained a residual interest in the portfolio with a notional amount of $140.6 million, including the $73.4 million below investment grade notes. The notes sold to third parties had an initial weighted average interest rate of 1.37% plus one-month LIBOR and interest payments on the notes are payable monthly.

CLO 14. In March 2021, we completed CLO 14, issuing eight tranches of CLO notes through two newly-formed wholly-owned subsidiaries totaling $724.2 million. Of the total CLO notes issued, $655.5 million were investment grade notes issued to third party investors and $68.7 million were below investment grade notes retained by us. As of the CLO closing date, the notes were secured by a portfolio of loan obligations with a face value of $635.2 million, consisting primarily of bridge loans that were contributed from our existing loan portfolio. The financing has a two-and-a-half-year replacement period that allows the principal proceeds and sale proceeds (if any) of the loan obligations to be reinvested in qualifying replacement loan obligations, subject to the satisfaction of certain conditions set forth in the indenture. Thereafter, the outstanding debt balance will be reduced as loans are repaid. Initially, the proceeds of the issuance of the securities also included $149.8 million for the purpose of acquiring additional loan obligations for a period of up to 180 days from the CLO closing date, which we subsequently utilized, resulting in the issuer owning loan obligations with a face value of $785.0 million, representing leverage of 84%. We retained a residual interest in the portfolio with a notional amount of $129.5 million, including the $68.7 million below investment grade notes. The notes sold to third parties had an initial weighted average interest rate of 1.33% plus one-month LIBOR and interest payments on the notes are payable monthly.

CLO 9. In March 2021, we unwound CLO 9, redeeming $356.2 million of outstanding notes which were repaid primarily from the refinancing of the remaining assets primarily within CLO 14, as well as with cash held by CLO 9, and expensed $1.4 million of deferred financing fees into loss on extinguishment of debt on the consolidated statements of income.

Senior Unsecured Notes

A summary of our senior unsecured notes is as follows (in thousands):

Senior			September 30, 2021						December 31, 2020
Unsecured	Issuance				Carrying		Wtd. Avg.				Carrying		Wtd. Avg.
Notes	Date	Maturity	UPB		Value (1)		Rate (2)		UPB		Value (1)		Rate (2)
4.50% Notes (3)	Aug. 2021	Sept. 2026	$	270,000	$	265,938	4.50	%	$	—	$	—	—	%
5.00% Notes (3)	Apr. 2021	Apr. 2026		175,000		172,148	5.00	%		—		—	—	%
8.00% Notes (3)	Apr. 2020	Apr. 2023		70,750		70,099	8.00	%		70,750		69,793	8.00	%
4.50% Notes (3)	Mar. 2020	Mar. 2027		275,000		272,356	4.50	%		275,000		271,994	4.50	%
4.75% Notes (4)	Oct. 2019	Oct. 2024		110,000		108,930	4.75	%		110,000		108,668	4.75	%
5.75% Notes (4)	Mar. 2019	Apr. 2024		90,000		89,038	5.75	%		90,000		88,751	5.75	%
5.625% Notes (4)	Mar. 2018	May 2023		125,000		124,069	5.63	%		125,000		123,637	5.63	%
			$	1,115,750	$	1,102,578	5.05	%	$	670,750	$	662,843	5.29	%

(1) At September 30, 2021 and December 31, 2020, the carrying value is net of deferred financing fees of $13.2 million and $7.9 million, respectively.

(2) At September 30, 2021 and December 31, 2020, the aggregate weighted average note rate, including certain fees and costs, was 5.36% and 5.65%, respectively.

(3) These notes can be redeemed by us prior to three months before the maturity date, at a redemption price equal to 100% of the aggregate principal amount, plus a “make-whole” premium and accrued and unpaid interest. We have the right to redeem the notes three months prior to or after the maturity date, at a redemption price equal to 100% of the aggregate principal amount, plus accrued and unpaid interest.

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ARBOR REALTY TRUST, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

September 30, 2021

(4) These notes can be redeemed by us at any time prior to the maturity date, at a redemption price equal to 100% of the aggregate principal amount, plus a “make-whole” premium and accrued and unpaid interest. We have the right to redeem the notes on or after the maturity date, at a redemption price equal to 100% of the aggregate principal amount, plus accrued and unpaid interest.

In August 2021, we issued $270.0 million aggregate principal amount of 4.50% senior unsecured notes due in 2026 in a private offering. We received net proceeds of $265.8 million from the issuance, after deducting the underwriting discount and other offering expenses. We are using the net proceeds to make investments related to our business and for general corporate purposes.

In April 2021, we issued $175.0 million aggregate principal amount of 5.00% senior unsecured notes due in 2026 in a private offering. We received net proceeds of $172.3 million from the issuance, after deducting the underwriting discount and other offering expenses. We used the net proceeds to make investments related to our business and for general corporate purposes.

Convertible Senior Unsecured Notes

In 2019, we issued $264.0 million in aggregate principal amount of 4.75% convertible senior notes (the “4.75% Convertible Notes”) through a private placement offering, which includes the exercised purchaser’s total over-allotment option of $34.0 million. The 4.75% Convertible Notes pay interest semiannually in arrears and are scheduled to mature in November 2022, unless earlier converted or repurchased by the holders pursuant to their terms. The initial conversion rate was 56.1695 shares of common stock per $1,000 of principal representing a conversion price of $17.80 per share of common stock. We received proceeds totaling $256.5 million, net of the underwriter’s discount and fees, which is being amortized through interest expense over the life of such notes. We used the net proceeds from the issuance primarily for the exchange of $228.7 million of our 5.25% convertible senior notes (the “5.25% Convertible Notes”) for a combination of $233.1 million in cash (which included accrued interest) and 4,478,315 shares of our common stock. The remaining net proceeds were used for general corporate purposes. As of September 30, 2021, the 4.75% Convertible Notes had a conversion rate of 56.6847 shares of common stock per $1,000 of principal, which represented a conversion price of $17.64 per share of common stock.

In July 2021, the remaining $14.3 million principal amount of our 5.25% Convertible Notes matured and were fully settled with $14.3 million of cash and 386,459 shares of common stock.

Our convertible senior unsecured notes are not redeemable by us prior to their maturities and are convertible by the holder into, at our election, cash, shares of our common stock, or a combination of both, subject to the satisfaction of certain conditions and during specified periods. The conversion rates are subject to adjustment upon the occurrence of certain specified events and the holders may require us to repurchase all, or any portion, of their notes for cash equal to 100% of the principal amount, plus accrued and unpaid interest, if we undergo a fundamental change specified in the agreements. We intend to settle the principal balance of our convertible debt in cash and have not assumed share settlement of the principal balance for purposes of computing earnings per share (“EPS”). At the time of issuance, there was no precedent or policy that would indicate that we would settle the principal in shares or the conversion spread in cash.

Accounting guidance requires that convertible debt instruments with cash settlement features, including partial cash settlement, account for the liability component and equity component (conversion feature) of the instrument separately. The initial value of the liability component reflects the present value of the discounted cash flows using the nonconvertible debt borrowing rate at the time of the issuance. The debt discount represents the difference between the proceeds received from the issuance and the initial carrying value of the liability component, which is accreted back to the notes principal amount through interest expense over the term of the notes, which was 1.09 years and 1.77 years at September 30, 2021 and December 31, 2020, respectively, on a weighted average basis.

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ARBOR REALTY TRUST, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

September 30, 2021

The UPB, unamortized discount and net carrying amount of the liability and equity components of our convertible notes are as follows (in thousands):

	Liability								Equity
	Component								Component
			Unamortized Debt		Unamortized Deferred		Net Carrying		Net Carrying
Period	UPB		Discount		Financing Fees		Value		Value
September 30, 2021	$	264,000	$	3,275	$	2,724	$	258,001	$	9,962
December 31, 2020	$	278,300	$	5,636	$	4,691	$	267,973	$	9,962

During the three months ended September 30, 2021, we incurred interest expense on the notes totaling $4.5 million, of which $3.1 million, $0.8 million and $0.6 million related to the cash coupon, amortization of the debt discount and of the deferred financing fees, respectively. During the nine months ended September 30, 2021, we incurred total interest expense on the notes of $14.1 million, of which $9.7 million, $2.4 million and $2.0 million related to the cash coupon, amortization of the debt discount and of the deferred financing fees, respectively. During the three months ended September 30, 2020, we incurred interest expense on the notes totaling $4.8 million, of which $3.3 million, $0.8 million and $0.7 million related to the cash coupon, amortization of the debt discount and of the deferred financing fees, respectively. During the nine months ended September 30, 2020, we incurred interest expense on the notes totaling $14.8 million, of which $10.0 million, $2.5 million and $2.3 million related to the cash coupon, amortization of the debt discount and of the deferred financing fees, respectively. Including the amortization of the deferred financing fees and debt discount, our weighted average total cost of the notes was 6.71% and 6.75% at September 30, 2021 and December 31, 2020, respectively.

Junior Subordinated Notes

The carrying values of borrowings under our junior subordinated notes were $142.2 million and $141.7 million at September 30, 2021 and December 31, 2020, respectively, which is net of a deferred amount of $10.4 million and $10.8 million, respectively, (which is amortized into interest expense over the life of the notes) and deferred financing fees of $1.8 million for both periods. These notes have maturities ranging from March 2034 through April 2037 and pay interest quarterly at a floating rate based on LIBOR. The weighted average note rate was 2.95% and 3.06% at September 30, 2021 and December 31, 2020, respectively. Including certain fees and costs, the weighted average note rate was 3.03% and 3.15% at September 30, 2021 and December 31, 2020, respectively.

Debt Covenants

Credit and Repurchase Facilities and Unsecured Debt. The credit and repurchase facilities and unsecured debt (senior and convertible notes) contain various financial covenants, including, but not limited to, minimum liquidity requirements, minimum net worth requirements, minimum unencumbered asset requirements, as well as certain other debt service coverage ratios, debt to equity ratios and minimum servicing portfolio tests. We were in compliance with all financial covenants and restrictions at September 30, 2021.

CLOs. Our CLO vehicles contain interest coverage and asset overcollateralization covenants that must be met as of the waterfall distribution date in order for us to receive such payments. If we fail these covenants in any of our CLOs, all cash flows from the applicable CLO would be diverted to repay principal and interest on the outstanding CLO bonds and we would not receive any residual payments until that CLO regained compliance with such tests. Our CLOs were in compliance with all such covenants as of September 30, 2021, as well as on the most recent determination dates in October 2021. In the event of a breach of the CLO covenants that could not be cured in the near-term, we would be required to fund our non-CLO expenses, including employee costs, distributions required to maintain our REIT status, debt costs, and other expenses with (i) cash on hand, (ii) income from any CLO not in breach of a covenant test, (iii) income from real property and loan assets, (iv) sale of assets, or (v) accessing the equity or debt capital markets, if available. We have the right to cure covenant breaches which would resume normal residual payments to us by purchasing non-performing loans out of the CLOs. However, we may not have sufficient liquidity available to do so at such time.

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ARBOR REALTY TRUST, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

September 30, 2021

Our CLO compliance tests as of the most recent determination dates in October 2021 are as follows:

Cash Flow Triggers	CLO 10		CLO 11		CLO 12		CLO 13		CLO 14		CLO 15		CLO 16
Overcollateralization (1)
Current	126.98	%	121.95	%	118.87	%	119.76	%	119.76	%	120.85	%	121.21	%
Limit	125.98	%	120.95	%	117.87	%	118.76	%	118.76	%	119.85	%	120.21	%
Pass / Fail	Pass		Pass		Pass		Pass		Pass		Pass		Pass
Interest Coverage (2)
Current	350.15	%	400.85	%	302.20	%	391.59	%	368.75	%	334.86	%	472.24	%
Limit	120.00	%	120.00	%	120.00	%	120.00	%	120.00	%	120.00	%	120.00	%
Pass / Fail	Pass		Pass		Pass		Pass		Pass		Pass		Pass

(1) The overcollateralization ratio divides the total principal balance of all collateral in the CLO by the total principal balance of the bonds associated with the applicable ratio. To the extent an asset is considered a defaulted security, the asset’s principal balance for purposes of the overcollateralization test is the lesser of the asset’s market value or the principal balance of the defaulted asset multiplied by the asset’s recovery rate which is determined by the rating agencies. Rating downgrades of CLO collateral will generally not have a direct impact on the principal balance of a CLO asset for purposes of calculating the CLO overcollateralization test unless the rating downgrade is below a significantly low threshold (e.g. CCC-) as defined in each CLO vehicle.

(2) The interest coverage ratio divides interest income by interest expense for the classes senior to those retained by us.

Our CLO overcollateralization ratios as of the determination dates subsequent to each quarter are as follows:

Determination (1)	CLO 10		CLO 11		CLO 12		CLO 13		CLO 14		CLO 15		CLO 16
October 2021	126.98	%	121.95	%	118.87	%	119.76	%	119.76	%	120.85	%	121.21	%
July 2021	126.98	%	121.95	%	118.87	%	119.76	%	119.76	%	120.85	%	—
April 2021	126.98	%	121.95	%	118.87	%	119.76	%	119.76	%	—		—
January 2021	126.98	%	121.95	%	118.87	%	119.76	%	—		—		—
October 2020	126.98	%	121.95	%	118.87	%	119.76	%	—		—		—

(1) This table represents the quarterly trend of our overcollateralization ratio, however, the CLO determination dates are monthly and we were in compliance with this test for all periods presented.

The ratio will fluctuate based on the performance of the underlying assets, transfers of assets into the CLOs prior to the expiration of their respective replenishment dates, purchase or disposal of other investments, and loan payoffs. No payment due under the junior subordinated indentures may be paid if there is a default under any senior debt and the senior lender has sent notice to the trustee. The junior subordinated indentures are also cross-defaulted with each other.

Note 10 — Allowance for Loss-Sharing Obligations

Our allowance for loss-sharing obligations related to the Fannie Mae DUS program is as follows (in thousands):

	Three Months Ended September 30,				Nine Months Ended September 30,
	2021		2020		2021		2020
Beginning balance	$	65,645	$	73,220	$	64,303	$	34,648
Impact of adopting CECL - January 1, 2020		—		—		—		14,406
Provisions for loss sharing		(3,022)		(2,031)		(557)		22,538
Provisions reversal for loan repayments		(250)		(196)		(513)		(832)
Recoveries (charge-offs), net		455		167		(405)		400
Ending balance	$	62,828	$	71,160	$	62,828	$	71,160

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ARBOR REALTY TRUST, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

September 30, 2021

When a loan is sold under the Fannie Mae DUS program, we undertake an obligation to partially guarantee the performance of the loan. A liability is recognized for the fair value of the guarantee obligation undertaken for the non-contingent aspect of the guarantee and is removed only upon either the expiration or settlement of the guarantee. At September 30, 2021 and 2020, guarantee obligations of $34.4 million and $33.2 million, respectively, were included in the allowance for loss-sharing obligations.

In addition to and separately from the fair value of the guarantee, we estimate our allowance for loss-sharing under CECL over the contractual period in which we are exposed to credit risk. The current expected loss related to loss-sharing was based on a collective pooling basis with similar risk characteristics, a reasonable and supportable forecast and a reversion period based on our average historical losses through the remaining contractual term of the portfolio.

When we settle a loss under the DUS loss-sharing model, the net loss is charged-off against the previously recorded loss-sharing obligation. The settled loss is often net of any previously advanced principal and interest payments in accordance with the DUS program, which are reflected as reductions to the proceeds needed to settle losses. At September 30, 2021 and December 31, 2020, we had outstanding advances of less than $0.1 million and $0.1 million, respectively, which were netted against the allowance for loss-sharing obligations.

At September 30, 2021 and December 31, 2020, our allowance for loss-sharing obligations, associated with expected losses under CECL, was $28.4 million and $30.3 million, respectively, and represented 0.15% and 0.17%, respectively, of the Fannie Mae servicing portfolio.

At September 30, 2021 and December 31, 2020, the maximum quantifiable liability associated with our guarantees under the Fannie Mae DUS agreement was $3.62 billion and $3.41 billion, respectively. The maximum quantifiable liability is not representative of the actual loss we would incur. We would be liable for this amount only if all of the loans we service for Fannie Mae, for which we retain some risk of loss, were to default and all of the collateral underlying these loans was determined to be without value at the time of settlement.

Note 11 — Derivative Financial Instruments

We enter into derivative financial instruments to manage exposures that arise from business activities resulting in the receipt or payment of future known and uncertain cash amounts, the value of which are determined by interest rates and credit risk. We do not use these derivatives for speculative purposes, but are instead using them to manage our interest rate and credit risk exposure.

Agency Rate Lock and Forward Sale Commitments. We enter into contractual commitments to originate and sell mortgage loans at fixed prices with fixed expiration dates. The commitments become effective when the borrower “rate locks” a specified interest rate within time frames established by us. All potential borrowers are evaluated for creditworthiness prior to the extension of the commitment. Market risk arises if interest rates move adversely between the time of the rate lock by the borrower and the sale date of the loan to an investor. To mitigate the effect of the interest rate risk inherent in providing rate lock commitments to borrowers under the GSE programs, we enter into a forward sale commitment with the investor simultaneously with the rate lock commitment with the borrower. The forward sale contract locks in an interest rate and price for the sale of the loan. The terms of the contract with the investor and the rate lock with the borrower are matched in substantially all respects, with the objective of eliminating interest rate risk to the extent practical. Sale commitments with the investors have an expiration date that is longer than our related commitments to the borrower to allow, among other things, for closing of the loan and processing of paperwork to deliver the loan into the sale commitment.

These commitments meet the definition of a derivative and are recorded at fair value, including the effects of interest rate movements which are reflected as a component of loss on derivative instruments, net in the consolidated statements of income. The estimated fair value of rate lock commitments also includes the fair value of the expected net cash flows associated with the servicing of the loan which is recorded as income from MSRs in the consolidated statements of income. During the three and nine months ended September 30, 2021, we recorded net losses of $8.6 million and $7.5 million, respectively, from changes in the fair value of these derivatives and $32.5 million and $95.7 million, respectively, of income from MSRs. During the three and nine months ended September 30, 2020, we recorded a net loss of $0.9 million and a net gain of $3.3 million, respectively, from changes in the fair value of these derivatives and $42.4 million and $96.7 million, respectively, of income from MSRs. The gains and losses are recorded in loss on derivative instruments, net on our consolidated statements of income. See Note 12 for details.

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ARBOR REALTY TRUST, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

September 30, 2021

Interest Rate and Credit Default Swaps (“Swaps”). We enter into over-the-counter swaps to hedge our interest rate and credit risk exposure inherent in (1) our held-for-sale Agency Business Private Label loans from the time the loans are rate locked until sale and securitization, and (2) our Agency Business SFR – fixed rate loans from the time the loans are originated until the time they can be financed with match term fixed rate securitized debt. Our interest rate swaps typically have a three-month maturity and are tied to the five-year and ten-year swap rates. Our credit default swaps typically have a five-year maturity, are tied to the credit spreads of the underlying bond issuers and we typically hold our position until we price our Private Label loan securitizations. The Swaps do not meet the criteria for hedge accounting, are cleared by a central clearing house and variation margin payments, made in cash, are treated as a legal settlement of the derivative itself as opposed to a pledge of collateral.

During the three months ended September 30, 2021, we recorded realized and unrealized gains of $5.4 million and $1.9 million, respectively, to our Agency Business related to our Swaps. During the nine months ended September 30, 2021, we recorded realized losses of $1.1 million and unrealized gains of $1.5 million to our Agency Business related to Swaps. During the three months ended September 30, 2020, we recorded realized losses of $0.2 million and unrealized gains of $0.4 million to our Structured Business and realized losses of $0.1 million and unrealized gains of $0.1 million to our Agency Business related to our Swaps. During the nine months ended September 30, 2020, we recorded realized losses of $3.0 million and unrealized losses of $0.1 million to our Structured Business and realized losses of $57.3 million and unrealized losses of $1.5 million to our Agency Business related to our Swaps. The realized and unrealized gains and losses are recorded in loss on derivative instruments, net on our consolidated statements of income.

A summary of our non-qualifying derivative financial instruments is as follows ($ in thousands):

	September 30, 2021
					Fair Value
		Notional		Balance Sheet	Derivative		Derivative
Derivative	Count	Value		Location	Assets		Liabilities
Agency Business
Rate Lock Commitments	12	$	68,797	Other Assets/Other Liabilities	$	707	$	(1,369)
Forward Sale Commitments	45		527,480	Other Assets/Other Liabilities		1,489		(6,884)
Swaps	1,945		194,500			—		—
		$	790,777		$	2,196	$	(8,253)

	December 31, 2020
Agency Business
Rate Lock Commitments	7	$	136,354	Other Assets/Other Liabilities	$	1,967	$	(231)
Forward Sale Commitments	114		1,048,763	Other Assets/Other Liabilities		1,925		(990)
Swaps	453		45,300			—		—
		$	1,230,417		$	3,892	$	(1,221)

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ARBOR REALTY TRUST, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

September 30, 2021

Note 12 — Fair Value

Fair value estimates are dependent upon subjective assumptions and involve significant uncertainties resulting in variability in estimates with changes in assumptions. The following table summarizes the principal amounts, carrying values and the estimated fair values of our financial instruments (in thousands):

	September 30, 2021						December 31, 2020
	Principal /		Carrying		Estimated		Principal /		Carrying		Estimated
	Notional Amount		Value		Fair Value		Notional Amount		Value		Fair Value
Financial assets:
Loans and investments, net	$	9,169,007	$	8,993,790	$	9,202,924	$	5,475,082	$	5,285,868	$	5,428,141
Loans held-for-sale, net		1,259,287		1,274,234		1,309,556		968,595		986,919		1,007,294
Capitalized mortgage servicing rights, net		n/a		417,283		473,679		n/a		379,974		415,495
Securities held-to-maturity, net		167,005		112,735		122,131		140,124		95,524		94,128
Derivative financial instruments		77,242		2,196		2,196		865,975		3,892		3,892
Financial liabilities:
Credit and repurchase facilities	$	3,405,232	$	3,399,711	$	3,399,579	$	2,238,722	$	2,234,883	$	2,235,668
Collateralized loan obligations		4,743,580		4,715,804		4,744,351		2,532,343		2,517,309		2,495,195
Senior unsecured notes		1,115,750		1,102,578		1,134,816		670,750		662,843		670,117
Convertible senior unsecured notes, net		264,000		258,001		296,472		278,300		267,973		280,636
Junior subordinated notes		154,336		142,192		101,169		154,336		141,656		99,594
Derivative financial instruments		519,035		8,253		8,253		319,142		1,221		1,221

Assets and liabilities disclosed at fair value are categorized based upon the level of judgment associated with the inputs used to measure their fair value. Determining which category an asset or liability falls within the hierarchy requires judgment and we evaluate our hierarchy disclosures each quarter. Hierarchical levels directly related to the amount of subjectivity associated with the inputs to fair valuation of these assets and liabilities are as follows:

Level 1—Inputs are unadjusted and quoted prices exist in active markets for identical assets or liabilities, such as government, agency and equity securities.

Level 2—Inputs (other than quoted prices included in Level 1) are observable for the asset or liability through correlation with market data. Level 2 inputs may include quoted market prices for a similar asset or liability, interest rates and credit risk. Examples include non-government securities, certain mortgage and asset-backed securities, certain corporate debt and certain derivative instruments.

Level 3—Inputs reflect our best estimate of what market participants would use in pricing the asset or liability and are based on significant unobservable inputs that require a considerable amount of judgment and assumptions. Examples include certain mortgage and asset-backed securities, certain corporate debt and certain derivative instruments.

The following is a description of the valuation techniques used to measure fair value and the general classification of these instruments pursuant to the fair value hierarchy.

Loans and investments, net. Fair values of loans and investments that are not impaired are estimated using inputs based on direct capitalization rate and discounted cash flow methodologies using discount rates, which, in our opinion, best reflect current market interest rates that would be offered for loans with similar characteristics and credit quality (Level 3). Fair values of impaired loans and investments are estimated using inputs that require significant judgments, which include assumptions regarding discount rates, capitalization rates, creditworthiness of major tenants, occupancy rates, availability of financing, exit plans and other factors (Level 3).

30

ARBOR REALTY TRUST, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

September 30, 2021

Loans held-for-sale, net. Consists of originated loans that are generally expected to be transferred or sold within 60 days to 180 days of loan funding, and are valued using pricing models that incorporate observable inputs from current market assumptions or a hypothetical securitization model utilizing observable market data from recent securitization spreads and observable pricing of loans with similar characteristics (Level 2). Fair value includes the fair value allocated to the associated future MSRs and is calculated pursuant to the valuation techniques described below for capitalized mortgage servicing rights, net (Level 3).

Capitalized mortgage servicing rights, net. Fair values are estimated using inputs based on discounted future net cash flow methodology (Level 3). The fair value of MSRs carried at amortized cost are estimated using a process that involves the use of independent third-party valuation experts, supported by commercially available discounted cash flow models and analysis of current market data. The key inputs used in estimating fair value include the contractually specified servicing fees, prepayment speed of the underlying loans, discount rate, annual per loan cost to service loans, delinquency rates, late charges and other economic factors.

Securities held-to-maturity, net. Fair values are approximated using inputs based on current market quotes received from financial sources that trade such securities and are based on prevailing market data and, in some cases, are derived from third-party proprietary models based on well recognized financial principles and reasonable estimates about relevant future market conditions (Level 3).

Derivative financial instruments. Fair values of rate lock and forward sale commitments are estimated using valuation techniques, which include internally-developed models developed based on changes in the U.S. Treasury rate and other observable market data (Level 2). The fair value of rate lock commitments includes the fair value of the expected net cash flows associated with the servicing of the loans, see capitalized mortgage servicing rights, net above for details on the applicable valuation technique (Level 3). We also consider the impact of counterparty non-performance risk when measuring the fair value of these derivatives. Given the credit quality of our counterparties, the short duration of interest rate lock commitments and forward sale contracts, and our historical experience, the risk of nonperformance by our counterparties is not significant.

Credit and repurchase facilities. Fair values for credit and repurchase facilities of the Structured Business are estimated using discounted cash flow methodology, using discount rates, which, in our opinion, best reflect current market interest rates for financing with similar characteristics and credit quality (Level 3). The majority of our credit and repurchase facilities for the Agency Business bear interest at rates that are similar to those available in the market currently and fair values are estimated using Level 2 inputs. For these facilities, the fair values approximate their carrying values.

Collateralized loan obligations and junior subordinated notes. Fair values are estimated based on broker quotations, representing the discounted expected future cash flows at a yield that reflects current market interest rates and credit spreads (Level 3).

Senior unsecured notes. Fair values are estimated at current market quotes received from active markets when available (Level 1). If quotes from active markets are unavailable, then the fair values are estimated utilizing current market quotes received from inactive markets (Level 2).

Convertible senior unsecured notes, net. Fair values are estimated using current market quotes received from inactive markets (Level 2).

We measure certain financial assets and financial liabilities at fair value on a recurring basis. The fair values of these financial assets and liabilities are determined using the following input levels as of September 30, 2021 (in thousands):

					Fair Value Measurements Using Fair
	Carrying				Value Hierarchy
	Value		Fair Value		Level 1		Level 2		Level 3
Financial assets:
Derivative financial instruments	$	2,196	$	2,196	$	—	$	1,489	$	707
Financial liabilities:
Derivative financial instruments	$	8,253	$	8,253	$	—	$	8,253	$	—

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ARBOR REALTY TRUST, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

September 30, 2021

We measure certain financial and non-financial assets at fair value on a nonrecurring basis. The fair values of these financial and non-financial assets, if applicable, are determined using the following input levels as of September 30, 2021 (in thousands):

					Fair Value Measurements Using Fair
	Net Carrying				Value Hierarchy
	Value		Fair Value		Level 1		Level 2		Level 3
Financial assets:
Impaired loans, net (1)	$	66,126	$	66,126	$	—	$	—	$	66,126

(1) We had an allowance for credit losses of $94.9 million relating to eight impaired loans with an aggregate carrying value, before loan loss reserves, of $161.0 million at September 30, 2021.

Loan impairment assessments. Loans held for investment are intended to be held to maturity and, accordingly, are carried at cost, net of unamortized loan origination costs and fees, loan purchase discounts, and net of the allowance for credit losses, when such loan or investment is deemed to be impaired. We consider a loan impaired when, based upon current information, it is probable that we will be unable to collect all amounts due for both principal and interest according to the contractual terms of the loan agreement. We evaluate our loans to determine if the value of the underlying collateral securing the impaired loan is less than the net carrying value of the loan, which may result in an allowance and corresponding charge to the provision for credit losses. These valuations require significant judgments, which include assumptions regarding capitalization and discount rates, revenue growth rates, creditworthiness of major tenants, occupancy rates, availability of financing, exit plan and other factors. The table above and below includes all impaired loans, regardless of the period in which the impairment was recognized.

Quantitative information about Level 3 fair value measurements at September 30, 2021 is as follows ($ in thousands):

			Valuation
	Fair Value		Techniques	Significant Unobservable Inputs
Financial assets:
Impaired loans:
Land	$	50,000	Discounted cash flows	Discount rate	21.50	%
				Revenue growth rate	3.00	%
				Discount rate	10.15	%
Retail		15,530	Discounted cash flows	Capitalization rate	9.25	%
				Revenue growth rate	1.68	%
				Discount rate	11.00	%
Office		596	Discounted cash flows	Capitalization rate	9.00	%
				Revenue growth rate	2.50	%
Derivative financial instruments:
Rate lock commitments		707	Discounted cash flows	W/A discount rate	9.56	%

32

ARBOR REALTY TRUST, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

September 30, 2021

The derivative financial instruments using Level 3 inputs are outstanding for short periods of time (generally less than 60 days). A roll-forward of Level 3 derivative instruments is as follows (in thousands):

	Fair Value Measurements Using				Fair Value Measurements Using
	Significant Unobservable Inputs				Significant Unobservable Inputs
	Three Months Ended September 30,				Nine Months Ended September 30,
	2021		2020		2021		2020
Derivative assets and liabilities, net
Beginning balance	$	124	$	549	$	1,967	$	1,066
Settlements		(23,412)		(40,746)		(81,486)		(95,614)
Realized gains recorded in earnings		23,288		40,197		79,519		94,548
Unrealized gains recorded in earnings		707		2,160		707		2,160
Ending balance	$	707	$	2,160	$	707	$	2,160

The components of fair value and other relevant information associated with our rate lock commitments, forward sales commitments and the estimated fair value of cash flows from servicing on loans held-for-sale are as follows (in thousands):

	Notional/		Fair Value of		Interest Rate		Total Fair Value
September 30, 2021	Principal Amount		Servicing Rights		Movement Effect		Adjustment
Rate lock commitments	$	68,797	$	707	$	(1,369)	$	(662)
Forward sale commitments		527,480		—		1,369		1,369
Loans held-for-sale, net (1)		1,259,287		19,151		—		19,151
Total			$	19,858	$	—	$	19,858

(1) Loans held-for-sale, net are recorded at the lower of cost or market on an aggregate basis and includes fair value adjustments related to estimated cash flows from MSRs.

We measure certain assets and liabilities for which fair value is only disclosed. The fair value of these assets and liabilities are determined using the following input levels as of September 30, 2021 (in thousands):

					Fair Value Measurements Using Fair Value Hierarchy
	Carrying Value		Fair Value		Level 1		Level 2		Level 3
Financial assets:
Loans and investments, net	$	8,993,790	$	9,202,924	$	—	$	—	$	9,202,924
Loans held-for-sale, net		1,274,234		1,309,556		—		1,290,405		19,151
Capitalized mortgage servicing rights, net		417,283		473,679		—		—		473,679
Securities held-to-maturity, net		112,735		122,131		—		—		122,131
Financial liabilities:
Credit and repurchase facilities	$	3,399,711	$	3,399,579	$	—	$	1,102,486	$	2,297,093
Collateralized loan obligations		4,715,804		4,744,351		—		—		4,744,351
Senior unsecured notes		1,102,578		1,134,816		1,134,816		—		—
Convertible senior unsecured notes, net		258,001		296,472		—		296,472		—
Junior subordinated notes		142,192		101,169		—		—		101,169

Note 13 — Commitments and Contingencies

Impact of COVID-19. The magnitude and duration of COVID-19 and its impact on our business and on our borrowers is uncertain and will mostly depend on future events, which cannot be predicted. As this pandemic continues and if economic conditions worsen, it may have long-term impacts on our financial position, results of operations and cash flows. See Note 2 and Item 1A. Risk Factors of our 2020 Annual Report for further discussion of COVID-19.

33

ARBOR REALTY TRUST, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

September 30, 2021

Agency Business Commitments. Our Agency Business is subject to supervision by certain regulatory agencies. Among other things, these agencies require us to meet certain minimum net worth, operational liquidity and restricted liquidity collateral requirements, and compliance with reporting requirements. Our adjusted net worth and liquidity required by the agencies for all periods presented exceeded these requirements.

As of September 30, 2021, we were required to maintain at least $19.0 million of liquid assets in one of our subsidiaries to meet our operational liquidity requirements for Fannie Mae and we had operational liquidity in excess of this requirement.

We are generally required to share the risk of any losses associated with loans sold under the Fannie Mae DUS program and are required to secure this obligation by assigning restricted cash balances and/or a letter of credit to Fannie Mae. The amount of collateral required by Fannie Mae is a formulaic calculation at the loan level by a Fannie Mae assigned tier, which considers the loan balance, risk level of the loan, age of the loan and level of risk-sharing. Fannie Mae requires restricted liquidity for Tier 2 loans of 75 basis points, 15 basis points for Tier 3 loans and 5 basis points for Tier 4 loans, which is funded over a 48-month period that begins upon delivery of the loan to Fannie Mae. A significant portion of our Fannie Mae DUS serviced loans for which we have risk sharing are Tier 2 loans. As of September 30, 2021, we met the restricted liquidity requirement with a $45.0 million letter of credit and $17.0 million of cash collateral.

As of September 30, 2021, reserve requirements for the Fannie Mae DUS loan portfolio will require us to fund $46.1 million in additional restricted liquidity over the next 48 months, assuming no further principal paydowns, prepayments, or defaults within our at-risk portfolio. Fannie Mae periodically reassesses these collateral requirements and may make changes to these requirements in the future. We generate sufficient cash flow from our operations to meet these capital standards and do not expect any changes to have a material impact on our future operations; however, future changes to collateral requirements may adversely impact our available cash.

We are subject to various capital requirements in connection with seller/servicer agreements that we have entered into with secondary market investors. Failure to maintain minimum capital requirements could result in our inability to originate and service loans for the respective investor and, therefore, could have a direct material effect on our consolidated financial statements. As of September 30, 2021, we met all of Fannie Mae’s quarterly capital requirements and our Fannie Mae adjusted net worth was in excess of the required net worth. We are not subject to capital requirements on a quarterly basis for Ginnie Mae and FHA, as requirements for these investors are only required on an annual basis.

As an approved designated seller/servicer under Freddie Mac's SBL program, we are required to post collateral to ensure that we are able to meet certain purchase and loss obligations required by this program. Under the SBL program, we are required to post collateral equal to $5.0 million, which is satisfied with a $5.0 million letter of credit.

We enter into contractual commitments with borrowers providing rate lock commitments while simultaneously entering into forward sale commitments with investors. These commitments are outstanding for short periods of time (generally less than 60 days) and are described in more detail in Note 11 and Note 12.

Debt Obligations and Operating Leases. As of September 30, 2021, the maturities of our debt obligations and the minimum annual operating lease payments under leases with a term in excess of one year are as follows (in thousands):

			Minimum Annual
	Debt		Operating Lease
Year	Obligations		Payments		Total
2021 (three months ending December 31, 2021)	$	1,426,798	$	2,127	$	1,428,925
2022		2,991,831		8,257		3,000,088
2023		1,652,679		8,031		1,660,710
2024		1,178,993		7,926		1,186,919
2025		497,701		7,978		505,679
2026		1,473,359		8,282		1,481,641
Thereafter		461,537		26,098		487,635
Total	$	9,682,898	$	68,699	$	9,751,597

34

ARBOR REALTY TRUST, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

September 30, 2021

During the three months ended September 30, 2021 and 2020, we recorded lease expense of $2.4 million and $1.5 million, respectively, and during the nine months ended September 30, 2021 and 2020, we recorded lease expense of $7.0 million and $4.6 million, respectively.

Unfunded Commitments. In accordance with certain structured loans and investments, we have outstanding unfunded commitments of $638.1 million as of September 30, 2021 that we are obligated to fund as borrowers meet certain requirements. Specific requirements include, but are not limited to, property renovations, building construction and conversions based on criteria met by the borrower in accordance with the loan agreements.

Litigation. We are currently neither subject to any material litigation nor, to the best of our knowledge, threatened by any material litigation other than the following:

In June 2011, three related lawsuits were filed by the Extended Stay Litigation Trust (the “Trust”), a post-bankruptcy litigation trust alleged to have standing to pursue claims that previously had been held by Extended Stay, Inc. and the Homestead Village L.L.C. family of companies (together “ESI”) (formerly Chapter 11 debtors, together the “Debtors”) that have emerged from bankruptcy. Two of the lawsuits were filed in the U.S. Bankruptcy Court for the Southern District of New York, and the third in the Supreme Court of the State of New York, New York County. There were 73 defendants in the three lawsuits, including 55 corporate and partnership entities and 18 individuals. A subsidiary of ours and certain other entities that are affiliates of ours are included as defendants. The New York State Court action was removed to the Bankruptcy Court. Currently, there is just a single case in Bankruptcy Court.

The lawsuits all alleged, as a factual basis and background, certain facts surrounding the June 2007 leveraged buyout of ESI from affiliates of Blackstone Capital. Our subsidiary, Arbor ESH II, LLC, had a $115.0 million investment in the Series A1 Preferred Units of a holding company of Extended Stay, Inc. The New York State Court action and one of the two federal court actions named as defendants Arbor ESH II, LLC, Arbor Commercial Mortgage, LLC (“ACM”), and ABT-ESI LLC, an entity in which we have a membership interest, among the broad group of defendants. These two actions were commenced by substantially identical complaints. The defendants are alleged, among other things, to have breached fiduciary and contractual duties by causing or allowing the Debtors to pay illegal dividends or other improper distributions of value at a time when the Debtors were insolvent. The Trust also alleges that the defendants aided and abetted, induced, or participated in breaches of fiduciary duty, waste, and unjust enrichment (“Fiduciary Duty Claims”) and name a director of ours, and a former general counsel of ACM, each of whom had served on the Board of Directors of ESI for a period of time. We are defending these two defendants and paying the costs of such defense. On the basis of the foregoing allegations, the Trust has asserted claims under a number of common law theories, seeking the return of assets transferred by the Debtors prior to the Debtors’ bankruptcy filing.

In the third action, filed in Bankruptcy Court, the same plaintiff, the Trust, named ACM and ABT-ESI LLC, together with a number of other defendants, and asserts claims, including constructive and fraudulent conveyance claims, under state and federal statutes, as well as a claim under the Federal Debt Collection Procedure Act.

In June 2013, the Trust filed a motion to amend the lawsuits, to, among other things, (i) consolidate the lawsuits into one lawsuit, (ii) remove 47 defendants from the lawsuits, none of whom are related to us, so that there are 26 remaining defendants, including 16 corporate and partnership entities and 10 individuals, and (iii) reduce the counts within the lawsuits from over 100 down to 17.

The remaining counts in the Trust’s amended complaint against our affiliates are principally state law claims for breach of fiduciary duties, waste, unlawful dividends and unjust enrichment, and claims under the Bankruptcy Code for avoidance and recovery actions, among others. The Bankruptcy Court granted the motion to amend and the amended complaint has been filed. The amended complaint seeks approximately $139.0 million in the aggregate, plus interest from the date of the alleged unlawful transfers, from director designees, portions of which are also sought from our affiliates as well as from unaffiliated defendants.

We moved to dismiss the referenced remaining actions in December 2013.

35

ARBOR REALTY TRUST, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

September 30, 2021

After supplemental briefing and multiple adjourned conferences, in August 2020, the Court issued a decision granting our motion to dismiss in part, dismissing 9 of the 17 counts. The Court permitted claims against director designees to proceed on theories of authorization of illegal dividends and breach of fiduciary duty. The Court permitted claims against the defendant entities, including our affiliated entities, to proceed on theories of constructive fraudulent transfer and fraudulent transfer under state and federal law. Moreover, the Court affirmatively dismissed four counts against the defendant entities to the extent they are based on distributions from certain so-called LIBOR Floor Certificates. According to the amended complaint, the total LIBOR Floor Certificate transfers were $74.0 million in value. As a result, with what remains of the amended complaint, total possible liability against the affiliated entities has correspondingly fallen, whereas total possible liability against the director designees remains at approximately $139.0 million.

The parties have stipulated to a schedule for discovery and we intend to vigorously defend against the remaining claims. We have not made a loss accrual for this litigation because we believe that it is not probable that a loss has been incurred and an amount cannot be reasonably estimated.

Due to Borrowers. Due to borrowers represents borrowers’ funds held by us to fund certain expenditures or to be released at our discretion upon the occurrence of certain pre-specified events, and to serve as additional collateral for borrowers’ loans. While retained, these balances earn interest in accordance with the specific loan terms they are associated with.

Note 14 — Variable Interest Entities

Our involvement with VIEs primarily affects our financial performance and cash flows through amounts recorded in interest income, interest expense, provision for loan losses and through activity associated with our derivative instruments.

Consolidated VIEs. We have determined that our operating partnership, ARLP, and our CLO entities, which we consolidate, are VIEs. ARLP is already consolidated in our financial statements, therefore, the identification of this entity as a VIE had no impact on our consolidated financial statements.

Our CLO consolidated entities invest in real estate and real estate-related securities and are financed by the issuance of debt securities. We, or one of our affiliates, are named collateral manager, servicer, and special servicer for all collateral assets held in CLOs, which we believe gives us the power to direct the most significant economic activities of those entities. We also have exposure to losses to the extent of our equity interests and also have rights to waterfall payments in excess of required payments to bond investors. As a result of consolidation, equity interests have been eliminated, and the consolidated balance sheets reflect both the assets held and debt issued to third parties by the CLOs, prior to the unwind. Our operating results and cash flows include the gross asset and liability amounts related to the CLOs as opposed to our net economic interests in those entities.

The assets and liabilities related to these consolidated CLOs are as follows (in thousands):

	September 30, 2021		December 31, 2020
Assets:
Restricted cash	$	552,705	$	188,226
Loans and investments, net		5,119,520		2,923,634
Other assets		34,328		22,587
Total assets	$	5,706,553	$	3,134,447
Liabilities:
Collateralized loan obligations	$	4,715,804	$	2,517,309
Other liabilities		5,722		2,755
Total liabilities	$	4,721,526	$	2,520,064

Assets held by the CLOs are restricted and can only be used to settle obligations of the CLOs. The liabilities of the CLOs are non-recourse to us and can only be satisfied from each respective asset pool. See Note 9 for details. We are not obligated to provide, have not provided, and do not intend to provide financial support to any of the consolidated CLOs.

36

ARBOR REALTY TRUST, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

September 30, 2021

Unconsolidated VIEs. We determined that we are not the primary beneficiary of 29 VIEs in which we have a variable interest as of September 30, 2021 because we do not have the ability to direct the activities of the VIEs that most significantly impact each entity’s economic performance.

A summary of our variable interests in identified VIEs, of which we are not the primary beneficiary, as of September 30, 2021 is as follows (in thousands):

Type	Carrying Amount (1)
Loans	$	482,495
APL certificates		63,727
B Piece bonds		50,769
Equity investments		14,644
Agency interest only strips		648
Total	$	612,283

(1) Represents the carrying amount of loans and investments before reserves. At September 30, 2021, $130.0 million of loans to VIEs had corresponding specific loan loss reserves of $79.4 million. The maximum loss exposure as of September 30, 2021 would not exceed the carrying amount of our investment.

These unconsolidated VIEs have exposure to real estate debt of approximately $4.01 billion at September 30, 2021.

Note 15 — Equity

Preferred Stock. In August 2021, we completed a public offering of 5,750,000 shares of 6.25% Series E cumulative redeemable preferred stock with a liquidation preference of $25.00 per share, generating net proceeds of approximately $139.1 million after deducting the underwriting discount and other offering expenses. The proceeds were used to make investments related to our business and for general corporate purposes. The Series E preferred stock is not redeemable by us prior to August 11, 2026 except under circumstances intended to preserve our qualification as a REIT and except upon the occurrence of a change of control.

In June 2021, we completed a public offering of 9,200,000 shares of 6.375% Series D cumulative redeemable preferred stock with a liquidation preference of $25.00 per share, generating net proceeds of approximately $222.6 million after deducting the underwriting discount and other offering expenses. We used $93.3 million of the proceeds to fully redeem our Series A, B and C preferred stock. The Series D preferred stock is not redeemable by us prior to June 2, 2026 except under circumstances intended to preserve our qualification as a REIT and except upon the occurrence of a change of control.

Subsequent Event. In October 2021, we completed a public offering of 8,050,000 shares of 6.25% Series F fixed-to-floating rate cumulative redeemable preferred stock with a liquidation preference of $25.00 per share, generating net proceeds of approximately $194.8 million after deducting the underwriting discount and other offering expenses. Holders of the Series F preferred stock will be entitled to receive cumulative dividends at a fixed rate equal to 6.25% from the date of issuance through October 29, 2026 and at a floating rate equal to a benchmark rate (which is expected to be the three-month SOFR) plus a spread of 5.442% per annum beginning October 30, 2026, provided that in no event should the rate be lower than 6.125%. The proceeds received are being used to make investments related to our business and for general corporate purposes. The Series F preferred stock is not redeemable by us prior to October 12, 2026 except under circumstances intended to preserve our qualification as a REIT and except upon the occurrence of a change of control.

Common Stock. In August 2021, we amended the equity distribution agreement with JMP Securities LLC (“JMP”). In accordance with the terms of the amendment, we may offer and sell up to 20,000,000 shares of our common stock in “At-The-Market” equity offerings through JMP by means of ordinary brokers’ transactions or otherwise at market prices prevailing at the time of sale, or at negotiated prices. During the nine months ended September 30, 2021, we sold 7,222,879 shares of our common stock for net proceeds of $123.8 million. We used $21.1 million of the net proceeds to redeem OP Units from two of ACM’s members for their membership interest in ACM. As of September 30, 2021, we had 19,200,000 shares available under the amended agreement.

37

ARBOR REALTY TRUST, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

September 30, 2021

In June 2021, we completed a public offering in which we sold 6,000,000 shares of our common stock for $18.46 per share and received net proceeds of $110.6 million after deducting the underwriter's discount and other offering expenses. The proceeds were used to make investments related to our business and for general corporate purposes. We also used $11.1 million of the net proceeds from this offering to purchase 600,000 shares of our common stock from ACM at the same price the underwriters paid to purchase the shares.
​

In March 2021, we completed a public offering in which we sold 7,000,000 shares of our common stock for $15.48 per share and received net proceeds of $108.2 million after deducting the underwriter's discount and other offering expenses. The proceeds were used to make investments related to our business and for general corporate purposes. We also used $12.4 million of the net proceeds from this offering to purchase 800,000 shares of our common stock from certain executive officers of ours, ACM and an estate planning family vehicle established by our chief executive officer at the same price the underwriters paid to purchase the shares.

Noncontrolling Interest. Noncontrolling interest relates to the operating partnership units (“OP Units”) issued to satisfy a portion of the purchase price in connection with the acquisition of the agency platform of ACM in 2016 (the “Acquisition”). Each of these OP Units are paired with one share of our special voting preferred shares having a par value of $0.01 per share and is entitled to one vote each on any matter submitted for stockholder approval. The OP Units are entitled to receive distributions if and when our Board of Directors authorizes and declares common stock distributions. The OP Units are also redeemable for cash, or at our option, for shares of our common stock on a one-for-one basis. At September 30, 2021, there were 16,325,095 OP Units outstanding, which represented 10.2% of the voting power of our outstanding stock.

Distributions. Dividends declared (on a per share basis) during the nine months ended September 30, 2021 are as follows:

Common Stock			Preferred Stock
				Dividend (1)
Declaration Date	Dividend		Declaration Date	Series A		Series B		Series C		Series D		Series E
February 17, 2021	$	0.33	February 1, 2021	$	0.515625	$	0.484375	$	0.53125		N/A	N/A
May 5, 2021	$	0.34	April 30, 2021	$	0.515625	$	0.484375	$	0.53125		N/A	N/A
July 28, 2021	$	0.35	July 2, 2021		N/A		N/A		N/A	$	0.256771	N/A

(1) The dividend declared on July 2, 2021 was for June 2, 2021 through July 29, 2021, the dividend declared on April 30, 2021 was for March 1, 2021 through May 31, 2021 and the dividend declared on February 1, 2021 was for December 1, 2020 through February 28, 2021. As mentioned above, we fully redeemed our Series A, B and C preferred stock in June 2021.
​

Common Stock – On October 27, 2021, the Board of Directors declared a cash dividend of $0.36 per share of common stock. The dividend is payable on November 30, 2021 to common stockholders of record as of the close of business on November 15, 2021.

Preferred Stock – On October 1, 2021, the Board of Directors declared a cash dividend of $0.3984375 per share of Series D preferred stock and a cash dividend of $0.34288 per share of Series E preferred stock. The Series D preferred stock dividend reflects accrued dividends from July 30, 2021 through October 29, 2021. The Series E preferred stock dividend reflects accrued dividends from August 11, 2021 (the date of issuance) through October 29, 2021. The dividends are payable on November 1, 2021 to preferred stockholders of record on October 15, 2021.

Deferred Compensation. During the nine months ended September 30, 2021, we issued 351,807 shares of restricted common stock to employees under the 2020 Amended Omnibus Stock Incentive Plan (the “2020 Plan”) with a total grant date fair value of $5.8 million, of which: (1) 115,047 shares with a grant date fair value of $1.9 million were fully vested on the grant date; (2) 99,952 shares with a grant date fair value of $1.7 million will vest on the first anniversary of the grant date; (3) 87,265 shares with a grant date fair value of $1.4 million will vest on the second anniversary of the grant date; (4) 25,479 shares with a grant date fair value of $0.4 million will vest on the third anniversary of the grant date; and (5) 24,064 shares with a grant date fair value of $0.4 million will vest on the fourth anniversary of the grant date. We also issued 27,864 shares of fully vested common stock to the independent members of the Board of Directors under the 2020 Plan with a grant date fair value of $0.4 million.

During the first quarter of 2021, 448,980 shares of performance-based restricted stock units previously granted to our chief executive officer fully vested and were net settled for 229,083 common shares.

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ARBOR REALTY TRUST, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

September 30, 2021

During the nine months ended September 30, 2021, we withheld 183,144 shares from the net settlement of restricted common stock by employees for payment of withholding taxes on shares that vested.

In April 2021, we entered into a second amended and restated annual incentive agreement (the “2021 annual incentive agreement”) with our chief executive officer, effective January 1, 2021. The terms of the 2021 annual incentive agreement provide for: (1) an annual base salary of $1.2 million; (2) an annual cash payment of $0.8 million; and (3) annual performance cash bonus target opportunities of $2.9 million at target performance, $1.5 million at threshold performance and $4.4 million at maximum performance, with the opportunity to earn an additional $0.7 million annually in the event of extraordinary performance with respect to corporate capital growth goals. The 2021 annual incentive agreement also provides for: (1) a grant with a value of $3.0 million to be made in July 2021, dependent on reaching certain goals relating to the integration of the Acquisition (“Acquisition Related Grant”), which represents the last Acquisition Related Grant; and (2) at our chief executive officer’s option, to be exercised annually for the remainder of the term of the 2021 annual incentive agreement, either (i) a grant with a value of $3.0 million, which will vest in full three years from the date of the grant (“Time Based Vesting Equity Award”) or (ii) a performance based award of restricted stock (“Performance-Based TSR Equity Award”) with an annual value at grant of $12.0 million, relating to our total stockholder return objectives. The Acquisition Related Grant will vest in full on the third anniversary of the grant date. The Performance-Based TSR Equity Award will vest, in whole or in part, based on the attainment of total stockholder return goals over a five-year period.

In April 2021, our chief executive officer elected to receive the Time Based Vesting Equity Award option in connection with the 2021 annual incentive agreement; therefore, we granted our chief executive officer 184,729 shares of restricted common stock with a grant date fair value of $3.1 million that vest in full in April 2024. In July 2021, we granted our chief executive officer 165,746 shares of performance based restricted stock with a grant date fair value of $3.0 million in connection with the Acquisition Related Grant, which vest in full in July 2024. In addition, 294,985 shares of performance-based restricted stock granted in 2018 vested in the third quarter of 2021, which were net settled for 150,530 common shares.

Earnings Per Share. Basic EPS is calculated by dividing net income (loss) attributable to common stockholders by the weighted average number of shares of common stock outstanding during each period inclusive of unvested restricted stock with full dividend participation rights. Diluted EPS is calculated by dividing net income (loss) by the weighted average number of shares of common stock outstanding, plus the additional dilutive effect of common stock equivalents during each period using the treasury stock method. Our common stock equivalents include the weighted average dilutive effect of performance-based restricted stock units granted to our chief executive officer, OP Units and convertible senior unsecured notes.

A reconciliation of the numerator and denominator of our basic and diluted EPS computations ($ in thousands, except share and per share data) is as follows:

	Three Months Ended September 30,
	2021				2020
	Basic		Diluted		Basic		Diluted
Net income attributable to common stockholders (1)	$	72,804	$	72,804	$	81,997	$	81,997
Net income attributable to noncontrolling interest (2)		—		8,347		—		13,836
Net income attributable to common stockholders and noncontrolling interest	$	72,804	$	81,151	$	81,997	$	95,833
Weighted average shares outstanding		142,624,300		142,624,300		113,766,446		113,766,446
Dilutive effect of OP Units (2)		—		16,351,643		—		19,196,660
Dilutive effect of restricted stock units (3)		—		940,045		—		1,029,668
Dilutive effect of convertible notes (4)		—		354,917		—		4,313
Weighted average shares outstanding		142,624,300		160,270,905		113,766,446		133,997,087
Net income per common share (1)	$	0.51	$	0.51	$	0.72	$	0.72

39

ARBOR REALTY TRUST, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

September 30, 2021

	Nine Months Ended September 30,
	2021				2020
	Basic		Diluted		Basic		Diluted
Net income attributable to common stockholders (1)	$	211,409	$	211,409	$	66,778	$	66,778
Net income attributable to noncontrolling interest (2)		—		26,806		—		11,012
Net income attributable to common stockholders and noncontrolling interest	$	211,409	$	238,215	$	66,778	$	77,790
Weighted average shares outstanding		134,437,663		134,437,663		111,775,436		111,775,436
Dilutive effect of OP Units (2)		—		16,985,073		—		19,993,983
Dilutive effect of restricted stock units (3)		—		927,542		—		600,648
Dilutive effect of convertible notes (4)		—		341,183		—		31,248
Weighted average shares outstanding		134,437,663		152,691,461		111,775,436		132,401,315
Net income per common share (1)	$	1.57	$	1.56	$	0.60	$	0.59

(1) Net of preferred stock dividends.

(2) We consider OP Units to be common stock equivalents as the holders have voting rights, the right to distributions and the right to redeem the OP Units for the cash value of a corresponding number of shares of common stock or a corresponding number of shares of common stock, at our election.

(3) Our chief executive officer was granted restricted stock units during 2020, which vest at the end of a four-year performance period based upon our achievement of total stockholder return objectives.

(4) The convertible senior unsecured notes impact diluted earnings per share if the average price of our common stock exceeds the conversion price, as calculated in accordance with the terms of the indenture.

Note 16 — Income Taxes

As a REIT, we are generally not subject to U.S. federal income tax to the extent of our distributions to stockholders and as long as certain asset, income, distribution, ownership and administrative tests are met. To maintain our qualification as a REIT, we must annually distribute at least 90% of our REIT-taxable income to our stockholders and meet certain other requirements. We may also be subject to certain state, local and franchise taxes. Under certain circumstances, federal income and excise taxes may be due on our undistributed taxable income. If we were to fail to meet these requirements, we would be subject to U.S. federal income tax, which could have a material adverse impact on our results of operations and amounts available for distributions to our stockholders. We believe that all of the criteria to maintain our REIT qualification have been met for the applicable periods, but there can be no assurance that these criteria will continue to be met in subsequent periods.

The Agency Business is operated through our TRS Consolidated Group and is subject to U.S. federal, state and local income taxes. In general, our TRS entities may hold assets that the REIT cannot hold directly and may engage in real estate or non-real estate-related business.

In the three and nine months ended September 30, 2021, we recorded a tax provision of $9.9 million and $33.4 million, respectively. In the three and nine months ended September 30, 2020, we recorded a tax provision of $17.8 million and $15.5 million, respectively. The tax provision recorded in the three months ended September 30, 2021 consisted of current and deferred tax provisions of $3.6 million and $6.3 million, respectively. The tax provision recorded in the nine months ended September 30, 2021 consisted of current and deferred tax provisions of $22.7 million and $10.7 million, respectively. The tax provision recorded in the three months ended September 30, 2020 consisted of a current tax provision of $13.9 million and a deferred tax provision of $3.9 million. The tax provision recorded in the nine months ended September 30, 2020 consisted of a current tax provision of $20.7 million and a deferred tax benefit of $5.2 million. Current and deferred taxes are primarily recorded on the portion of earnings (losses) recognized by us with respect to our interest in the TRS’s. Deferred income tax assets and liabilities are calculated based on temporary differences between our U.S. GAAP consolidated financial statements and the federal, state, local tax basis of assets and liabilities as of the consolidated balance sheets.

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ARBOR REALTY TRUST, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

September 30, 2021

Note 17 — Agreements and Transactions with Related Parties

Support Agreement and Employee Secondment Agreement. We have a support agreement and a secondment agreement with ACM and certain of its affiliates and certain affiliates of a relative of our chief executive officer (“Service Recipients”) where we provide support services and seconded employees to the Service Recipients. The Service Recipients reimburse us for the costs of performing such services and the cost of the seconded employees. During the three and nine months ended September 30, 2021, we incurred $0.8 million and $2.4 million, respectively, and, during the three and nine months ended September 30, 2020, we incurred $0.6 million and $1.8 million, respectively, of costs for services provided and employees seconded to the Service Recipients, all of which were reimbursed to us and included in due from related party on the consolidated balance sheets.

Other Related Party Transactions. Due from related party was $12.7 million and $12.4 million at September 30, 2021 and December 31, 2020, respectively, which consisted primarily of amounts due from our affiliated servicing operations related to real estate transactions closing at the end of the quarter and amounts due from ACM for costs incurred in connection with the support and secondment agreements described above.

Due to related party was $4.4 million and $2.4 million at September 30, 2021 and December 31, 2020, respectively, and consisted of loan payoffs, holdbacks and escrows to be remitted to our affiliated servicing operations related to real estate transactions.

In March 2021, we originated a $63.4 million bridge loan to a third-party to purchase a multifamily property from a multifamily-focused commercial real estate investment fund sponsored and managed by our chief executive officer and one of his immediate family members, which fund has no continued involvement with the property following the purchase. The loan has an interest rate of LIBOR plus 3.75% with a LIBOR floor of 0.25% and matures in March 2024. Interest income recorded from this loan was $0.7 million and $1.4 million for the three and nine months ended September 30, 2021, respectively.

In December 2020, we committed to fund a $32.5 million bridge loan (of which $2.3 million was funded as of September 30, 2021) and made a $3.5 million preferred equity investment in a SFR build-to-rent construction project. An entity owned by an immediate family member of our chief executive officer also made an equity investment in the project and owns a 21.8% equity interest in the borrowing entity. The bridge loan has an interest rate of LIBOR plus 5.50% with a LIBOR floor of 0.75% and matures in October 2023 and the preferred equity investment has a fixed rate of 12% and matures in October 2023. Interest income recorded from these loans was $0.1 million and $0.4 million for the three and nine months ended September 30, 2021, respectively.

In October 2020, we committed to fund a $30.5 million bridge loan and made a $4.6 million preferred equity investment in a SFR build-to-rent construction project. ACM and an entity owned by an immediate family member of our chief executive officer also made equity investments in the project and own an 18.9% equity interest in the borrowing entity. The bridge loan, which was not funded as of September 30, 2021, has an interest rate of LIBOR plus 5.50% with a LIBOR floor of 0.75% and matures in May 2023 and the preferred equity investment has a fixed rate of 12% and matures in April 2023. Interest income recorded from the preferred equity investment was $0.1 million and $0.4 million for the three and nine months ended September 30, 2021, respectively.

We have a $35.0 million bridge loan and a $7.8 million preferred equity interest on an office building in New York City. The property is controlled by a third party. The day-to-day operations were previously managed by an entity owned by an immediate family member of our chief executive officer. On September 1, 2021, we entered into a forbearance agreement with the borrower on the outstanding bridge loan to defer all interest owed to payoff. Interest income recorded from these loans was $0.3 million and $1.0 million for the three and nine months ended September 30, 2021, respectively, and $0.3 million and $1.7 million for the three and nine months ended September 30, 2020, respectively.

In March 2020, we originated a $14.8 million Private Label loan and a $3.4 million mezzanine loan on two multifamily properties owned in part by a consortium of investors (which includes, among other unaffiliated investors, certain of our officers and our chief executive officer) which owns a 50% interest in the borrowing entity. The Private Label loan bears interest at a fixed rate of 3.1% and the mezzanine loan bears interest at a fixed rate of 9.0% and both loans mature in April 2030. In May 2020, we sold the Private Label loan to an unconsolidated affiliate of ours. Interest income recorded from these loans totaled $0.1 million and $0.2 million for the three and nine months ended September 30, 2021, respectively, and $0.1 million and $0.3 million for the three and nine months ended September 30, 2020, respectively.

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ARBOR REALTY TRUST, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

September 30, 2021

In certain instances, our business requires our executives to charter privately owned aircraft in furtherance of our business. In 2019, we entered into an aircraft time-sharing agreement with an entity controlled by our chief executive officer that owns private aircraft. Pursuant to the agreement, we reimburse the aircraft owner for the required costs under Federal Aviation Administration regulations for the flights our executives' charter. During the nine months ended September 30, 2021 and 2020, we reimbursed the aircraft owner $0.1 million and $0.4 million, respectively, for the flights chartered by our executives pursuant the agreement.

In 2019, we, along with ACM, certain executives of ours and a consortium of independent outside investors, formed AMAC III, a multifamily-focused commercial real estate investment fund sponsored and managed by our chief executive officer and one of his immediate family members. We committed to a $30.0 million investment (of which $16.2 million was funded as of September 30, 2021) for an 18% interest in AMAC III. During the three and nine months ended September 30, 2021 the loss recorded from this investment was $0.4 million and $0.9 million, respectively. During the three and nine months ended September 30, 2020, the loss recorded from this investment was less than $0.1 million and $0.6 million, respectively. In July 2019, AMAC III originated a $7.0 million mezzanine loan to a borrower with which we have an outstanding $34.0 million bridge loan. In June 2020, for full satisfaction of the mezzanine loan, AMAC III became the owner of the property. In August 2020, the $34.0 million bridge loan was refinanced with a $35.4 million bridge loan, which bears interest at a rate of LIBOR plus 3.50% and matures in August 2022. We also originated a $15.6 million Private Label loan in December 2019 to a borrower which is 100% owned by AMAC III, which bears interest at a fixed rate of 3.735% and matures in January 2030. In May 2020, we sold the Private Label loan to an unconsolidated affiliate of ours. Interest income recorded from these loans totaled $0.3 million and $0.9 million for the three and nine months ended September 30, 2021, respectively, and $1.6 million for the nine months ended September 30, 2020.

In 2018, we originated a $37.5 million bridge loan, which was used to purchase several multifamily properties. In 2019, an entity owned, in part, by an immediate family member of our chief executive officer, purchased a 23.9% interest in the borrowing entity. The loan had an interest rate of LIBOR plus 4.25% with a LIBOR floor of 2.375% and was scheduled to mature in October 2020. In May 2020, the borrower repaid this loan in full. Interest income recorded from this loan was $1.4 million for the nine months ended September 30, 2020.
​

In 2018, we acquired a $19.5 million bridge loan originated by ACM. The loan was used to purchase several multifamily properties by a consortium of investors (which includes, among other unaffiliated investors, certain of our officers and our chief executive officer) which owns 85% of the borrowing entity. The loan had an interest rate of LIBOR plus 4.0% with a LIBOR floor of 2.125% and was scheduled to mature in July 2021. In January 2021, the borrower repaid this loan in full. Interest income recorded from this loan was $0.3 million and $0.9 million for the three and nine months ended September 30, 2020, respectively.

In 2018, we originated a $17.7 million bridge loan to an entity owned, in part, by an immediate family member of our chief executive officer, who owns a 10.8% interest in the borrowing entity. The loan was used to purchase several undeveloped parcels of land. The loan has a fixed interest rate of 10% and was scheduled to mature in February 2020. In September 2019, the borrower made a partial paydown of principal totaling $4.7 million and the remaining balance was paid off in January 2020. Interest income recorded from this loan was $0.1 million for the nine months ended September 30, 2020.

In 2018, we originated a $21.7 million bridge loan on a multifamily property owned in part by a consortium of investors (which includes, among other unaffiliated investors, certain of our officers and our chief executive officer) which owns 75% in the borrowing entity. The loan has an interest rate of LIBOR plus 4.75% with a LIBOR floor of 1.25% and was scheduled to mature in June 2021, which was extended to August 2023. Interest income recorded from this loan was $0.3 million for both the three months ended September 30, 2021 and 2020, and $1.0 million for both the nine months ended September 30, 2021 and 2020.

In 2018, we acquired a $9.4 million bridge loan originated by ACM. The loan was used to purchase several multifamily properties by a consortium of investors (which includes, among other unaffiliated investors, certain of our officers and our chief executive officer) which owns 75% of the borrowing entity. The loan has an interest rate of LIBOR plus 5.0% with a LIBOR floor of 1.25% and was scheduled to mature in January 2021. In January 2021, the maturity date of this loan was extended to January 2022 and, in September 2021, this loan paid off in full. Interest income recorded from this loan was $0.3 million for the nine months ended September 30, 2021. Interest income recorded from this loan was $0.1 million and $0.4 million for the three and nine months ended September 30, 2020, respectively.

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ARBOR REALTY TRUST, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

September 30, 2021

In 2017, we originated two bridge loans totaling $28.0 million on two multifamily properties owned in part by a consortium of investors (which includes, among other unaffiliated investors, certain of our officers and our chief executive officer) which owns 45% of the borrowing entity. The loans had an interest rate of LIBOR plus 5.25% with LIBOR floors ranging from 1.24% to 1.54% and were scheduled to mature in the fourth quarter of 2020. The borrower refinanced these loans with a $31.1 million bridge loan we originated in 2019 with an interest rate of LIBOR plus 4.0%, a LIBOR floor of 1.80% and a maturity date in October 2021. Interest income recorded from this loan was $0.5 million for both the three months ended September 30, 2021 and 2020, and $1.4 million for both the nine months ended September 30, 2021 and 2020.

In 2017, we originated a $46.9 million Fannie Mae loan on a multifamily property owned in part by a consortium of investors (which includes, among other unaffiliated investors, certain of our officers) which owns a 17.6% interest in the borrowing entity. We carry a maximum loss-sharing obligation with Fannie Mae on this loan of up to 5% of the original UPB. Servicing revenue recorded from this loan was less than $0.1 million for all periods presented.

In 2017, Ginkgo Investment Company LLC (“Ginkgo”), of which one of our directors is a 33% managing member, purchased a multifamily apartment complex which assumed an existing $8.3 million Fannie Mae loan that we service. Ginkgo subsequently sold the majority of its interest in this property and owned a 3.6% interest at September 30, 2021. We carry a maximum loss-sharing obligation with Fannie Mae on this loan of up to 20% of the original UPB. Upon the sale, we received a 1% loan assumption fee which was governed by existing loan agreements that were in place when the loan was originated in 2015, prior to such purchase. Servicing revenue recorded from this loan was less than $0.1 million for all periods presented.

In 2016, we originated $48.0 million of bridge loans on six multifamily properties owned in part by a consortium of investors (which includes, among other unaffiliated investors, certain of our officers and our chief executive officer) which owns interests ranging from 10.5% to 12.0% in the borrowing entities. The loans had an interest rate of LIBOR plus 4.5% with a LIBOR floor of 0.25% and were scheduled to mature in September 2019. In 2017, a $6.8 million loan on one property paid off in full and in 2018 four additional loans totaling $28.3 million paid off in full. In January 2019, $10.9 million of the $12.9 million remaining bridge loan paid off, with the $2.0 million remaining UPB converting to a mezzanine loan with a fixed interest rate of 10.0% and a January 2024 maturity. Interest income recorded from the remaining mezzanine loan was $0.1 million for both the three months ended September 30, 2021 and 2020, and $0.2 million for both the nine months ended September 30, 2021 and 2020.

In 2015, we invested $9.6 million for 50% of ACM's indirect interest in a joint venture with a third party that was formed to invest in a residential mortgage banking business. As a result of this transaction, we had an initial indirect interest of 22.5% in this entity. In January 2021, an equity investor in the underlying residential mortgage banking business exercised their right to purchase an additional interest in this investment, which decreased our indirect interest to 12.3%. We recorded income from equity affiliates related to this investment of $5.4 million and $32.7 million in the three and nine months ended September 30, 2021, respectively, and $32.3 million and $56.1 million in the three and nine months ended September 30, 2020, respectively. During the three and nine months ended September 30, 2021, we also received cash distributions totaling $4.7 million and $23.4 million from this investment, respectively, which were classified as returns of capital.

43

ARBOR REALTY TRUST, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

September 30, 2021

We, along with an executive officer of ours and a consortium of independent outside investors, hold equity investments in a portfolio of multifamily properties referred to as the “Lexford” portfolio, which is managed by an entity owned primarily by a consortium of affiliated investors, including our chief executive officer and an executive officer of ours. Based on the terms of the management contract, the management company is entitled to 4.75% of gross revenues of the underlying properties, along with the potential to share in the proceeds of a sale or restructuring of the debt. In 2018, the owners of Lexford restructured part of its debt and we originated 12 bridge loans totaling $280.5 million, which were used to repay in full certain existing mortgage debt and to renovate 72 multifamily properties included in the portfolio. The loans were originated in 2018, had interest rates of LIBOR plus 4.0% and were scheduled to mature in June 2021. During 2019, the borrower made payoffs and partial paydowns of principal totaling $250.0 million and in March 2020, the remaining balance of the loans were refinanced with a $34.6 million Private Label loan, which bears interest at a fixed rate of 3.30% and matures in March 2030. In May 2020, we sold the Private Label loan to an unconsolidated affiliate of ours. Interest income recorded from these loans totaled $0.5 million during the nine months ended September 30, 2020. Further, as part of this restructuring, $50.0 million in unsecured financing was provided by an unsecured lender to certain parent entities of the property owners. ACM owns slightly less than half of the unsecured lender entity and, therefore, provided slightly less than half of the unsecured lender financing. In addition, in connection with our equity investment, we received distributions totaling $1.1 million during the nine months ended September 30, 2020, which was recorded as income from equity affiliates. Separate from the loans we originated in 2018, we provide limited (“bad boy”) guarantees for certain other debt controlled by Lexford. The bad boy guarantees may become a liability for us upon standard “bad” acts such as fraud or a material misrepresentation by Lexford or us. At September 30, 2021, this debt had an aggregate outstanding balance of $607.4 million and is scheduled to mature through 2029.

Several of our executives, including our chief financial officer, senior counsel and our chairman, chief executive officer and president, hold similar positions for ACM. Our chief executive officer and his affiliated entities (“the Kaufman Entities”) together beneficially own approximately 35% of the outstanding membership interests of ACM and certain of our employees and directors also hold an ownership interest in ACM. Furthermore, one of our directors serves as the trustee and co-trustee of two of the Kaufman Entities that hold membership interests in ACM. Upon the closing of the Acquisition in 2016, we issued OP Units, each paired with one share of our special voting preferred shares. At September 30, 2021, ACM holds 2,828,629 shares of our common stock and 10,665,530 OP Units, which in the aggregate represents 8.5% of the voting power of our outstanding stock. Our Board of Directors approved a resolution under our charter allowing our chief executive officer and ACM (in which our chief executive officer has a controlling equity interest in) to own more than the 5% ownership interest limit of our common stock as stated in our amended charter.

44

ARBOR REALTY TRUST, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

September 30, 2021

Note 18 — Segment Information

The summarized statements of income and balance sheet data, as well as certain other data, by segment are included in the following tables ($ in thousands). Specifically identifiable costs are recorded directly to each business segment. For items not specifically identifiable, costs have been allocated between the business segments using the most meaningful allocation methodologies, which was predominately direct labor costs (i.e., time spent working on each business segment). Such costs include, but are not limited to, compensation and employee related costs, selling and administrative expenses and stock-based compensation.

	Three Months Ended September 30, 2021
	Structured		Agency		Other /
	Business		Business		Eliminations (1)		Consolidated
Interest income	$	114,710	$	10,770	$	—	$	125,480
Interest expense		50,823		4,737		—		55,560
Net interest income		63,887		6,033		—		69,920
Other revenue:
Gain on sales, including fee-based services, net		—		16,334		—		16,334
Mortgage servicing rights		—		32,453		—		32,453
Servicing revenue		—		34,960		—		34,960
Amortization of MSRs		—		(14,872)		—		(14,872)
Loss on derivative instruments, net		—		(1,492)		—		(1,492)
Other income, net		2,168		27		—		2,195
Total other revenue		2,168		67,410		—		69,578
Other expenses:
Employee compensation and benefits		14,082		27,891		—		41,973
Selling and administrative		5,718		6,039		—		11,757
Property operating expenses		149		—		—		149
Depreciation and amortization		634		1,173		—		1,807
Provision for loss sharing (net of recoveries)		—		(3,272)		—		(3,272)
Provision for credit losses (net of recoveries)		(3,445)		(354)		—		(3,799)
Total other expenses		17,138		31,477		—		48,615
Income before income from equity affiliates and income taxes		48,917		41,966		—		90,883
Income from equity affiliates		5,086		—		—		5,086
Provision for income taxes		(622)		(9,283)		—		(9,905)
Net income		53,381		32,683		—		86,064
Preferred stock dividends		4,913		—		—		4,913
Net income attributable to noncontrolling interest		—		—		8,347		8,347
Net income attributable to common stockholders	$	48,468	$	32,683	$	(8,347)	$	72,804

45

ARBOR REALTY TRUST, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

September 30, 2021

	Three Months Ended September 30, 2020
	Structured		Agency		Other /
	Business		Business		Eliminations (1)		Consolidated
Interest income	$	75,471	$	6,230	$	—	$	81,701
Interest expense		35,252		2,636		—		37,888
Net interest income		40,219		3,594		—		43,813
Other revenue:
Gain on sales, including fee-based services, net		—		19,895		—		19,895
Mortgage servicing rights		—		42,357		—		42,357
Servicing revenue		—		25,764		—		25,764
Amortization of MSRs		—		(12,416)		—		(12,416)
Property operating income		1,033		—		—		1,033
Gain (loss) on derivative instruments, net		118		(871)		—		(753)
Other income, net		1,050		—		—		1,050
Total other revenue		2,201		74,729		—		76,930
Other expenses:
Employee compensation and benefits		8,873		24,089		—		32,962
Selling and administrative		4,665		4,691		—		9,356
Property operating expenses		1,300		—		—		1,300
Depreciation and amortization		598		1,324		—		1,922
Provision for loss sharing (net of recoveries)		—		(2,227)		—		(2,227)
Provision for credit losses (net of recoveries)		(6,065)		(1,521)		—		(7,586)
Total other expenses		9,371		26,356		—		35,727
Income before sale of real estate, income from equity affiliates and income taxes		33,049		51,967		—		85,016
Loss on sale of real estate		(1,868)		—		—		(1,868)
Income from equity affiliates		32,358		—		—		32,358
Provision for income taxes		(6,494)		(11,291)		—		(17,785)
Net income		57,045		40,676		—		97,721
Preferred stock dividends		1,888		—		—		1,888
Net income attributable to noncontrolling interest		—		—		13,836		13,836
Net income attributable to common stockholders	$	55,157	$	40,676	$	(13,836)	$	81,997

46

ARBOR REALTY TRUST, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

September 30, 2021

	Nine Months Ended September 30, 2021
	Structured		Agency		Other /
	Business		Business		Eliminations (1)		Consolidated
Interest income	$	294,418	$	27,354	$	—	$	321,772
Interest expense		131,795		12,327		—		144,122
Net interest income		162,623		15,027		—		177,650
Other revenue:
Gain on sales, including fee-based services, net		—		86,102		—		86,102
Mortgage servicing rights		—		95,688		—		95,688
Servicing revenue		—		94,683		—		94,683
Amortization of MSRs		—		(43,744)		—		(43,744)
Loss on derivative instruments, net		—		(7,320)		—		(7,320)
Other income, net		4,105		35		—		4,140
Total other revenue		4,105		225,444		—		229,549
Other expenses:
Employee compensation and benefits		37,566		91,081		—		128,647
Selling and administrative		15,477		18,230		—		33,707
Property operating expenses		421		—		—		421
Depreciation and amortization		1,832		3,517		—		5,349
Provision for loss sharing (net of recoveries)		—		(1,070)		—		(1,070)
Provision for credit losses (net of recoveries)		(12,807)		118		—		(12,689)
Total other expenses		42,489		111,876		—		154,365
Income before extinguishment of debt, sale of real estate income from equity affiliates and income taxes		124,239		128,595		—		252,834
Loss on extinguishment of debt		(1,370)		—		—		(1,370)
Gain on sale of real estate		—		1,228		—		1,228
Income from equity affiliates		32,095		—		—		32,095
Provision for income taxes		(6,288)		(27,068)		—		(33,356)
Net income		148,676		102,755		—		251,431
Preferred stock dividends		13,216		—		—		13,216
Net income attributable to noncontrolling interest		—		—		26,806		26,806
Net income attributable to common stockholders	$	135,460	$	102,755	$	(26,806)	$	211,409

47

ARBOR REALTY TRUST, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

September 30, 2021

	Nine Months Ended September 30, 2020
	Structured		Agency		Other /
	Business		Business		Eliminations (1)		Consolidated
Interest income	$	228,243	$	25,064	$	—	$	253,307
Interest expense		115,390		13,782		—		129,172
Net interest income		112,853		11,282		—		124,135
Other revenue:
Gain on sales, including fee-based services, net		—		60,566		—		60,566
Mortgage servicing rights		—		96,708		—		96,708
Servicing revenue		—		76,285		—		76,285
Amortization of MSRs		—		(36,129)		—		(36,129)
Property operating income		3,976		—		—		3,976
Loss on derivative instruments, net		(3,176)		(55,676)		—		(58,852)
Other income, net		3,347		57		—		3,404
Total other revenue		4,147		141,811		—		145,958
Other expenses:
Employee compensation and benefits		28,880		72,772		—		101,652
Selling and administrative		12,647		16,366		—		29,013
Property operating expenses		4,778		—		—		4,778
Depreciation and amortization		1,845		3,985		—		5,830
Provision for loss sharing (net of recoveries)		—		21,706		—		21,706
Provision for credit losses (net of recoveries)		58,383		1,127		—		59,510
Total other expenses		106,533		115,956		—		222,489
Income before extinguishment of debt, sale of real estate, income from equity affiliates and income taxes		10,467		37,137		—		47,604
Loss on extinguishment of debt		(3,546)		—		—		(3,546)
Loss on sale of real estate		(1,868)		—		—		(1,868)
Income from equity affiliates		56,758		—		—		56,758
Provision for income taxes		(9,337)		(6,156)		—		(15,493)
Net income		52,474		30,981		—		83,455
Preferred stock dividends		5,665		—		—		5,665
Net income attributable to noncontrolling interest		—		—		11,012		11,012
Net income attributable to common stockholders	$	46,809	$	30,981	$	(11,012)	$	66,778

(1) Includes income allocated to the noncontrolling interest holders not allocated to the two reportable segments.

48

ARBOR REALTY TRUST, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

September 30, 2021

	September 30, 2021
	Structured Business		Agency Business		Consolidated
Assets:
Cash and cash equivalents	$	162,870	$	217,860	$	380,730
Restricted cash		552,706		17,222		569,928
Loans and investments, net		8,993,790		—		8,993,790
Loans held-for-sale, net		—		1,274,234		1,274,234
Capitalized mortgage servicing rights, net		—		417,283		417,283
Securities held-to-maturity, net		—		112,735		112,735
Investments in equity affiliates		91,846		—		91,846
Goodwill and other intangible assets		12,500		89,433		101,933
Other assets		136,653		90,452		227,105
Total assets	$	9,950,365	$	2,219,219	$	12,169,584
Liabilities:
Debt obligations	$	8,515,801	$	1,102,485	$	9,618,286
Allowance for loss-sharing obligations		—		62,828		62,828
Other liabilities		225,088		127,975		353,063
Total liabilities	$	8,740,889	$	1,293,288	$	10,034,177

	December 31, 2020
Assets:
Cash and cash equivalents	$	172,568	$	166,960	$	339,528
Restricted cash		188,226		9,244		197,470
Loans and investments, net		5,285,868		—		5,285,868
Loans held-for-sale, net		—		986,919		986,919
Capitalized mortgage servicing rights, net		—		379,974		379,974
Securities held-to-maturity, net		—		95,524		95,524
Investments in equity affiliates		74,274		—		74,274
Goodwill and other intangible assets		12,500		92,951		105,451
Other assets		142,844		53,134		195,978
Total assets	$	5,876,280	$	1,784,706	$	7,660,986
Liabilities:
Debt obligations	$	4,872,626	$	952,038	$	5,824,664
Allowance for loss-sharing obligations		—		64,303		64,303
Other liabilities		203,554		85,780		289,334
Total liabilities	$	5,076,180	$	1,102,121	$	6,178,301

49

ARBOR REALTY TRUST, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

September 30, 2021

	Three Months Ended September 30,						Nine Months Ended September 30,
	2021			2020			2021			2020
Origination Data:
Structured Business
Bridge loans (1)	$	2,383,346		$	286,993		$	5,189,722		$	1,371,049
Mezzanine loans		62,657			1,000			156,914			16,722
Preferred equity investments		28,650			—			28,650			23,500
Other loans (2)		—			3,765			26,238			37,197
Total new loan originations	$	2,474,653		$	291,758		$	5,401,524		$	1,448,468
(1) The three and nine months ended September 30, 2021 includes 25 and 68 SFR loans with a UPB of $105.3 million and $219.5 million, respectively. During the three and nine months ended September 30, 2021, we committed to fund one and five SFR build-to-rent bridge loans totaling $17.6 million and $156.0 million, respectively.
(2) The nine months ended September 30, 2021 and 2020 includes 1 and 9 SFR permanent loans with a UPB of $26.2 million and $37.2 million, respectively.
Loan payoffs / paydowns	$	567,858		$	206,028		$	1,463,826		$	640,494
Agency Business
Origination Volumes by Investor:
Fannie Mae	$	719,730		$	1,117,679		$	2,421,206		$	2,839,833
Private Label		625,176			5,840			1,154,814			337,307
Freddie Mac		307,664			252,014			578,295			587,445
FHA		84,430			100,345			281,674			193,821
SFR - Fixed Rate		67,227			—			79,223			—
Total	$	1,804,227		$	1,475,878		$	4,515,212		$	3,958,406
Total loan commitment volume	$	1,856,474		$	1,528,551		$	4,510,953		$	4,002,492
Loan Sales Data:
Agency Business
Fannie Mae	$	660,693		$	1,038,053		$	2,820,558		$	2,856,020
Freddie Mac		238,880			116,628			647,827			468,019
FHA		78,188			64,781			308,193			118,218
SFR - Fixed Rate		29,197			—			104,491			—
Private Label		—			—			449,890			727,154
Total	$	1,006,958		$	1,219,462		$	4,330,959		$	4,169,411
Sales margin (fee-based services as a % of loan sales)		1.62	%		1.63	%		1.99	%		1.45	%
MSR rate (MSR income as a % of loan commitments)		1.75	%		2.77	%		2.12	%		2.42	%

	September 30, 2021
			Wtd. Avg. Servicing	Wtd. Avg. Life of
	UPB of Servicing		Fee Rate	Servicing Portfolio
Key Servicing Metrics for Agency Business:	Portfolio		(basis points)	(in years)
Fannie Mae	$	19,271,527	53.2	8.4
Freddie Mac		4,726,587	28.1	9.8
Private Label		1,176,391	20.0	8.8
FHA		933,519	15.6	21.4
SFR - Fixed Rate		104,094	20.0	5.7
Total	$	26,212,118	45.7	9.1

	December 31, 2020
Fannie Mae	$	18,268,268	52.3	8.2
Freddie Mac		4,881,080	27.9	9.9
FHA		752,116	16.3	20.3
Private Label		726,992	20.0	8.7
Total	$	24,628,456	45.4	8.9

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Item 2.     Management’s Discussion and Analysis of Financial Condition and Results of Operations

You should read the following discussion in conjunction with the unaudited consolidated interim financial statements, and related notes and the section entitled “Forward-Looking Statements” included herein.

Overview

Through our Structured Business, we invest in a diversified portfolio of structured finance assets in the multifamily, SFR and commercial real estate markets, primarily consisting of bridge and mezzanine loans, including junior participating interests in first mortgages and preferred and direct equity. We also invest in real estate-related joint ventures and may directly acquire real property and invest in real estate-related notes and certain mortgage-related securities.

Through our Agency Business, we originate, sell and service a range of multifamily finance products through Fannie Mae and Freddie Mac, Ginnie Mae, FHA and HUD. We retain the servicing rights and asset management responsibilities on substantially all loans we originate and sell under the GSE and HUD programs. We are an approved Fannie Mae DUS lender nationally, a Freddie Mac Multifamily Conventional Loan lender, seller/servicer, in New York, New Jersey and Connecticut, a Freddie Mac affordable, manufactured housing, senior housing and SBL lender, seller/servicer, nationally and a HUD MAP and LEAN senior housing/healthcare lender nationally. We also originate and service permanent financing loans underwritten using the guidelines of our existing agency loans sold to the GSEs, which we refer to as “Private Label” loans and originate and sell finance products through CMBS programs. We pool and securitize the Private Label loans and sell certificates in the securitizations to third-party investors, while retaining the servicing rights and APL certificates of the securitization.

We conduct our operations to qualify as a REIT. A REIT is generally not subject to federal income tax on its REIT—taxable income that is distributed to its stockholders, provided that at least 90% of its REIT—taxable income is distributed and provided that certain other requirements are met.

Our operating performance is primarily driven by the following factors:

Net interest income earned on our investments. Net interest income represents the amount by which the interest income earned on our assets exceeds the interest expense incurred on our borrowings. If the yield on our assets increases or the cost of borrowings decreases, this will have a positive impact on earnings. However, if the yield earned on our assets decreases or the cost of borrowings increases, this will have a negative impact on earnings. Net interest income is also directly impacted by the size and performance of our asset portfolio. We recognize the bulk of our net interest income from our Structured Business. Additionally, we recognize net interest income from loans originated through our Agency Business, which are generally sold within 60 days of origination.

Fees and other revenues recognized from originating, selling and servicing mortgage loans through the GSE and HUD programs. Revenue recognized from the origination and sale of mortgage loans consists of gains on sale of loans (net of any direct loan origination costs incurred), commitment fees, broker fees, loan assumption fees and loan origination fees. These gains and fees are collectively referred to as gain on sales, including fee-based services, net. We record income from MSRs at the time of commitment to the borrower, which represents the fair value of the expected net future cash flows associated with the rights to service mortgage loans that we originate, with the recognition of a corresponding asset upon sale. We also record servicing revenue which consists of fees received for servicing mortgage loans, net of amortization on the MSR assets recorded. Although we have long-established relationships with the GSE and HUD agencies, our operating performance would be negatively impacted if our business relationships with these agencies deteriorate. Additionally, we also recognize revenue from originating, selling and servicing our Private Label loans.

Income earned from our structured transactions. Our structured transactions are primarily comprised of investments in equity affiliates, which represent unconsolidated joint venture investments formed to acquire, develop and/or sell real estate-related assets. Operating results from these investments can be difficult to predict and can vary significantly period-to-period. If interest rates were to rise, it is likely that income from these investments would be significantly and negatively impacted, particularly from our investment in a residential mortgage banking business, since rising interest rates generally decrease the demand for residential real estate loans and the number of loan originations. In addition, we periodically receive distributions from our equity investments. It is difficult to forecast the timing of such payments, which can be substantial in any given quarter. We account for structured transactions within our Structured Business.

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Credit quality of our loans and investments, including our servicing portfolio. Effective portfolio management is essential to maximize the performance and value of our loan and investment and servicing portfolios.  Maintaining the credit quality of the loans in our portfolios is of critical importance.  Loans that do not perform in accordance with their terms may have a negative impact on earnings and liquidity.

COVID-19 Impact. The global outbreak of COVID-19 that began in early 2020, has forced many countries, including the U.S., to declare national emergencies, to institute “stay-at-home” orders, to close financial markets and to restrict operations of non-essential businesses. Such actions have created significant disruptions in global supply chains, and adversely impacted many industries. COVID-19 could have a continued and prolonged adverse impact on economic and market conditions, which could continue a period of global economic slowdown. Although we have not been significantly impacted by COVID-19 to-date, the impact of COVID-19 on companies continues to evolve, and the extent and duration of the economic fallout from this pandemic, both globally and to our business, remain unclear and present risk with respect to our financial condition, results of operations, liquidity, and ability to pay distributions.

Significant Developments During the Third Quarter of 2021

Financing and Capital Markets Activity.

● We closed a collateralized securitization vehicle (CLO 16) totaling $1.50 billion of real estate related assets and cash, of which $1.24 billion of investment grade notes were issued to third party investors and $135.0 million of below investment-grade notes and a $127.5 million equity interest in the portfolio were retained by us;

● We issued $270.0 million of 4.50% senior unsecured notes due in 2026 in a private offering; and

● We raised $139.1 million from the issuance of 6.25% Series E preferred stock.

Structured Business Activity.

● Our Structured loan and investment portfolio grew 24.1% to $9.17 billion on loan originations totaling $2.47 billion, partially offset by loan runoff of $567.9 million; and

● We recorded income of $5.4 million and received a $4.7 million cash distribution from our residential mortgage business joint venture.

Agency Business Activity.

● Loan originations and sales totaled $1.80 billion and $1.01 billion, respectively; and

● Our fee-based servicing portfolio grew to $26.21 billion.

Dividend. We raised our quarterly common dividend to $0.36 per share, our sixth consecutive quarterly increase.

Subsequent Events.

● In October 2021, we completed a public offering of 8,050,000 shares of 6.25% Series F preferred stock, generating net proceeds of approximately $194.8 million; and

● In October 2021, we closed a Private Label securitization totaling $535.0 million, of which we retained the most subordinate class of certificates totaling $47.5 million.

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Current Market Conditions, Risks and Recent Trends

As discussed throughout this report, the COVID-19 pandemic continues to impact the global economy in unprecedented ways, swiftly halting activity across many industries, and continuing to cause significant disruption and liquidity constraints in many market segments, including the financial services, real estate and credit markets. The impact of COVID-19 on companies continues to evolve, and the extent and duration of the economic fallout from this pandemic remains unclear. COVID-19 could have a continued and prolonged adverse impact on economic and market conditions, which could continue a period of global economic slowdown. Although we have not been significantly impacted by COVID-19 to-date, adverse economic conditions have resulted, and may continue to result, in declining real estate values, increased payment delinquencies and defaults and increased loan modifications and foreclosures, all of which could have a significant impact on our future results of operations, financial condition, business prospects and our ability to make distributions to our stockholders.

The pandemic has caused a dislocation in the capital markets resulting in a reduction of available liquidity. Many commercial mortgage REITs have suffered, and continue to suffer, from the reduction in available liquidity since access to capital is critical to grow their business. Despite this reduction in liquidity, we continue to raise capital through various vehicles to grow our business.

Our Agency Business requires limited capital to grow, as originations are financed through warehouse facilities for generally up to 60 days before the loans are sold, therefore this lack of liquidity has not and should not, impact our ability to grow this business. However, our Structured Business is more reliant on the capital markets to grow, and therefore, a lack of liquidity for a prolonged period of time could limit our ability to grow this business. In our Structured Business, 89% of our portfolio is in multifamily assets with most of these loans containing interest reserves and/or replenishment obligations by our borrowers.

The federal government, Fannie Mae and Freddie Mac have made certain forbearance and non-eviction programs available to borrowers and tenants should they need to counteract any short-term pressure on their properties from COVID-19 and its impact on the economy. For borrowers, in order to qualify for a forbearance, they need to demonstrate they have been adversely affected by the pandemic and their ability to make their loan payments has been impacted. All loan and rent payments that are suspended remain the obligations of the borrowers and tenants.

Currently, our Agency Business had approved forbearances related to approximately 0.2% of our Fannie Mae DUS portfolio and approximately 2.8% of our Freddie Mac portfolio. We are closely monitoring and managing the requests for forbearances and there could potentially be additional economic stress during the remainder of 2021.

Interest rates continue to remain at historically low levels. While lower interest rates generally have a positive impact on origination volume as borrowers look to refinance loans to take advantage of lower rates, our net interest income may be negatively impacted as higher yielding loans are paid off and replaced with lower yielding loans. However, we are somewhat insulated from decreasing interest rates, since a large portion of our structured loan portfolio has LIBOR floors, which could increase our net interest income in the future if rates remain at these historically low levels. Conversely, if interest rates were to rise, it could negatively impact our net interest income. An increase in rates would cause an increase in interest expense as most of our debt is variable. However, since a large portion of our structured loan portfolio has LIBOR floors that are in the money, any increase in interest income due to rising interest rates is not likely to be as substantial as the corresponding increase in interest expense.

We are a national originator with Fannie Mae and Freddie Mac, and the GSEs remain the most significant providers of capital to the multifamily market. In October 2021, the Federal Housing Finance Agency ("FHFA") announced that its 2022 loan origination caps for Fannie Mae and Freddie Mac will be $78 billion for each enterprise for a total opportunity of $156 billion (the “2022 Caps”), which has increased from its 2021 loan origination caps of $70 billion for each enterprise (the “2021 Caps”). The 2022 Caps will continue to apply to all multifamily business, have no exclusions and mandate that 50% be directed towards mission driven, affordable housing. The FHFA will also require at least 25% be affordable to residents at or below 60% of area median income for 2022, up from 20% in 2021.Our originations with the GSEs are highly profitable executions as they provide significant gains from the sale of our loans, non-cash gains related to MSRs and servicing revenues. Therefore, a decline in our GSE originations could negatively impact our financial results. We are unsure whether the FHFA will impose stricter limitations on GSE multifamily production volume in the future.

53

Changes in Financial Condition

Assets — Comparison of balances at September 30, 2021 to December 31, 2020:

Our Structured loan and investment portfolio balance was $9.17 billion and $5.48 billion at September 30, 2021 and December 31, 2020, respectively. This increase was primarily due to loan originations exceeding loan payoffs and paydowns by $3.94 billion. See below for details.

Our portfolio had a weighted average current interest pay rate of 4.56% and 5.23% at September 30, 2021 and December 31, 2020, respectively. Including certain fees earned and costs associated with the structured portfolio, the weighted average current interest rate was 4.97% and 5.80% at September 30, 2021 and December 31, 2020, respectively. Advances on our financing facilities totaled $8.58 billion and $4.92 billion at September 30, 2021 and December 31, 2020, respectively, with a weighted average funding cost of 2.32% and 2.64%, respectively, which excludes financing costs. Including financing costs, the weighted average funding rate was 2.64% and 3.03% at September 30, 2021 and December 31, 2020, respectively.

Activity from our Structured Business portfolio is comprised of the following ($ in thousands):

	Three Months Ended			Nine Months Ended
	September 30, 2021			September 30, 2021
Loans originated (1)	$	2,474,653		$	5,401,524
Number of loans		118			266
Weighted average interest rate		4.28	%		4.44	%
(1) During the three and nine months ended September 30, 2021, we committed to fund one and five SFR build-to-rent bridge loans totaling $17.6 million and $156.0 million, respectively.
Loans paid-off / paid-down	$	567,858		$	1,463,826
Number of loans		54			111
Weighted average interest rate		6.81	%		6.66	%
Loans extended	$	439,479		$	939,794
Number of loans		22			58

Loans held-for-sale from the Agency Business increased $287.3 million, primarily from loan originations exceeding sales by $184.3 million as noted in the following table (in thousands). Loan sales includes $104.5 million of fixed rate SFR permanent loans that are now recorded through the Agency Business beginning in the first quarter of 2021, see Note 3 and 4 for details, and $449.9 million of Private Label loans which were sold in connection with a Private Label multifamily mortgage loan securitization in the second quarter of 2021. Our GSE loans are generally sold within 60 days, while our Private Label loans are generally expected to be sold and securitized within 180 days from the loan origination date.

	Three Months Ended				Nine Months Ended
	September 30, 2021				September 30, 2021
	Loan				Loan
	Originations		Loan Sales		Originations		Loan Sales
Fannie Mae	$	719,730	$	660,693	$	2,421,206	$	2,820,558
Private Label		625,176		—		1,154,814		449,890
Freddie Mac		307,664		238,880		578,295		647,827
FHA		84,430		78,188		281,674		308,193
SFR - Fixed Rate		67,227		29,197		79,223		104,491
Total	$	1,804,227	$	1,006,958	$	4,515,212	$	4,330,959

Capitalized mortgage servicing rights increased $37.3 million, primarily due to MSRs recorded on new loan originations, partially offset by amortization and write-offs. Our capitalized mortgage servicing rights represent the estimated value of our rights to service mortgage loans for others. At September 30, 2021, the weighted average estimated life remaining of our MSRs was 8.5 years.

54

Securities held-to-maturity increased $17.2 million, primarily due to the purchase, at a discount, of APL certificates in connection with a Private Label securitization.

Investments in equity affiliates increased $17.6 million, primarily due to income from our investment in a residential mortgage banking business of $32.7 million, partially offset by $23.4 million in cash distributions received from the same investment. In addition, we entered into two new equity investments during the third quarter of 2021 totaling $6.4 million. See Note 8 for details.

Other assets increased $30.9 million, primarily due to increases in current tax assets, interest receivables from portfolio growth and the fair value of our Swaps.

Liabilities – Comparison of balances at September 30, 2021 to December 31, 2020:

Credit and repurchase facilities increased $1.16 billion, primarily due to funding of new structured loan activity.

Collateralized loan obligations increased $2.20 billion, primarily due to the issuances of three new CLOs, where we issued $2.57 billion of notes to third party investors, partially offset by the unwind of a CLO totaling $356.2 million.

Senior unsecured notes increased $439.7 million, primarily due to our issuances of $270.0 million of 4.50% notes and $175.0 million of 5.00% notes.

Other liabilities increased $57.5 million, primarily due to increases in accrued compensation, deferred tax liabilities, good faith deposits on new loan originations and the fair value of our rate lock and forward sale commitments.

Equity

In August 2021, we completed a public offering of 5,750,000 shares of 6.25% Series E cumulative redeemable preferred stock with a liquidation preference of $25.00 per share, generating net proceeds of approximately $139.1 million after deducting the underwriting discount and other offering expenses.

In June 2021, we completed a public offering of 9,200,000 shares of 6.375% Series D cumulative redeemable preferred stock with a liquidation preference of $25.00 per share, generating net proceeds of $222.6 million after deducting the underwriting discount and other offering expenses. We used $93.3 million of the proceeds to fully redeem our Series A, B and C preferred stock.

During the nine months ended September 30, 2021, we sold 20,222,879 shares of our common stock through two public offerings and our “At-The-Market” agreement, raising net proceeds totaling $342.6 million. We used $44.6 million of the net proceeds to purchase a total of 2,608,400 of common stock and OP Units from certain executive officers of ours, ACM and its members and an estate planning family vehicle established by our chief executive officer.

See Note 15 for the details of our dividends declared and our deferred compensation transactions during the nine months ended September 30, 2021.

55

Agency Servicing Portfolio

The following table sets forth the characteristics of our loan servicing portfolio collateralizing our mortgage servicing rights and servicing revenue ($ in thousands):

	September 30, 2021
				Wtd. Avg.	Wtd. Avg.							Annualized
	Servicing			Age of	Portfolio							Prepayments		Delinquencies
	Portfolio		Loan	Portfolio	Maturity	Interest Rate Type				Wtd. Avg.		as a Percentage		as a Percentage
Product	UPB		Count	(in years)	(in years)	Fixed		Adjustable		Note Rate		of Portfolio (1)		of Portfolio (2)
Fannie Mae	$	19,271,527	2,763	3.0	8.8	97	%	3	%	4.01	%	9.39	%	0.29	%
Freddie Mac		4,726,587	1,330	2.8	11.2	88	%	12	%	3.90	%	17.96	%	0.63	%
Private Label		1,176,391	72	1.3	8.7	100	%	—	%	3.75	%	—	%	—	%
FHA		933,519	90	2.5	33.6	100	%	—	%	3.11	%	18.96	%	—	%
SFR - Fixed Rate		104,094	27	1.2	5.6	100	%	—	%	4.70	%	—	%	—	%
Total	$	26,212,118	4,282	2.9	10.1	96	%	4	%	3.95	%	10.82	%	0.33	%

	December 31, 2020
Fannie Mae	$	18,268,268	2,712	2.8	9.0	97	%	3	%	4.12	%	6.40	%	0.33	%
Freddie Mac		4,881,080	1,413	2.6	11.7	88	%	12	%	3.99	%	11.47	%	0.65	%
FHA		752,116	89	3.0	32.9	100	%	—	%	3.39	%	33.60	%	—	%
Private Label		726,992	40	1.0	9.1	100	%	—	%	3.81	%	—	%	—	%
Total	$	24,628,456	4,254	2.7	10.3	95	%	5	%	4.06	%	8.05	%	0.37	%

(1) Prepayments reflect loans repaid prior to six months from the loan’s maturity. The majority of our loan servicing portfolio has a prepayment protection term and therefore, we may collect a prepayment fee which is included as a component of servicing revenue, net.

(2) Delinquent loans reflect loans that are contractually 60 days or more past due. As of September 30, 2021 and December 31, 2020, delinquent loans totaled $86.1 million and $91.3 million, respectively, of which $36.3 million and $19.6 million, respectively, were in the foreclosure process. No loans were in bankruptcy as of September 30, 2021 and December 31, 2020.

Our servicing portfolio represents commercial real estate loans originated in our Agency Business, which are generally transferred or sold within 60 days from the date the loan is funded. Primarily all of the loans in our servicing portfolio are collateralized by multifamily properties. In addition, we are generally required to share in the risk of any losses associated with loans sold under the Fannie Mae DUS program, see Note 10.

56

Comparison of Results of Operations for the Three Months Ended September 30, 2021 and 2020

The following table provides our consolidated operating results ($ in thousands):

	Three Months Ended September 30,				Increase / (Decrease)
	2021		2020		Amount		Percent
Interest income	$	125,480	$	81,701	$	43,779	54	%
Interest expense		55,560		37,888		17,672	47	%
Net interest income		69,920		43,813		26,107	60	%
Other revenue:
Gain on sales, including fee-based services, net		16,334		19,895		(3,561)	(18)	%
Mortgage servicing rights		32,453		42,357		(9,904)	(23)	%
Servicing revenue, net		20,088		13,348		6,740	50	%
Property operating income		—		1,033		(1,033)	nm
Loss on derivative instruments, net		(1,492)		(753)		(739)	98	%
Other income, net		2,195		1,050		1,145	109	%
Total other revenue		69,578		76,930		(7,352)	(10)	%
Other expenses:
Employee compensation and benefits		41,973		32,962		9,011	27	%
Selling and administrative		11,757		9,356		2,401	26	%
Property operating expenses		149		1,300		(1,151)	(89)	%
Depreciation and amortization		1,807		1,922		(115)	(6)	%
Provision for loss sharing (net of recoveries)		(3,272)		(2,227)		(1,045)	47	%
Provision for credit losses (net of recoveries)		(3,799)		(7,586)		3,787	(50)	%
Total other expenses		48,615		35,727		12,888	36	%
Income before sale of real estate, income from equity affiliates and income taxes		90,883		85,016		5,867	7	%
Loss on sale of real estate		—		(1,868)		1,868	nm
Income from equity affiliates		5,086		32,358		(27,272)	(84)	%
Provision for income taxes		(9,905)		(17,785)		7,880	(44)
Net income		86,064		97,721		(11,657)	(12)	%
Preferred stock dividends		4,913		1,888		3,025	160	%
Net income attributable to noncontrolling interest		8,347		13,836		(5,489)	(40)	%
Net income attributable to common stockholders	$	72,804	$	81,997	$	(9,193)	(11)	%

nm — not meaningful

57

The following table presents the average balance of our Structured Business interest-earning assets and interest-bearing liabilities, associated interest income (expense) and the corresponding weighted average yields ($ in thousands):

	Three Months Ended September 30,
	2021						2020
	Average		Interest		W/A Yield /		Average		Interest		W/A Yield /
	Carrying		Income /		Financing		Carrying		Income /		Financing
	Value (1)		Expense		Cost (2)		Value (1)		Expense		Cost (2)
Structured Business interest-earning assets:
Bridge loans	$	7,653,224	$	101,189	5.25	%	$	4,522,755	$	64,838	5.70	%
Preferred equity investments		228,799		6,994	12.13	%		209,106		5,539	10.54	%
Mezzanine / junior participation loans		268,509		6,030	8.91	%		176,238		3,617	8.16	%
Other		32,026		311	3.85	%		76,710		943	4.89	%
Core interest-earning assets		8,182,558		114,524	5.55	%		4,984,809		74,937	5.98	%
Cash equivalents		391,352		186	0.19	%		346,140		534	0.61	%
Total interest-earning assets	$	8,573,910	$	114,710	5.31	%	$	5,330,949	$	75,471	5.63	%

Structured Business interest-bearing liabilities:
CLO	$	3,532,982	$	16,137	1.81	%	$	2,532,593	$	12,284	1.93	%
Warehouse lines		2,427,386		16,056	2.62	%		951,678		7,478	3.13	%
Unsecured debt		1,199,407		17,436	5.77	%		949,240		14,182	5.94	%
Trust preferred		154,336		1,194	3.07	%		154,336		1,308	3.37	%
Total interest-bearing liabilities	$	7,314,111		50,823	2.76	%	$	4,587,847		35,252	3.06	%
Net interest income			$	63,887					$	40,219

(1) Based on UPB for loans, amortized cost for securities and principal amount of debt.

(2) Weighted average yield calculated based on annualized interest income or expense divided by average carrying value.

Net Interest Income

The increase in interest income was mainly due to a $39.2 million increase from our Structured Business, primarily due to an increase in our average core interest-earning assets from loan originations exceeding loan runoff, partially offset by a decrease in the average yield on core interest-earning assets. The decrease in the average yield was due to lower rates on originations as compared to loan runoff, largely offset by higher fees on early runoff.

The increase in interest expense was mainly due to a $15.6 million increase from our Structured Business, primarily due to an increase in the average balance of our interest-bearing liabilities, due to growth in our loan portfolio and the issuance of additional unsecured debt. This was partially offset by a decrease in the average cost of our interest-bearing liabilities, mainly from decreases in LIBOR, the recent issuance of CLOs at lower rates and more favorable terms on warehouse debt.

Agency Business Revenue

The decrease in gain on sales, including fee-based services, net was primarily due to a 17% decrease ($212.5 million) in loan sales volume. The sales margin (fee-based services as a percentage of loan sales) of 1.62% this quarter was consistent with the prior year period sales margin of 1.63%.

58

The decrease in income from MSRs was primarily due to a 37% decrease in the MSR rate (income from MSRs as a percentage of loan commitment volume) from 2.77% to 1.75%, partially offset by a 21% increase ($327.9 million) in loan commitment volume. The decrease in the MSR rate was primarily due to lower Fannie Mae loan commitments, which carry a higher servicing fee, and a decrease in the average servicing fee on FHA loan commitments.

The increase in servicing revenue, net was primarily due to the growth in our servicing portfolio.

Other Expenses

The increase in employee compensation and benefits expense was primarily due to increases in headcount and incentive compensation as a result of the portfolio growth in both business segments.

The increase in selling and administrative expenses was primarily due to higher rent expense, consulting fees and travel expenses in both business segments, partially offset by a decrease in legal costs in our Structured Business as a result of a $2.5 million litigation settlement related to a hotel property that we sold in the third quarter of 2020.

We recorded net reversals this quarter in both our provision for loss sharing and provision for credit losses primarily due to improved market conditions and expected future forecasts in our CECL models for both business segments.

Loss on Sale of Real Estate

The loss recorded in the third quarter of 2020 was from the hotel property we sold in September 2020.

Income from Equity Affiliates

Income from equity affiliates in the third quarter of 2021 and 2020 primarily reflects income from our investment in a residential mortgage banking business of $5.4 million and $32.3 million, respectively. The income from this investment was driven by the historically low interest rates and strength in the residential housing market during COVID-19.

Provision for Income Taxes

In the three months ended September 30, 2021, we recorded a tax provision of $9.9 million, which consisted of current and deferred tax provisions of $3.6 million and $6.3 million, respectively. In the three months ended September 30, 2020, we recorded a tax provision of $17.8 million, which consisted of current and deferred tax provisions of $13.9 million and $3.9 million, respectively. The decrease in the tax provision was primarily due to lower income generated from our investment in a residential banking business and a decrease in the pre-tax income from our Agency Business.

Preferred Stock Dividends

The increase in preferred stock dividends was due to the issuances of our Series D and E preferred stock, which included a significantly larger number of shares than our Series A, B and C preferred stock that were redeemed in the second quarter of 2021.

Net Income Attributable to Noncontrolling Interest

The noncontrolling interest relates to the outstanding OP Units issued as part of the Acquisition. There were 16,325,095 OP Units and 17,632,371 OP Units outstanding as of September 30, 2021 and 2020, respectively, which represented 10.2% and 13.2% of our outstanding stock at September 30, 2021 and 2020, respectively.

59

Comparison of Results of Operations for the Nine Months Ended September 30, 2021 and 2020

The following table provides our consolidated operating results ($ in thousands):

	Nine Months Ended September 30,				Increase / (Decrease)
	2021		2020		Amount		Percent
Interest income	$	321,772	$	253,307	$	68,465	27	%
Interest expense		144,122		129,172		14,950	12	%
Net interest income		177,650		124,135		53,515	43	%
Other revenue:
Gain on sales, including fee-based services, net		86,102		60,566		25,536	42	%
Mortgage servicing rights		95,688		96,708		(1,020)	(1)	%
Servicing revenue, net		50,939		40,156		10,783	27	%
Property operating income		—		3,976		(3,976)	nm
Loss on derivative instruments, net		(7,320)		(58,852)		51,532	(88)	%
Other income, net		4,140		3,404		736	22	%
Total other revenue		229,549		145,958		83,591	57	%
Other expenses:
Employee compensation and benefits		128,647		101,652		26,995	27	%
Selling and administrative		33,707		29,013		4,694	16	%
Property operating expenses		421		4,778		(4,357)	(91)	%
Depreciation and amortization		5,349		5,830		(481)	(8)	%
Provision for loss sharing (net of recoveries)		(1,070)		21,706		(22,776)	nm
Provision for credit losses (net of recoveries)		(12,689)		59,510		(72,199)	nm
Total other expenses		154,365		222,489		(68,124)	(31)	%
Income before extinguishment of debt, sale of real estate, income from equity affiliates and income taxes		252,834		47,604		205,230	nm
Loss on extinguishment of debt		(1,370)		(3,546)		2,176	(61)	%
Gain (loss) on sale of real estate		1,228		(1,868)		3,096	nm
Income from equity affiliates		32,095		56,758		(24,663)	(43)	%
Provision for income taxes		(33,356)		(15,493)		(17,863)	115	%
Net income		251,431		83,455		167,976	nm
Preferred stock dividends		13,216		5,665		7,551	133	%
Net income attributable to noncontrolling interest		26,806		11,012		15,794	143	%
Net income attributable to common stockholders	$	211,409	$	66,778	$	144,631	nm

nm — not meaningful

60

The following table presents the average balance of our Structured Business interest-earning assets and interest-bearing liabilities, associated interest income (expense) and the corresponding weighted average yields ($ in thousands):

	Nine Months Ended September 30,
	2021						2020
	Average		Interest		W/A Yield /		Average		Interest		W/A Yield /
	Carrying		Income /		Financing		Carrying		Income /		Financing
	Value (1)		Expense		Cost (2)		Value (1)		Expense		Cost (2)
Structured Business interest-earning assets:
Bridge loans	$	6,434,423	$	261,168	5.43	%	$	4,323,098	$	192,860	5.96	%
Preferred equity investments		226,193		18,184	10.75	%		205,706		17,094	11.10	%
Mezzanine / junior participation loans		213,083		13,622	8.55	%		176,889		11,825	8.93	%
Other		29,898		964	4.31	%		87,519		3,941	6.01	%
Core interest-earning assets		6,903,597		293,938	5.69	%		4,793,212		225,720	6.29	%
Cash equivalents		352,391		480	0.18	%		387,332		2,523	0.87	%
Total interest-earning assets	$	7,255,988	$	294,418	5.42	%	$	5,180,544	$	228,243	5.89	%
Structured Business interest-bearing liabilities:
CLO	$	3,043,007	$	41,832	1.84	%	$	2,439,365	$	44,722	2.45	%
Warehouse lines		1,881,717		38,931	2.77	%		979,846		26,215	3.57	%
Unsecured debt		1,072,407		47,448	5.92	%		853,339		38,175	5.98	%
Trust preferred		154,336		3,584	3.10	%		154,336		4,693	4.06	%
Debt fund		—		—	—	%		29,891		1,585	7.08	%
Total interest-bearing liabilities	$	6,151,467		131,795	2.86	%	$	4,456,777		115,390	3.46	%
Net interest income			$	162,623					$	112,853

(1) Based on UPB for loans, amortized cost for securities and principal amount of debt.

(2) Weighted average yield calculated based on annualized interest income or expense divided by average carrying value.

Net Interest Income

The increase in interest income was mainly due to a $66.2 million increase from our Structured Business, primarily due to an increase in our average core interest-earning assets from loan originations exceeding loan runoff, partially offset by a decrease in the average yield on core interest-earning assets. The decrease in the average yield was due to lower rates on originations as compared to loan runoff and a decrease in the average LIBOR.

The increase in interest expense was mainly due to a $16.4 million increase from our Structured Business, primarily due to an increase in the average balance of our interest-bearing liabilities, due to growth in our loan portfolio and the issuance of additional unsecured debt. This was partially offset by a decrease in the average cost of our interest-bearing liabilities, mainly from decreases in LIBOR, the recent issuance of CLOs at lower rates and more favorable terms on warehouse debt.

Agency Business Revenue

The increase in gain on sales, including fee-based services, net was primarily due a 37% increase in the sales margin from 1.45% to 1.99%, as a result of higher margins on Private Label and SFR loan sales, and a 4% increase ($161.5 million) in loan sales volume.

The decrease in income from MSRs was primarily due to a 12% decrease in the MSR rate from 2.42% to 2.12%, largely offset by a 13% increase in loan commitment volume. The decrease in the MSR rate was primarily due to lower Fannie Mae loan commitments, which carry a higher servicing fee.

The increase in servicing revenue, net was primarily due to the growth in our servicing portfolio.

61

Other Revenue

The losses on derivative instruments in both 2021 and 2020 were primarily from our Agency Business and were predominantly from losses recognized on our Swaps held in connection with our Private Label loans.

Other Expenses

The increase in employee compensation and benefits expense was primarily due to increases in headcount and incentive compensation as a result of the portfolio growth in both business segments, as well as commissions in our Agency Business in connection with higher loan sales volume and sales margins.

The increase in selling and administrative expenses was primarily due to higher rent expense in both business segments. Administrative expenses were also lower in 2020 as a result of the COVID-19 pandemic due to travel restrictions and fewer events. We also recorded a $2.5 million litigation settlement related to a hotel property that we sold in the third quarter of 2020.

The decreases in both provision for loss sharing and provision for credit losses were primarily due to the reversal of CECL reserves in both business segments in connection with improved market conditions and expected future forecasts.

Loss on Extinguishment of Debt

The loss on extinguishment of debt in both periods was deferred financing fees recognized in connection with the unwind of CLOs, along with a loss recognized in connection with the unwind of the Luxembourg commercial real estate debt fund in 2020.

Gain (loss) on Sale of Real Estate

The gain recorded in 2021 was from the sale of a repurchased Fannie Mae loan. The loss recorded in 2020 was from a hotel property we sold in September 2020.

Income from Equity Affiliates

Income from equity affiliates in 2021 and 2020 primarily reflects income from our investment in a residential mortgage banking business of $32.7 million and $56.1 million, respectively. The income from this investment was driven by the historically low interest rates and strength in the residential housing market during COVID-19.

Provision for Income Taxes

In the nine months ended September 30, 2021, we recorded a tax provision of $33.4 million, which consisted of current and deferred tax provisions of $22.7 million and $10.7 million, respectively. In the nine months ended September 30, 2020, we recorded a tax provision of $15.5 million, which consisted of a current tax provision of $20.7 million and a deferred tax benefit of $5.2 million. The increase in the tax provision was primarily due to an increase in pre-tax income from our Agency Business, partially offset by lower income generated from our investment in a residential banking business in 2021, compared to 2020.

Preferred Stock Dividends

The increase in preferred stock dividends was due to the issuances of our Series D and E preferred stock, which included a significantly larger number of shares than our Series A, B and C preferred stock that were redeemed in the second quarter of 2021.

Net Income Attributable to Noncontrolling Interest

The noncontrolling interest relates to the outstanding OP Units issued as part of the Acquisition. There were 16,325,095 OP Units and 17,632,371 OP Units outstanding as of September 30, 2021 and 2020, respectively, which represented 10.2% and 13.2% of our outstanding stock at September 30, 2021 and 2020, respectively.

62

Liquidity and Capital Resources

Sources of Liquidity. Liquidity is a measure of our ability to meet our potential cash requirements, including ongoing commitments to repay borrowings, satisfaction of collateral requirements under the Fannie Mae DUS risk-sharing agreement and, as an approved designated seller/servicer of Freddie Mac's SBL program, operational liquidity requirements of the GSE agencies, fund new loans and investments, fund operating costs and distributions to our stockholders, as well as other general business needs. Our primary sources of funds for liquidity consist of proceeds from equity and debt offerings, proceeds from CLOs and securitizations, debt facilities and cash flows from operations. We closely monitor our liquidity position and believe our existing sources of funds and access to additional liquidity will be adequate to meet our liquidity needs.

We are monitoring the COVID-19 pandemic and its impact on our financing sources, borrowers and their tenants, and the economy as a whole. The magnitude and duration of the pandemic, and its impact on our operations and liquidity, are uncertain and continue to evolve. To the extent that our financing sources, borrowers and their tenants continue to be impacted by the pandemic, or by the other risks disclosed in our filings with the SEC, it would have a material adverse effect on our liquidity and capital resources.

We had approximately $8.58 billion in total structured debt outstanding at September 30, 2021. Of this total, approximately $6.28 billion, or 73%, does not contain mark-to-market provisions and is comprised of non-recourse CLO vehicles, senior unsecured debt and junior subordinated notes, the majority of which have maturity dates in 2022, or later. The remaining $2.30 billion of debt is in warehouse and repurchase facilities with several different banks that we have long-standing relationships with. While we expect to extend or renew all of our facilities as they mature, we cannot provide assurance that they will be extended or renewed on as favorable terms.

In addition to our ability to extend our warehouse and repurchase facilities, we have approximately $800 million in cash and available liquidity as well as other liquidity sources, including our $26.21 billion agency servicing portfolio, which is mostly prepayment protected and generates approximately $120 million per year in recurring cash flow.

At September 30, 2021, we had $65.1 million of securities financed with $32.2 million of debt that was subject to margin calls related to changes in interest spreads.

To maintain our status as a REIT under the Internal Revenue Code, we must distribute annually at least 90% of our REIT-taxable income. These distribution requirements limit our ability to retain earnings and thereby replenish or increase capital for operations. However, we believe that our capital resources and access to financing will provide us with financial flexibility and market responsiveness at levels sufficient to meet current and anticipated capital and liquidity requirements.

Cash Flows. Cash flows used in operating activities were $0.4 million during the nine months ended September 30, 2021 as net income of $251.4 million was substantially offset by net cash outflows of $227.9 million as a result of loan originations exceeding loan sales in our Agency Business, as well as certain other non-cash net income adjustments.

Cash flows used in investing activities totaled $3.76 billion during the nine months ended September 30, 2021. Loan and investment activity (originations and payoffs/paydowns) comprise the majority of our investing activities. Loan originations from our Structured Business totaling $5.17 billion, net of payoffs and paydowns of $1.35 billion, resulted in net cash outflows of $3.83 billion.

Cash flows provided by financing activities totaled $4.17 billion during the nine months ended September 30, 2021 and consisted primarily of net proceeds of $2.21 billion from CLO activity, net cash inflows of $1.17 billion from debt facility activities (financed loan originations were greater than facility paydowns) and $1.15 billion of proceeds from the issuance of common and preferred stock and senior unsecured notes, partially offset by $161.4 million of distributions to our stockholders and OP Unit holders and $92.8 million for the redemption of preferred stock.

Agency Business Requirements. The Agency Business is subject to supervision by certain regulatory agencies. Among other things, these agencies require us to meet certain minimum net worth, operational liquidity and restricted liquidity collateral requirements, purchase and loss obligations and compliance with reporting requirements. Our adjusted net worth and operational liquidity exceeded the agencies' requirements as of September 30, 2021. Our restricted liquidity and purchase and loss obligations were satisfied with letters of credit totaling $50.0 million and $17.0 million of cash collateral. See Note 13 for details about our performance regarding these requirements.

63

We also enter into contractual commitments with borrowers providing rate lock commitments while simultaneously entering into forward sale commitments with investors. These commitments are outstanding for short periods of time (generally less than 60 days) and are described in Note 11.

Debt Facilities. We maintain various forms of short-term and long-term financing arrangements. Borrowings underlying these arrangements are primarily secured by a significant amount of our loans and investments and substantially all of our loans held-for-sale. The following is a summary of our debt facilities (in thousands):

	September 30, 2021
							Maturity
Debt Instruments	Commitment		UPB (1)			Available	Dates (2)
Structured Business
Credit and repurchase facilities	$	3,651,149	$	2,301,103	$	1,350,046	2021 - 2024
Collateralized loan obligations (3)		4,743,580		4,743,580		—	2021 - 2026
Senior unsecured notes		1,115,750		1,115,750		—	2023 - 2027
Convertible senior unsecured notes		264,000		264,000		—	2022
Junior subordinated notes		154,336		154,336		—	2034 - 2037
Structured Business total		9,928,815		8,578,769		1,350,046
Agency Business
Credit and repurchase facilities (4)		2,301,259		1,104,129		1,197,130	2021 - 2022
Consolidated total	$	12,230,074	$	9,682,898	$	2,547,176

(1) Excludes the impact of deferred financing costs.

(2) See Note 13 for a breakdown of debt maturities by year.

(3) Maturity dates represent the weighted average remaining maturity based on the underlying collateral as of September 30, 2021.

(4) The ASAP agreement we have with Fannie Mae has no expiration date.

We utilize our credit and repurchase facilities primarily to finance our loan originations on a short-term basis prior to loan securitizations, including through CLOs. The timing, size and frequency of our securitizations impact the balances of these borrowings and produce some fluctuations. The following table provides additional information regarding the balances of our borrowings (in thousands):

	Quarterly				Maximum
	Average		End of Period		UPB at Any
Quarter Ended	UPB		UPB		Month-End
September 30, 2021	$	3,191,129	$	3,409,598	$	3,409,598
June 30, 2021		2,327,114		3,405,232		2,588,456
March 31, 2021		2,177,350		2,220,307		2,262,160
December 31, 2020		1,939,759		2,238,722		2,238,722
September 30, 2020		1,406,219		1,454,419		1,454,419

Our debt facilities, including their restrictive covenants, are described in Note 9.

Off-Balance Sheet Arrangements. At September 30, 2021, we had no off-balance sheet arrangements.

Contractual Obligations. During the nine months ended September 30, 2021, the following significant changes were made to our contractual obligations disclosed in our 2020 Annual Report: (1) closed three CLOs issuing $2.57 billion of investment grade notes; (2) unwound a CLO redeeming $356.2 million of outstanding notes; (3) issued $270.0 million of 4.50% senior unsecured notes; (4) issued $175.0 million of 5.00% senior unsecured notes; and (5) entered into new and modified existing debt facilities.

Refer to Note 13 for a description of our debt maturities by year and unfunded commitments as of September 30, 2021.

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Derivative Financial Instruments

We enter into derivative financial instruments in the normal course of business to manage the potential loss exposure caused by fluctuations of interest rates. See Note 11 for details.

Critical Accounting Policies

Please refer to Note 2 of the Notes to Consolidated Financial Statements in our 2020 Annual Report for a discussion of our critical accounting policies. During the nine months ended September 30, 2021, there were no material changes to these policies.

Non-GAAP Financial Measures

Distributable Earnings.  We are presenting distributable earnings because we believe it is an important supplemental measure of our operating performance and is useful to investors, analysts and other parties in the evaluation of REITs and their ability to provide dividends to stockholders. Dividends are one of the principal reasons investors invest in REITs. To maintain REIT status, REITs are required to distribute at least 90% of their REIT-taxable income. We consider distributable earnings in determining our quarterly dividend and believe that, over time, distributable earnings is a useful indicator of our dividends per share.

We define distributable earnings as net income (loss) attributable to common stockholders computed in accordance with GAAP, adjusted for accounting items such as depreciation and amortization (adjusted for unconsolidated joint ventures), non-cash stock-based compensation expense, income from MSRs, amortization and write-offs of MSRs, gains/losses on derivative instruments primarily associated with Private Label loans not yet sold and securitized, the tax impact on cumulative gains/losses on derivative instruments associated with Private Label loans sold during the periods presented, changes in fair value of GSE-related derivatives that temporarily flow through earnings, deferred tax provision (benefit), CECL provisions for credit losses (adjusted for realized losses as described below) and amortization of the convertible senior notes conversion option. We also add back one-time charges such as acquisition costs and one-time gains/losses on the early extinguishment of debt and redemption of preferred stock.

We reduce distributable earnings for realized losses in the period we determine that a loan is deemed nonrecoverable in whole or in part. Loans are deemed nonrecoverable upon the earlier of: (i) when the loan receivable is settled (i.e. when the loan is repaid, or in the case of foreclosure, when the underlying asset is sold); or (ii) when we determine that it is nearly certain that all amounts due will not be collected. The realized loss amount is equal to the difference between the cash received, or expected to be received, and the book value of the asset.

Distributable earnings is not intended to be an indication of our cash flows from operating activities (determined in accordance with GAAP) or a measure of our liquidity, nor is it entirely indicative of funding our cash needs, including our ability to make cash distributions. Our calculation of distributable earnings may be different from the calculations used by other companies and, therefore, comparability may be limited.

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Distributable earnings is as follows ($ in thousands, except share and per share data):

	Three Months Ended September 30,				Nine Months Ended September 30,
	2021		2020		2021		2020
Net income attributable to common stockholders	$	72,804	$	81,997	$	211,409	$	66,778
Adjustments:
Net income attributable to noncontrolling interest		8,347		13,836		26,806		11,012
Income from mortgage servicing rights		(32,453)		(42,357)		(95,688)		(96,708)
Deferred tax provision (benefit)		6,256		3,853		10,692		(5,172)
Amortization and write-offs of MSRs		23,757		15,456		62,088		48,739
Depreciation and amortization		2,705		2,867		8,137		8,731
Loss on extinguishment of debt		—		—		1,370		3,546
Provision for credit losses, net		(9,867)		(11,137)		(18,210)		79,144
Loss on derivative instruments, net		1,492		753		1,484		44,113
Stock-based compensation		2,612		1,854		7,986		7,286
Loss on redemption of preferred stock		—		—		3,479		—
Distributable earnings (1)	$	75,653	$	67,122	$	219,553	$	167,469
Diluted distributable earnings per share (1)	$	0.47	$	0.50	$	1.44	$	1.26
Diluted weighted average shares outstanding (1)		160,270,905		133,997,087		152,691,461		132,401,315

(1) Amounts are attributable to common stockholders and OP Unit holders. The OP Units are redeemable for cash, or at our option for shares of our common stock on a one-for-one basis.

Item 3.        Quantitative and Qualitative Disclosures About Market Risk

We disclosed a quantitative and qualitative analysis regarding market risk in Item 7A of our 2020 Annual Report. That information is supplemented by the information included above in Item 2 of this report. Other than the developments described thereunder, there have been no material changes in our exposure to market risk since December 31, 2020. The following table projects the potential impact on interest for a 12-month period, assuming an instantaneous increases of 25 basis points and 50 basis points in LIBOR (in thousands). Since LIBOR rates were close to zero at September 30, 2021, we have excluded the impact of a decrease in LIBOR.

	Assets (Liabilities)		25 Basis		50 Basis
	Subject to Interest		Point		Point
	Rate Sensitivity (1)		Increase		Increase
Interest income from loans and investments	$	9,169,007	$	7,281	$	20,062
Interest expense from debt obligations		(8,578,769)		15,722		33,220
Impact to net interest income				(8,441)		(13,158)
Interest from cash, restricted cash and escrows (2)		2,734,778		6,837		13,674
Net change to interest			$	(1,604)	$	516

(1) Represents the UPB of our loan portfolio and the principal balance of our debt.

(2) The interest rates on these balances are not indexed to LIBOR and are negotiated periodically with each corresponding bank based on certain benchmark rates, therefore, these amounts are provided for illustrative purposes only since the actual amounts earned could be materially different from the amounts provided.

Based on our structured loans and investments and corresponding debt as of September 30, 2021, increases in LIBOR of 0.25% and 0.50% would decrease our annual net interest income as a result of LIBOR floors on a portion of our loan portfolio that are above LIBOR as of September 30, 2021, which would limit the effect of an increase on interest income. Conversely, these LIBOR floors would reduce the impact on interest income from decreases in LIBOR, which would result in increases to net interest income.

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We enter into interest rate swaps to hedge our exposure to changes in interest rates inherent in (1) our held-for-sale Agency Business Private Label loans from the time the loans are rate locked until sale and securitization, and (2) our Agency Business SFR – fixed rate loans from the time the loans are originated until the time they can be financed with match term fixed rate securitized debt. Our interest rate swaps are tied to the five-year and ten-year swap rates and hedge our exposure to Private Label loans until the time they are securitized and changes in the fair value of our held-for-sale Agency Business SFR – fixed rate loans. A 25 basis point and a 50 basis point increase to the five-year and ten-year swap rates on our interest rate swaps held at September 30, 2021 would have resulted in a gain of $4.4 million and $8.7 million, respectively, in the nine months ended September 30, 2021, while a 25 basis point and a 50 basis point decrease in the rates would have resulted in a loss of $4.5 million and $9.1 million, respectively.

Our Agency Business originates, sells and services a range of multifamily finance products with Fannie Mae, Freddie Mac and HUD. Our loans held-for-sale to these agencies are not currently exposed to interest rate risk during the loan commitment, closing and delivery process. The sale or placement of each loan to an investor is negotiated prior to closing on the loan with the borrower, and the sale or placement is generally effectuated within 60 days of closing. The coupon rate for the loan is set after we establish the interest rate with the investor.

In addition, the fair value of our MSRs is subject to market risk since a significant driver of the fair value of these assets is the discount rates. A 100 basis point increase in the weighted average discount rate would decrease the fair value of our MSRs by $16.2 million as of September 30, 2021, while a 100 basis point decrease would increase the fair value by $17.2 million.

Item 4.         Controls and Procedures

Management, with the participation of our chief executive officer and chief financial officer, has evaluated the effectiveness of our disclosure controls and procedures at September 30, 2021. Based on this evaluation, our chief executive officer and chief financial officer have concluded that our disclosure controls and procedures were effective as of September 30, 2021.

There were no changes in our internal control over financial reporting during the quarter ended September 30, 2021 that have materially affected, or are reasonably likely to materially affect, our internal controls over financial reporting.

PART II.  OTHER INFORMATION

Item 1.       Legal Proceedings

We are not involved in any material litigation nor, to our knowledge, is any material litigation threatened against us other than the litigation described in Note 13.

Item 1A.    Risk Factors

There have been no material changes to the risk factors set forth in Item 1A of our 2020 Annual Report.

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Item 6.         Exhibits

Exhibit #	Description
3.1	Articles of Incorporation of Arbor Realty Trust, Inc. (1)
3.2	Articles of Amendment to Articles of Incorporation of Arbor Realty Trust, Inc. (2)
3.3	Amended and Restated Bylaws of Arbor Realty Trust, Inc. (3)
3.4	Articles Supplementary of 6.375% Series D Cumulative Redeemable Preferred Stock. (4)
3.5	Articles Supplementary of 6.25% Series E Cumulative Redeemable Preferred Stock (5)
3.6	Articles Supplementary of 6.25% Series F Fixed-to-Floating Rate Cumulative Redeemable Preferred Stock (6)
3.7	Specimen 6.375% Series D Cumulative Redeemable Preferred Stock Certificate (7)
4.1	Specimen 6.25% Series E Cumulative Redeemable Preferred Stock Certificate (8)
4.2	Specimen 6.25% Series F Fixed-to-Floating Rate Cumulative Redeemable Preferred Stock Certificate (9)
10.1	Fourth Amended and Restated Agreement of Limited Partnership of Arbor Realty Limited Partnership, dated June 25, 2021, by and among Arbor Realty GPOP, Inc., Arbor Realty LPOP, Inc., Arbor Commercial Mortgage, LLC and Arbor Realty Trust, Inc. (10)
10.2	First Amendment dated August 25, 2021 to the Fourth Amended and Restated Agreement of Limited Partnership of Arbor Realty Limited Partnership, dated June 25, 2021, by and among Arbor Realty GPOP, Inc., Arbor Realty LPOP, Inc., Arbor Commercial Mortgage, LLC and Arbor Realty Trust, Inc.
10.3	Second Amendment dated October 12, 2021 to the Fourth Amended and Restated Agreement of Limited Partnership of Arbor Realty Limited Partnership, dated June 25, 2021, by and among Arbor Realty GPOP, Inc., Arbor Realty LPOP, Inc., Arbor Commercial Mortgage, LLC and Arbor Realty Trust, Inc.
31.1	Certification of Chief Executive Officer pursuant to Exchange Act Rule 13a-14.
31.2	Certification of Chief Financial Officer pursuant to Exchange Act Rule 13a-14.
32	Certifications of Chief Executive Officer and Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
101.1	Financial statements from the Quarterly Report on Form 10-Q of Arbor Realty Trust, Inc. for the quarter ended September 30, 2021, filed on October 29, 2021, formatted in Inline Extensible Business Reporting Language (“XBRL”): (i) the Consolidated Balance Sheets, (ii) the Consolidated Statements of Income, (iii) the Consolidated Statements of Changes in Equity, (iv) the Consolidated Statements of Cash Flows and (v) the Notes to Consolidated Financial Statements.
104	Cover Page Interactive Data File (formatted in Inline XBRL and contained in Exhibit 101)

In accordance with Item 601 (b)(4)(iii)(A) of Regulation S-K, certain instruments with respect to long-term debt of the registrant have been omitted but will be furnished to the Securities and Exchange Commission upon request.

(1) Incorporated by reference to Registration Statement on Form S-11 (No. 333-110472), as amended filed November 13, 2003.

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(2) Incorporated by reference to the Registrant’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2007 filed August 7, 2007.

(3) Incorporated by reference to Exhibit 3.1 of Form 8-K filed December 1, 2020.

(4) Incorporated by reference to Exhibit 3.7 on Form 8-A filed June 2, 2021.

(5) Incorporated by reference to Exhibit 3.5 on Form 8-A filed August 11, 2021.

(6) Incorporated by reference to Exhibit 3.6 on Form 8-A filed October 12, 2021.

(7) Incorporated by reference to Exhibit 4.1 on Form 8-A filed June 2, 2021.

(8) Incorporated by reference to Exhibit 4.1 on Form 8-A filed August 11, 2021.

(9) Incorporated by reference to Exhibit 4.1 on Form 8-A filed October 12, 2021.

(10) Incorporated by reference to Exhibit 10.2 on Form S-4 (No. 333-257494) filed June 28, 2021.

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

	ARBOR REALTY TRUST, INC.
Date: October 29, 2021	By:	/s/ Ivan Kaufman
		Ivan Kaufman
		Chief Executive Officer
Date: October 29, 2021	By:	/s/ Paul Elenio
		Paul Elenio
		Chief Financial Officer

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EX-10.2

Exhibit 10.2

AMENDMENT NO. 1 TO THE

FOURTH AMENDED AND RESTATED

AGREEMENT OF LIMITED PARTNERSHIP

OF

ARBOR REALTY LIMITED PARTNERSHIP

August 25, 2021

This Amendment No. 1 to the Fourth Amended and Restated Agreement of Limited Partnership of Arbor Realty Limited Partnership (this “Amendment”) is made as of August 25, 2021 by Arbor Realty GPOP, Inc., a Delaware corporation, as the General Partner of Arbor Realty Limited Partnership, a Delaware limited partnership (the “Partnership”), pursuant to the Fourth Amended and Restated Agreement of Limited Partnership of Arbor Realty Limited Partnership, dated as of June 25, 2021 (the “Agreement”), by and among Arbor Realty GPOP, Inc., Arbor Realty LPOP, Inc. (the “Initial Limited Partner”), Arbor Commercial Mortgage, LLC and Arbor Realty Trust, Inc. (the “Parent REIT”). All capitalized terms used in this Amendment and not otherwise defined herein shall have the respective meanings assigned to such terms in the Agreement.

WHEREAS, Section 4.3E of the Agreement generally prohibits the Parent REIT from issuing Preferred Shares unless (i) the Parent REIT contributes the cash proceeds or other consideration received from the issuance of such Preferred Shares to the General Partner or the Initial Limited Partner and (ii) the General Partner or the Initial Limited Partner, as the case may be, contributes such proceeds to the Partnership in exchange for Partnership Units with designations, preferences and other rights, terms and provisions that are substantially the same as the designations, preferences and other rights, terms and provisions of such Preferred Shares.

WHEREAS, Section 4.2A of the Agreement authorizes the General Partner to issue additional Partnership Interests, in the form of Partnership Units, for any Partnership purpose, at any time or from time to time, to the Partners (including the General Partner) or to other Persons, for such consideration and on such terms and conditions as shall be established by the General Partner in its sole and absolute discretion, all without the approval of any Limited Partners, with such designations, preferences and relative, participating, optional or other special rights, powers and duties as shall be determined by the General Partner, in its sole and absolute discretion without the approval of any Limited Partner, and set forth in the Agreement or a written document thereafter attached to and made an exhibit to the Agreement (each, a “Partnership Unit Designation”).

WHEREAS, Section 4.2A of the Agreement authorizes the General Partner to amend Exhibit A to reflect the issuance of any additional Partnership Interest.

WHEREAS, Section 7.3C of the Agreement permits the General Partner, without the consent of the Limited Partners, to amend the Agreement for the purpose of reflecting the issuance of additional Partnership Interests in accordance with Section 4.2 and to reflect a change that is of an inconsequential nature and does not adversely affect the Limited Partners in any material respect.

WHEREAS, pursuant to and in accordance with Section 4.2A and Section 7.3C of the Agreement, the General Partner is causing the Partnership to issue 575,000 additional Partnership Units to the General Partner and 5,175,000 additional Partnership Units to the Initial Limited Partner, designated as Series E Preferred Units, in connection with the issuance by the Parent REIT of 5,750,000 shares of its 6.25% Series E Cumulative Redeemable Preferred Stock, $0.01 par value per share, and the contribution of the proceeds therefrom to the Partnership.

NOW, THEREFORE, in consideration of the premises and for other good and valuable consideration, the receipt and sufficiency of which hereby are acknowledged, the Agreement is hereby amended as follows:

A.            Amendments to Agreement.

1.                                      Exhibit A of the Agreement is hereby deleted and replaced with Exhibit A attached to this Amendment.

2.The exhibit index of the Agreement is hereby deleted and replaced with the following:

EXHIBITS
Exhibit A	PARTNERS AND PARTNERSHIP UNITS	A-1
Exhibit B	EXAMPLES REGARDING ADJUSTMENT FACTOR	B-1
Exhibit C	NOTICE OF REDEMPTION	C-1
Exhibit D	FORM OF UNIT CERTIFICATE	D-1
Exhibit E	PARTNERSHIP UNIT DESIGNATION OF THE SERIES D PREFERRED UNITS	E-1
Exhibit F	PARTNERSHIP UNIT DESIGNATION OF THE SERIES E PREFERRED UNITS	F-1

3.The Partnership Unit Designation of the Series E Preferred Units, attached to this Amendment as Exhibit F, is hereby added to the Agreement to reflect the issuance of the Series E Preferred Units.

B.            No Other Amendments.  Except as set forth in Part A above, all the terms and provisions of the Agreement shall continue in full force and effect.

C.             Governing Law.  This Amendment shall be construed and enforced in accordance with and governed by the laws of the State of Delaware, without regard to the principles of conflicts of law. In the event of a conflict between any provision of this Amendment and any non-mandatory provision of the Delaware Revised Uniform Limited Partnership Act (6 Del. C. § 17-101 et seq.), as it may be amended from time to time, and any successor to such statute, the provisions of this Amendment shall control and take precedence.

[Remainder of page intentionally left blank.]

IN WITNESS WHEREOF, this Amendment has been executed as of the date first written above.

GENERAL PARTNER:
ARBOR REALTY GPOP, INC.
By:	/s/ Paul Elenio
Name:	Paul Elenio
Title:	Chief Financial Officer

[Signature Page to Amendment No. 1 to the Fourth Amended and Restated Agreement of Limited Partnership of
Arbor Realty Limited Partnership]

As of August 25, 2021

Exhibit A

PARTNERS AND PARTNERSHIP UNITS

Name and Address of Partners	Partnership Units (Type and Amount)	Percentage Interests
General Partner:
ARBOR REALTY GPOP, INC. 333 Earle Ovington Boulevard, Suite 900 Uniondale, NY 11553	[__________] Common Units [__________] Series D Preferred Units [__________] Series E Preferred Units	[__]%
Limited Partners:
ARBOR REALTY LPOP, INC. 333 Earle Ovington Boulevard, Suite 900 Uniondale, NY 11553	[__________] Common Units [__________]Series D Preferred Units [__________] Series E Preferred Units	[__]%
ARBOR COMMERCIAL MORTGAGE, LLC [___________] [___________]	[__________] Common Units	[__]%

Exhibit F

(see attached)

EX-10.3

Exhibit 10.3

AMENDMENT NO. 2 TO THE

FOURTH AMENDED AND RESTATED

AGREEMENT OF LIMITED PARTNERSHIP

OF

ARBOR REALTY LIMITED PARTNERSHIP

October 12, 2021

This Amendment No. 2 to the Fourth Amended and Restated Agreement of Limited Partnership of Arbor Realty Limited Partnership (this “Amendment”) is made as of October 12, 2021 by Arbor Realty GPOP, Inc., a Delaware corporation, as the General Partner of Arbor Realty Limited Partnership, a Delaware limited partnership (the “Partnership”), pursuant to the Fourth Amended and Restated Agreement of Limited Partnership of Arbor Realty Limited Partnership, dated as of June 25, 2021, as amended on August 25, 2021 (the “Agreement”), by and among Arbor Realty GPOP, Inc., Arbor Realty LPOP, Inc. (the “Initial Limited Partner”), Arbor Commercial Mortgage, LLC and Arbor Realty Trust, Inc. (the “Parent REIT”). All capitalized terms used in this Amendment and not otherwise defined herein shall have the respective meanings assigned to such terms in the Agreement.

WHEREAS, Section 4.3E of the Agreement generally prohibits the Parent REIT from issuing Preferred Shares unless (i) the Parent REIT contributes the cash proceeds or other consideration received from the issuance of such Preferred Shares to the General Partner or the Initial Limited Partner and (ii) the General Partner or the Initial Limited Partner, as the case may be, contributes such proceeds to the Partnership in exchange for Partnership Units with designations, preferences and other rights, terms and provisions that are substantially the same as the designations, preferences and other rights, terms and provisions of such Preferred Shares.

WHEREAS, Section 4.2A of the Agreement authorizes the General Partner to issue additional Partnership Interests, in the form of Partnership Units, for any Partnership purpose, at any time or from time to time, to the Partners (including the General Partner) or to other Persons, for such consideration and on such terms and conditions as shall be established by the General Partner in its sole and absolute discretion, all without the approval of any Limited Partners, with such designations, preferences and relative, participating, optional or other special rights, powers and duties as shall be determined by the General Partner, in its sole and absolute discretion without the approval of any Limited Partner, and set forth in the Agreement or a written document thereafter attached to and made an exhibit to the Agreement (each, a “Partnership Unit Designation”).

WHEREAS, Section 4.2A of the Agreement authorizes the General Partner to amend Exhibit A to reflect the issuance of any additional Partnership Interest.

WHEREAS, Section 7.3C of the Agreement permits the General Partner, without the consent of the Limited Partners, to amend the Agreement for the purpose of reflecting the issuance of additional Partnership Interests in accordance with Section 4.2 and to reflect a change that is of an inconsequential nature and does not adversely affect the Limited Partners in any material respect.

WHEREAS, pursuant to and in accordance with Section 4.2A and Section 7.3C of the Agreement, the General Partner is causing the Partnership to issue 805,000 additional Partnership Units to the General Partner and 7,245,000 additional Partnership Units to the Initial Limited Partner, designated as Series F Preferred Units, in connection with the issuance by the Parent REIT of 8,050,000 shares of its 6.25% Series F Fixed-to-Floating Rate Cumulative Redeemable Preferred Stock, $0.01 par value per share, and the contribution of the proceeds therefrom to the Partnership.

NOW, THEREFORE, in consideration of the premises and for other good and valuable consideration, the receipt and sufficiency of which hereby are acknowledged, the Agreement is hereby amended as follows:

A.      Amendments to Agreement.

1.Exhibit A of the Agreement is hereby deleted and replaced with Exhibit A attached to this Amendment.

2.The exhibit index of the Agreement is hereby deleted and replaced with the following:

EXHIBITS
Exhibit A	PARTNERS AND PARTNERSHIP UNITS	A-1
Exhibit B	EXAMPLES REGARDING ADJUSTMENT FACTOR	B-1
Exhibit C	NOTICE OF REDEMPTION	C-1
Exhibit D	FORM OF UNIT CERTIFICATE	D-1
Exhibit E	PARTNERSHIP UNIT DESIGNATION OF THE SERIES D PREFERRED UNITS	E-1
Exhibit F	PARTNERSHIP UNIT DESIGNATION OF THE SERIES E PREFERRED UNITS	F-1
Exhibit G	PARTNERSHIP UNIT DESIGNATION OF THE SERIES F PREFERRED UNITS	G-1

3.The Partnership Unit Designation of the Series F Preferred Units, attached to this Amendment as Exhibit G, is hereby added to the Agreement to reflect the issuance of the Series F Preferred Units.

B.     No Other Amendments.  Except as set forth in Part A above, all the terms and provisions of the Agreement shall continue in full force and effect.

C.     Governing Law.  This Amendment shall be construed and enforced in accordance with and governed by the laws of the State of Delaware, without regard to the principles of conflicts of law. In the event of a conflict between any provision of this Amendment and any non-mandatory provision of the Delaware Revised Uniform Limited Partnership Act (6 Del. C. § 17-101 et seq.), as it may be amended from time to time, and any successor to such statute, the provisions of this Amendment shall control and take precedence.

[Remainder of page intentionally left blank.]

IN WITNESS WHEREOF, this Amendment has been executed as of the date first written above.

GENERAL PARTNER:
ARBOR REALTY GPOP, INC.
By:	/s/Paul Elenio
Name:	Paul Elenio
Title:	Chief Financial Officer

[Signature Page to Amendment No. 2 to the Fourth Amended and Restated Agreement of Limited Partnership of Arbor Realty Limited Partnership]

As of October 12, 2021

Exhibit A

PARTNERS AND PARTNERSHIP UNITS

o
Name and Address of Partners	Partnership Units (Type and Amount)	Percentage Interests
General Partner:
ARBOR REALTY GPOP, INC. 333 Earle Ovington Boulevard, Suite 900 Uniondale, NY 11553	[__________] Common Units [__________] Series D Preferred Units [__________] Series E Preferred Units [__________] Series F Preferred Units	[__]%
Limited Partners:
ARBOR REALTY LPOP, INC. 333 Earle Ovington Boulevard, Suite 900 Uniondale, NY 11553	[__________] Common Units [__________] Series D Preferred Units [__________] Series E Preferred Units [__________] Series F Preferred Units	[__]%
ARBOR COMMERCIAL MORTGAGE, LLC 333 Earle Ovington Boulevard, Suite 900 Uniondale, NY 11553	[__________] Common Units	[__]%

Exhibit G

(see attached)

EX-31.1

EXHIBIT 31.1

Certification of Chief Executive Officer

I, Ivan Kaufman, certify that:

1. I have reviewed this quarterly report on Form 10-Q of Arbor Realty Trust, Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d) Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

5. The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):

a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

Date:       October 29, 2021	By:	/s/ Ivan Kaufman
		Ivan Kaufman
		Chief Executive Officer

EX-31.2

EXHIBIT 31.2

Certification of Chief Financial Officer

I, Paul Elenio, certify that:

1. I have reviewed this quarterly report on Form 10-Q of Arbor Realty Trust, Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d) Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

5. The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):

a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

Date:       October 29, 2021	By:	/s/ Paul Elenio
		Paul Elenio
		Chief Financial Officer

EX-32

EXHIBIT 32

Certifications of Chief Executive Officer and Chief Financial Officer Pursuant to

18 U.S.C. Section 1350,

as Adopted Pursuant to

Section 906 of the Sarbanes-Oxley Act of 2002

In connection with the Quarterly Report on Form 10-Q of Arbor Realty Trust, Inc. (the “Company”) for the quarter ended September 30, 2021 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), each of the undersigned officers of the Company, hereby certifies, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that, to the best of our knowledge:

1. The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

2. The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date:       October 29, 2021	By:	/s/ Ivan Kaufman
		Ivan Kaufman
		Chief Executive Officer
Date:       October 29, 2021	By:	/s/ Paul Elenio
		Paul Elenio
		Chief Financial Officer

This certification is being furnished and shall not be deemed filed by the Company for purposes of Section 18 of the Securities Exchange Act of 1934, as amended.

A signed original of this certification required by Section 906 has been provided to the Company and will be retained by the Company and furnished to the Securities and Exchange Commission or its staff upon request.

XML

Document and Entity Information - shares	9 Months Ended
	Sep. 30, 2021	Oct. 22, 2021
Document Information [Line Items]
Document Type	10-Q
Document Quarterly Report	true
Document Period End Date	Sep. 30, 2021
Document Transition Report	false
Entity File Number	001-32136
Entity Registrant Name	Arbor Realty Trust, Inc.
Entity Incorporation, State or Country Code	MD
Entity Tax Identification Number	20-0057959
Entity Address, Address Line One	333 Earle Ovington Boulevard
Entity Address, Address Line Two	Suite 900
Entity Address, City or Town	Uniondale
Entity Address, State or Province	NY
Entity Address, Postal Zip Code	11553
City Area Code	516
Local Phone Number	506-4200
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Filer Category	Large Accelerated Filer
Entity Small Business	false
Entity Emerging Growth Company	false
Entity Shell Company	false
Entity Common Stock, Shares Outstanding		143,006,659
Entity Central Index Key	0001253986
Current Fiscal Year End Date	--12-31
Document Fiscal Year Focus	2021
Document Fiscal Period Focus	Q3
Amendment Flag	false
Common Stock
Document Information [Line Items]
Title of 12(b) Security	Common Stock, par value $0.01 per share
Trading Symbol	ABR
Security Exchange Name	NYSE
Series D Preferred Stock
Document Information [Line Items]
Title of 12(b) Security	Preferred Stock, 6.375% Series D Cumulative Redeemable, par value $0.01 per share
Trading Symbol	ABR-PD
Security Exchange Name	NYSE
Series E Preferred Stock
Document Information [Line Items]
Title of 12(b) Security	Preferred Stock, 6.25% Series E Cumulative Redeemable, par value $0.01 per share
Trading Symbol	ABR-PE
Security Exchange Name	NYSE
Series F Preferred Stock
Document Information [Line Items]
Title of 12(b) Security	Preferred Stock, 6.25% Series F Fixed-to- Floating Rate Cumulative Redeemable, par value
Trading Symbol	ABR-PF
Security Exchange Name	NYSE

XML

CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands	Sep. 30, 2021	Dec. 31, 2020
Assets:
Cash and cash equivalents	$ 380,730	$ 339,528
Restricted cash	569,928	197,470
Loans and investments, net (allowance for credit losses: $131,534 and $148,329, respectively)	8,993,790	5,285,868
Loans held-for-sale, net	1,274,234	986,919
Capitalized mortgage servicing rights, net	417,283	379,974
Securities held-to-maturity, net (allowance for credit losses: $1,761 and $1,644, respectively)	112,735	95,524
Investments in equity affiliates	91,846	74,274
Due from related party	12,664	12,449
Goodwill and other intangible assets	101,933	105,451
Other assets	214,441	183,529
Total assets	12,169,584	7,660,986
Liabilities and Equity:
Credit and repurchase facilities	3,399,711	2,234,883
Collateralized loan obligations	4,715,804	2,517,309
Senior unsecured notes	1,102,578	662,843
Convertible senior unsecured notes, net	258,001	267,973
Junior subordinated notes to subsidiary trust issuing preferred securities	142,192	141,656
Due to related party	4,384	2,365
Due to borrowers	93,544	89,325
Allowance for loss-sharing obligations	62,828	64,303
Other liabilities	255,135	197,644
Total liabilities	10,034,177	6,178,301
Commitments and contingencies (Note 13)
Arbor Realty Trust, Inc. stockholders' equity:
Preferred stock, cumulative, redeemable, $0.01 par value: 100,000,000 shares authorized, shares issued and outstanding by period, respectively: Special voting preferred shares, 16,325,095 and 17,560,633 shares 8.25% Series A, 0 and 1,551,500 shares 7.75% Series B, 0 and 1,260,000 shares 8.50% Series C, 0 and 900,000 shares 6.375% Series D, 9,200,000 and 0 shares 6.25% Series E, 5,750,000 and 0 shares	361,635	89,472
Common stock, $0.01 par value: 500,000,000 shares authorized - 143,007,036 and 123,181,173 shares issued and outstanding, respectively	1,430	1,232
Additional paid-in capital	1,635,134	1,317,109
Retained earnings (accumulated deficit)	10,674	(63,442)
Total Arbor Realty Trust, Inc. stockholders' equity	2,008,873	1,344,371
Noncontrolling interest	126,534	138,314
Total equity	2,135,407	1,482,685
Total liabilities and equity	$ 12,169,584	$ 7,660,986

XML

CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) $ in Thousands	3 Months Ended	9 Months Ended	12 Months Ended
	Sep. 30, 2021	Sep. 30, 2021	Dec. 31, 2020
Loans and investments, net allowance for credit losses	$ 131,534	$ 131,534	$ 148,329
Securities held-to-maturity, net allowance for credit losses	$ 1,761	$ 1,761	$ 1,644
Preferred stock, par value (in dollars per share)	$ 0.01	$ 0.01	$ 0.01
Preferred stock, shares authorized (in shares)	100,000,000	100,000,000	100,000,000
Common stock, par value (in dollars per share)	$ 0.01	$ 0.01	$ 0.01
Common stock, shares authorized (in shares)	500,000,000	500,000,000	500,000,000
Common stock, shares issued (in shares)	143,007,036	143,007,036	123,181,173
Common stock, shares outstanding (in shares)	143,007,036	143,007,036	123,181,173
Assets	$ 12,169,584	$ 12,169,584	$ 7,660,986
Liabilities	10,034,177	10,034,177	6,178,301
Consolidated variable interest entities
Assets	5,706,553	5,706,553	3,134,447
Liabilities	$ 4,721,526	$ 4,721,526	$ 2,520,064
Special voting preferred shares
Preferred stock, shares issued (in shares)	16,325,095	16,325,095	17,560,633
Preferred stock, shares outstanding (in shares)	16,325,095	16,325,095	17,560,633
8.25% Series A preferred stock
Preferred stock, dividend rate (as a percent)		8.25%	8.25%
Preferred stock, shares issued (in shares)	0	0	1,551,500
Preferred stock, shares outstanding (in shares)	0	0	1,551,500
7.75% Series B preferred stock
Preferred stock, dividend rate (as a percent)		7.75%	7.75%
Preferred stock, shares issued (in shares)	0	0	1,260,000
Preferred stock, shares outstanding (in shares)	0	0	1,260,000
8.50% Series C preferred stock
Preferred stock, dividend rate (as a percent)		8.50%	8.50%
Preferred stock, shares issued (in shares)	0	0	900,000
Preferred stock, shares outstanding (in shares)	0	0	900,000
6.375% Series D preferred stock
Preferred stock, dividend rate (as a percent)		6.375%	6.375%
Preferred stock, shares issued (in shares)	9,200,000	9,200,000	0
Preferred stock, shares outstanding (in shares)	9,200,000	9,200,000	0
6.25% Series E preferred stock
Preferred stock, dividend rate (as a percent)	6.25%	6.25%	6.25%
Preferred stock, shares issued (in shares)	5,750,000	5,750,000	0
Preferred stock, shares outstanding (in shares)	5,750,000	5,750,000	0

XML

CONSOLIDATED STATEMENTS OF INCOME (Unaudited) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2021	Sep. 30, 2020	Sep. 30, 2021	Sep. 30, 2020
CONSOLIDATED STATEMENTS OF INCOME (Unaudited)
Interest income	$ 125,480	$ 81,701	$ 321,772	$ 253,307
Interest expense	55,560	37,888	144,122	129,172
Net interest income	69,920	43,813	177,650	124,135
Other revenue:
Gain on sales, including fee-based services, net	16,334	19,895	86,102	60,566
Mortgage servicing rights	32,453	42,357	95,688	96,708
Servicing revenue, net	20,088	13,348	50,939	40,156
Property operating income		1,033		3,976
Loss on derivative instruments, net	(1,492)	(753)	(7,320)	(58,852)
Other income, net	2,195	1,050	4,140	3,404
Total other revenue	69,578	76,930	229,549	145,958
Other expenses:
Employee compensation and benefits	41,973	32,962	128,647	101,652
Selling and administrative	11,757	9,356	33,707	29,013
Property operating expenses	149	1,300	421	4,778
Depreciation and amortization	1,807	1,922	5,349	5,830
Provision for loss sharing (net of recoveries)	(3,272)	(2,227)	(1,070)	21,706
Provision for credit losses (net of recoveries)	(3,799)	(7,586)	(12,689)	59,510
Total other expenses	48,615	35,727	154,365	222,489
Income before extinguishment of debt, sale of real estate, income from equity affiliates and income taxes	90,883	85,016	252,834	47,604
Loss on extinguishment of debt		(1,868)	(1,370)	(3,546)
(Loss) gain on sale of real estate		(1,868)	1,228	(1,868)
Income from equity affiliates	5,086	32,358	32,095	56,758
Provision for income taxes	(9,905)	(17,785)	(33,356)	(15,493)
Net income	86,064	97,721	251,431	83,455
Preferred stock dividends	4,913	1,888	13,216	5,665
Net income attributable to noncontrolling interest	8,347	13,836	26,806	11,012
Net income attributable to common stockholders	$ 72,804	$ 81,997	$ 211,409	$ 66,778
Basic earnings per common share	$ 0.51	$ 0.72	$ 1.57	$ 0.60
Diluted earnings per common share	$ 0.51	$ 0.72	$ 1.56	$ 0.59
Weighted average shares outstanding:
Basic	142,624,300	113,766,446	134,437,663	111,775,436
Diluted	160,270,905	133,997,087	152,691,461	132,401,315
Dividends declared per common share (in dollars per share)	$ 0.35	$ 0.31	$ 1.02	$ 0.91

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CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY (Unaudited) - USD ($) $ in Thousands	Preferred Stock 6.375% Series D preferred stock	Preferred Stock 6.25% Series E preferred stock	Preferred Stock Balance as adjusted for the adoption of ASU 2016-13	Preferred Stock	Common Stock 6.25% Series E preferred stock	Common Stock Balance as adjusted for the adoption of ASU 2016-13	Common Stock	Additional Paid-in Capital 6.25% Series E preferred stock	Additional Paid-in Capital Balance as adjusted for the adoption of ASU 2016-13	Additional Paid-in Capital	Retained Earnings (Accumulated Deficit) 6.25% Series E preferred stock	Retained Earnings (Accumulated Deficit) Cumulative-effect adjustment	Retained Earnings (Accumulated Deficit) Balance as adjusted for the adoption of ASU 2016-13	Retained Earnings (Accumulated Deficit)	Total Arbor Realty Trust, Inc. Stockholders' Equity 6.375% Series D preferred stock	Total Arbor Realty Trust, Inc. Stockholders' Equity 6.25% Series E preferred stock	Total Arbor Realty Trust, Inc. Stockholders' Equity Cumulative-effect adjustment	Total Arbor Realty Trust, Inc. Stockholders' Equity Balance as adjusted for the adoption of ASU 2016-13	Total Arbor Realty Trust, Inc. Stockholders' Equity	Noncontrolling Interest 6.25% Series E preferred stock	Noncontrolling Interest Cumulative-effect adjustment	Noncontrolling Interest Balance as adjusted for the adoption of ASU 2016-13	Noncontrolling Interest	6.375% Series D preferred stock	6.25% Series E preferred stock	Cumulative-effect adjustment	Balance as adjusted for the adoption of ASU 2016-13	Total
Balance at Dec. 31, 2019			$ 89,501	$ 89,501		$ 1,097	$ 1,097		$ 1,154,932	$ 1,154,932		$ (24,106)	$ (85,026)	$ (60,920)			$ (24,106)	$ 1,160,504	$ 1,184,610		$ (4,501)	$ 166,916	$ 171,417			$ (28,607)	$ 1,327,420	$ 1,356,027
Balance (in shares) at Dec. 31, 2019			24,195,594	24,195,594		109,706,214	109,706,214
Increase (Decrease) in Stockholders' Equity
Issuance of stock							$ 69			78,481									78,550									78,550
Issuance of stock (in shares)							6,887,274
Repurchase of common stock							$ (16)			(12,745)									(12,761)									(12,761)
Repurchase of common stock (in shares)							(1,625,777)
Issuance of common stock from convertible debt							$ 3			90									93									93
Issuance of common stock from convertible debt (in shares)							363,013
Stock-based compensation, net							$ 6			3,786									3,792									3,792
Stock-based compensation, net (in shares)							599,627
Distributions - common stock														(102,283)					(102,283)									(102,283)
Distributions - preferred stock														(5,673)					(5,673)									(5,673)
Distributions - noncontrolling interest																							(18,102)					(18,102)
Redemption of operating partnership units				$ (29)						(1,599)									(1,628)				(29,627)					(31,255)
Redemption of operating partnership units (in shares)				2,851,723
Net income														72,443					72,443				11,012					83,455
Balance at Sep. 30, 2020				$ 89,472			$ 1,159			1,222,945				(120,539)					1,193,037				130,199					1,323,236
Balance (in shares) at Sep. 30, 2020				21,343,871			115,930,351
Balance at Jun. 30, 2020				$ 89,500			$ 1,122			1,182,449				(167,165)					1,105,906				151,870					1,257,776
Balance (in shares) at Jun. 30, 2020				24,080,765			112,211,461
Increase (Decrease) in Stockholders' Equity
Issuance of stock							$ 36			40,506									40,542									40,542
Issuance of stock (in shares)							3,579,266
Stock-based compensation, net							$ 1			(10)									(9)									(9)
Stock-based compensation, net (in shares)							139,624
Distributions - common stock														(35,371)					(35,371)									(35,371)
Distributions - preferred stock														(1,888)					(1,888)									(1,888)
Distributions - noncontrolling interest																							(5,880)					(5,880)
Redemption of operating partnership units				$ (28)															(28)				(29,627)					(29,655)
Redemption of operating partnership units (in shares)				(2,736,894)
Net income														83,885					83,885				13,836					97,721
Balance at Sep. 30, 2020				$ 89,472			$ 1,159			1,222,945				(120,539)					1,193,037				130,199					1,323,236
Balance (in shares) at Sep. 30, 2020				21,343,871			115,930,351
Balance at Dec. 31, 2020				$ 89,472			$ 1,232			1,317,109				(63,442)					1,344,371				138,314					1,482,685
Balance (in shares) at Dec. 31, 2020				21,272,133			123,181,173
Increase (Decrease) in Stockholders' Equity
Issuance of stock	$ 222,463	$ 139,008					$ 202			342,416					$ 222,463	$ 139,008			342,618					$ 222,463	$ 139,008			342,618
Issuance of stock (in shares)	9,200,000	5,750,000					20,222,879
Repurchase of common stock							$ (14)			(23,446)									(23,460)									(23,460)
Repurchase of common stock (in shares)							(1,399,999)
Redemption of preferred stock				$ (89,296)										(3,492)					(92,788)									(92,788)
Redemption of preferred stock (in shares)				(3,711,500)
Issuance of common stock from convertible debt							$ 4			(4)
Issuance of common stock from convertible debt (in shares)							386,459
Stock-based compensation, net							$ 6			(941)									(935)									(935)
Stock-based compensation, net (in shares)							616,524
Distributions - common stock														(137,282)					(137,282)									(137,282)
Distributions - preferred stock														(9,735)					(9,735)									(9,735)
Distributions - noncontrolling interest																							(17,488)					(17,488)
Redemption of operating partnership units				$ (12)															(12)				(21,098)					(21,110)
Redemption of operating partnership units (in shares)				(1,235,538)
Net income														224,625					224,625				26,806					251,431
Balance at Sep. 30, 2021				$ 361,635			$ 1,430			1,635,134				10,674					2,008,873				126,534					2,135,407
Balance (in shares) at Sep. 30, 2021				31,275,095			143,007,036
Balance at Jun. 30, 2021				$ 222,627			$ 1,417			1,620,898				(12,084)					1,832,858				123,909					1,956,767
Balance (in shares) at Jun. 30, 2021				25,552,233			141,738,609
Increase (Decrease) in Stockholders' Equity
Issuance of stock		$ 139,008			$ 0		$ 8	$ 0		14,596	$ 0					$ 139,008			14,604	$ 0					$ 139,008			14,604
Issuance of stock (in shares)		5,750,000			0		800,000
Issuance of common stock from convertible debt							$ 4			(4)
Issuance of common stock from convertible debt (in shares)							386,459
Stock-based compensation, net							$ 1			(356)									(355)									(355)
Stock-based compensation, net (in shares)							81,968
Distributions - common stock														(50,043)					(50,043)									(50,043)
Distributions - preferred stock														(4,916)					(4,916)									(4,916)
Distributions - noncontrolling interest																							(5,722)					(5,722)
Redemption of operating partnership units (in shares)				(27,138)
Net income														77,717					77,717				8,347					86,064
Balance at Sep. 30, 2021				$ 361,635			$ 1,430			$ 1,635,134				$ 10,674					$ 2,008,873				$ 126,534					$ 2,135,407
Balance (in shares) at Sep. 30, 2021				31,275,095			143,007,036

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CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY (Unaudited) (Parenthetical)	9 Months Ended	12 Months Ended
	Sep. 30, 2021	Dec. 31, 2020
6.375% Series D preferred stock
Preferred stock, dividend rate (as a percent)	6.375%	6.375%
6.25% Series E preferred stock
Preferred stock, dividend rate (as a percent)	6.25%	6.25%

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CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) - USD ($) $ in Thousands	3 Months Ended	9 Months Ended
	Sep. 30, 2020	Sep. 30, 2021	Sep. 30, 2020
Operating activities:
Net income	$ 97,721	$ 251,431	$ 83,455
Adjustments to reconcile net income to net cash (used in) provided by operating activities:
Depreciation and amortization	1,922	5,349	5,830
Stock-based compensation		7,986	7,286
Amortization and accretion of interest and fees, net		119	3,172
Amortization of capitalized mortgage servicing rights	12,416	43,744	36,129
Originations of loans held-for-sale		(4,558,811)	(3,940,322)
Proceeds from sales of loans held-for-sale, net of gain on sale		4,330,959	4,169,411
Loss on sale of real estate	1,868	(1,228)	1,868
Mortgage servicing rights	(42,357)	(95,688)	(96,708)
Write-off of capitalized mortgage servicing rights from payoffs		18,344	12,610
Provision for loss sharing (net of recoveries)	(2,227)	(1,070)	21,706
Provision for credit losses (net of recoveries)	(7,586)	(12,689)	59,510
Net recoveries (charge-offs) for loss sharing obligations		(411)	399
Deferred tax provision (benefit)	3,900	10,692	(5,172)
Income from equity affiliates	(32,358)	(32,095)	(56,758)
Distributions from equity affiliates		25,450	16,333
Loss on extinguishment of debt	1,868	1,370	3,546
Payoffs and paydowns of loans held-for-sale		2,375	117
Changes in operating assets and liabilities		2,543	(18,711)
Net cash (used in) provided by operating activities		(402)	303,701
Investing Activities:
Loans and investments funded, originated and purchased, net		(5,174,313)	(1,425,051)
Payoffs and paydowns of loans and investments		1,345,559	674,929
Proceeds from sale of loans and investments		110,000	0
Deferred fees		41,475	10,338
Contributions to equity affiliates		(38,604)	(98)
Distributions from equity affiliates		27,675	0
Purchase of securities held-to-maturity, net		(23,747)	(37,927)
Payoffs and paydowns of securities held-to-maturity		9,760	8,914
Due to borrowers and reserves		(53,929)	(50,168)
Investments in real estate, net			(131)
Proceeds from sale of real estate, net			7,499
Net cash used in investing activities		(3,756,124)	(811,695)
Financing activities:
Proceeds from credit and repurchase facilities		10,494,663	7,565,743
Paydowns and payoffs of credit and repurchase facilities		(9,328,154)	(7,792,471)
Proceeds from issuance of collateralized loan obligations		2,567,387	668,000
Payoffs and paydowns of collateralized loan obligations		(356,150)	(282,874)
Payoffs and paydowns of debt fund		0	(70,000)
Proceeds from issuance of common stock		342,618	78,550
Proceeds from issuance of preferred stock		361,471	0
Settlements of convertible senior unsecured notes		(14,300)	(22,145)
Proceeds from issuance of senior unsecured notes		445,000	345,750
Redemption of preferred stock		(92,788)	0
Redemption of operating partnership units		(21,110)	(31,255)
Payments of withholding taxes on net settlement of vested stock		(8,921)	(3,494)
Repurchase of common stock		(23,460)	(12,761)
Distributions to stockholders		(161,404)	(126,058)
Payment of deferred financing costs		(34,666)	(17,086)
Net cash provided by financing activities		4,170,186	299,899
Net increase (decrease) in cash, cash equivalents and restricted cash		413,660	(208,095)
Cash, cash equivalents and restricted cash at beginning of period		536,998	510,562
Cash, cash equivalents and restricted cash at end of period	302,467	950,658	302,467
Reconciliation of cash, cash equivalents and restricted cash:
Cash and cash equivalents at beginning of period		339,528	299,687
Restricted cash at beginning of period		197,470	210,875
Cash, cash equivalents and restricted cash at beginning of period		536,998	510,562
Cash and cash equivalents at end of period	192,204	380,730	192,204
Restricted cash at end of period	110,263	569,928	110,263
Cash, cash equivalents and restricted cash at end of period	302,467	950,658	302,467
Supplemental cash flow information:
Cash used to pay interest		119,978	108,573
Cash used to pay taxes		37,436	22,810
Supplemental schedule of non-cash investing and financing activities:
Loans transferred from loans and investment, net to loans held-for-sale		65,204
Distributions accrued on preferred stock		$ 3,732	629
Cummulative-effect adjustment (for adoption of credit loss standard)			28,607
Settlements of convertible senior unsecured notes			4,778
Fair value of conversion feature of convertible senior unsecured notes	$ (185)		(185)
Issuance of common stock from convertible debt			$ 93

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Description of Business

9 Months Ended

Sep. 30, 2021

Description of Business

Description of Business

Note 1 — Description of Business

Arbor Realty Trust, Inc. (“we,” “us,” or “our”) is a Maryland corporation formed in 2003. We operate through two business segments: our Structured Loan Origination and Investment Business, or “Structured Business,” and our Agency Loan Origination and Servicing Business, or “Agency Business.”

Through our Structured Business, we invest in a diversified portfolio of structured finance assets in the multifamily, single-family rental (“SFR”) and commercial real estate markets, primarily consisting of bridge and mezzanine loans, including junior participating interests in first mortgages and preferred and direct equity. We also invest in real estate-related joint ventures and may directly acquire real property and invest in real estate-related notes and certain mortgage-related securities.

Through our Agency Business, we originate, sell and service a range of multifamily finance products through the Federal National Mortgage Association (“Fannie Mae”) and the Federal Home Loan Mortgage Corporation (“Freddie Mac,” and together with Fannie Mae, the government-sponsored enterprises, or “GSEs”), the Government National Mortgage Association (“Ginnie Mae”), Federal Housing Authority (“FHA”) and the U.S. Department of Housing and Urban Development (together with Ginnie Mae and FHA, “HUD”). We retain the servicing rights and asset management responsibilities on substantially all loans we originate and sell under the GSE and HUD programs. We are an approved Fannie Mae Delegated Underwriting and Servicing (“DUS”) lender nationally, a Freddie Mac Multifamily Conventional Loan lender, seller/servicer, in New York, New Jersey and Connecticut, a Freddie Mac affordable, manufactured housing, senior housing and small balance loan (“SBL”) lender, seller/servicer, nationally and a HUD MAP and LEAN senior housing/healthcare lender nationally. We also originate and service permanent financing loans underwritten using the guidelines of our existing agency loans sold to the GSEs, which we refer to as “Private Label” loans, and originate and sell finance products through conduit/commercial mortgage-backed securities (“CMBS”) programs. We pool and securitize the Private Label loans and sell certificates in the securitizations to third-party investors, while retaining the servicing rights and the highest risk bottom tranche certificate of the securitization (“APL certificates”).

Substantially all of our operations are conducted through our operating partnership, Arbor Realty Limited Partnership (“ARLP”), for which we serve as the indirect general partner, and ARLP's subsidiaries. We are organized to qualify as a real estate investment trust (“REIT”) for U.S. federal income tax purposes. A REIT is generally not subject to federal income tax on that portion of its REIT-taxable income that is distributed to its stockholders, provided that at least 90% of taxable income is distributed and provided that certain other requirements are met. Certain of our assets that produce non-qualifying REIT income, primarily within the Agency Business, are operated through taxable REIT subsidiaries (“TRS”), which are part of our TRS consolidated group (the “TRS Consolidated Group”) and are subject to U.S. federal, state and local income taxes. In general, our TRS entities may hold assets that the REIT cannot hold directly and may engage in real estate or non-real estate-related business.

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Basis of Presentation and Significant Accounting Policies

9 Months Ended

Sep. 30, 2021

Basis of Presentation and Significant Accounting Policies

Basis of Presentation and Significant Accounting Policies

Note 2 — Basis of Presentation and Significant Accounting Policies

Basis of Presentation

These consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States (“GAAP”), for interim financial statements and the instructions to Form 10-Q. Accordingly, certain information and footnote disclosures normally included in the consolidated financial statements prepared under GAAP have been condensed or omitted. In our opinion, all adjustments considered necessary for a fair presentation of our financial position, results of operations and cash flows have been included and are of a normal and recurring nature. The operating results presented for interim periods are not necessarily indicative of the results that may be expected for any other interim period or for the entire year. These financial statements should be read in conjunction with our financial statements and notes thereto included in our 2020 Annual Report.

Principles of Consolidation

These consolidated financial statements include our financial statements and the financial statements of our wholly owned subsidiaries, partnerships and other joint ventures in which we own a controlling interest, including variable interest entities (“VIEs”) of which we are the primary beneficiary. Entities in which we have a significant influence are accounted for under the equity method. Our VIEs are described in Note 14. All significant intercompany transactions and balances have been eliminated in consolidation.

Use of Estimates

The preparation of consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that could materially affect the amounts reported in the consolidated financial statements and accompanying notes. Actual results could differ from those estimates. Beginning early 2020, there has been a global outbreak of COVID-19, which had forced many countries, including the United States, to declare national emergencies, to institute “stay-at-home” orders, to close financial markets and to restrict operations of non-essential businesses. Such actions have created significant disruptions in global supply chains, and adversely impacted many industries. COVID-19 could have a continued and prolonged adverse impact on economic and market conditions, which could continue a period of global economic slowdown. The impact of COVID-19 on companies continues to evolve, and the extent and duration of the economic fallout from this pandemic, both globally and to our business, remain unclear, making any estimate or assumption as of September 30, 2021 inherently less certain than they would be absent the current and potential impacts of COVID-19.

Reclassification

Certain amounts in the prior period financial statements have been reclassified to conform to the presentation of the current period financial statements. Our real estate owned assets previously recorded to real estate owned, net on our consolidated balance sheets are now recorded to other assets for all periods presented.

Recently Adopted Accounting Pronouncements

Description	Adoption Date	Effect on Financial Statements
In December 2019, the Financial Accounting Standards Board (“FASB”) issued Accounting Standard Update (“ASU”) 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes, which removes certain exceptions to the general principles in Topic 740 and also clarifies and amends existing guidance to improve consistent application.	First quarter of 2021	The adoption of this guidance did not have a material impact on our consolidated financial statements.

Recently Issued Accounting Pronouncements

Description	Effective Date	Effect on Financial Statements
In August 2020, the FASB issued ASU 2020-06, Debt—Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging—Contracts in Entity’s Own Equity (Subtopic 815-40): Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity. This guidance reduces the number of accounting models for convertible debt instruments. Upon adoption of this guidance, convertible debt proceeds will no longer be allocated between debt and equity components, reducing the unamortized debt discount and lowering interest expense. This guidance also changes the method used to calculate diluted earnings per share when an instrument may be settled in cash or shares, if the effect is dilutive.	First quarter of 2022 with early adoption permitted beginning in the first quarter of 2021	We continue to evaluate the impact the adoption of this guidance will have on our consolidated financial statements and related disclosures. We expect to adopt this guidance on January 1, 2022. Upon adoption, we will reclassify the remaining equity component from equity to our convertible senior unsecured notes liability and cease the amortization of the debt discount through interest expense. The adoption of this guidance will also require us to change the method which we use to calculate diluted earnings per share to the if-converted method, potentially requiring us to add back interest expense to the numerator and make certain adjustments to the denominator.

Significant Accounting Policies

See Item 8 – Financial Statements and Supplementary Data in our 2020 Annual Report for a description of our significant accounting policies. There have been no significant changes to our significant accounting policies since December 31, 2020.

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Loans and Investments

9 Months Ended

Sep. 30, 2021

Loans and Investments

Loans and Investments

Note 3 — Loans and Investments

Our Structured Business loan and investment portfolio consists of ($ in thousands):

								Wtd. Avg.
								Remaining	Wtd. Avg.		Wtd. Avg.
			Percent of		Loan	Wtd. Avg.		Months to	First Dollar		Last Dollar
	September 30, 2021		Total		Count	Pay Rate (1)		Maturity	LTV Ratio (2)		LTV Ratio (3)
Bridge loans (4)	$	8,696,486	95	%	423	4.45	%	20.7	0	%	76	%
Mezzanine loans		256,413	3	%	38	6.83	%	53.5	30	%	82	%
Preferred equity investments		186,705	2	%	13	6.62	%	35.2	59	%	89	%
Other loans (5)		29,403	<1	%	2	4.63	%	51.1	0	%	69	%
		9,169,007	100	%	476	4.56	%	22.0	2	%	76	%
Allowance for credit losses		(131,534)
Unearned revenue		(43,683)
Loans and investments, net	$	8,993,790

	December 31, 2020
Bridge loans (4)	$	5,022,509	92	%	263	5.09	%	16.2	0	%	76	%
Mezzanine loans		159,242	3	%	29	7.40	%	45.0	32	%	82	%
Preferred equity investments		224,928	4	%	14	7.07	%	49.8	64	%	89	%
Other loans (5)		68,403	1	%	22	4.95	%	74.8	0	%	69	%
		5,475,082	100	%	328	5.23	%	19.2	4	%	77	%
Allowance for credit losses		(148,329)
Unearned revenue		(40,885)
Loans and investments, net	$	5,285,868

(1) “Weighted Average Pay Rate” is a weighted average, based on the unpaid principal balance (“UPB”) of each loan in our portfolio, of the interest rate required to be paid monthly as stated in the individual loan agreements. Certain loans and investments that require an additional rate of interest “accrual rate” to be paid at maturity are not included in the weighted average pay rate as shown in the table.

(2) The “First Dollar Loan-to-Value (“LTV”) Ratio” is calculated by comparing the total of our senior most dollar and all senior lien positions within the capital stack to the fair value of the underlying collateral to determine the point at which we will absorb a total loss of our position.

(3) The “Last Dollar LTV Ratio” is calculated by comparing the total of the carrying value of our loan and all senior lien positions within the capital stack to the fair value of the underlying collateral to determine the point at which we will initially absorb a loss.

(4) As of September 30, 2021 and December 31, 2020, bridge loans included 86 and 38, respectively, SFR loans with an aggregate UPB of $614.3 million and $309.2 million, respectively, of which $277.3 million and $88.1 million, respectively, was funded.

(5) As of September 30, 2021, other loans included 2 variable rate SFR permanent loans and as of December 31, 2020, other loans included 22 SFR permanent loans.

During the first quarter of 2021, the Structured Business transferred 21 fixed rate SFR permanent loans with a UPB of $65.2 million to the Agency Business, which represented all fixed rate SFR permanent loans originated prior to such transfer. Fixed rate SFR permanent loans are reported through the Agency Business beginning in 2021 and classified as held-for-sale. See Note 4 for further details.

Concentration of Credit Risk

We are subject to concentration risk in that, at September 30, 2021, the UPB related to 32 loans with five different borrowers represented 11% of total assets. At December 31, 2020, the UPB related to 22 loans with five different borrowers represented 12% of total assets. During both the nine months ended September 30, 2021 and the year ended December 31, 2020, no single loan or investment represented more than 10% of our total assets and no single investor group generated over 10% of our revenue. See Note 17 for details on our concentration of related party loans and investments.

We assign a credit risk rating of pass, pass/watch, special mention, substandard or doubtful to each loan and investment, with a pass rating being the lowest risk and a doubtful rating being the highest risk. Each credit risk rating has benchmark guidelines that pertain to debt-service coverage ratios, LTV ratios, borrower strength, asset quality, and funded cash reserves. Other factors such as guarantees, market strength, and remaining loan term and borrower equity are also reviewed and factored into determining the credit risk rating assigned to each loan. This metric provides a helpful snapshot of portfolio quality and credit risk. All portfolio assets are subject to, at a minimum, a thorough quarterly financial evaluation in which historical operating performance and forward-looking projections are reviewed, however, we maintain a higher level of scrutiny and focus on loans that we consider “high risk” and that possess deteriorating credit quality.

Generally speaking, given our typical loan profile, risk ratings of pass, pass/watch and special mention suggest that we expect the loan to make both principal and interest payments according to the contractual terms of the loan agreement. A risk rating of substandard indicates we anticipate the loan may require a modification of some kind. A risk rating of doubtful indicates we expect the loan to underperform over its term, and there could be loss of interest and/or principal. Further, while the above are the primary guidelines used in determining a certain risk rating, subjective items such as borrower strength, market strength or asset quality may result in a rating that is higher or lower than might be indicated by any risk rating matrix.

A summary of the loan portfolio’s internal risk ratings and LTV ratios by asset class as of September 30, 2021 is as follows ($ in thousands):

																Wtd. Avg.		Wtd. Avg.
	UPB by Origination Year															First Dollar		Last Dollar
Asset Class / Risk Rating	2021		2020		2019		2018		2017		Prior		Total			LTV Ratio		LTV Ratio
Multifamily:
Pass	$	3,167,965	$	350,623	$	185,265	$	—	$	20,300	$	276	$	3,724,429
Pass/Watch		1,458,271		1,077,411		256,877		127,255		32,500		28,800		2,981,114
Special Mention		180,723		415,519		617,506		63,233		—		350		1,277,331
Substandard		—		14,340		89,330		11,400		31,117		8,250		154,437
Doubtful		—		—		—		—		17,700		—		17,700
Total Multifamily	$	4,806,959	$	1,857,893	$	1,148,978	$	201,888	$	101,617	$	37,676	$	8,155,011		2	%	76	%
Single-Family Rental:												Percentage of portfolio		89	%
Pass	$	30,777	$	3,165	$	44,181	$	—	$	—	$	—	$	78,123
Pass/Watch		169,677		26,813		—		—		—		—		196,490
Special Mention		3,340		28,722		—		—		—		—		32,062
Total Single-Family Rental	$	203,794	$	58,700	$	44,181	$	—	$	—	$	—	$	306,675		0	%	63	%
Land:												Percentage of portfolio		3	%
Special Mention	$	—	$	8,100	$	—	$	—	$	—	$	—	$	8,100
Substandard		—		71,018		19,524		—		19,975		127,928		238,445
Total Land	$	—	$	79,118	$	19,524	$	—	$	19,975	$	127,928	$	246,545		0	%	95	%
Healthcare:												Percentage of portfolio		3	%
Pass/Watch	$	—	$	—	$	—	$	26,850	$	—	$	—	$	26,850
Special Mention		—		—		65,819		14,650		39,650		—		120,119
Total Healthcare	$	—	$	—	$	65,819	$	41,500	$	39,650	$	—	$	146,969		0	%	79	%
Office:												Percentage of portfolio		2	%
Special Mention	$	—	$	35,410	$	—	$	42,799	$	43,151	$	2,096	$	123,456
Doubtful		—		—		—		—		—		880		880
Total Office	$	—	$	35,410	$	—	$	42,799	$	43,151	$	2,976	$	124,336		0	%	83	%
Student Housing:												Percentage of portfolio		1	%
Pass	$	25,700	$	—	$	—	$	—	$	—	$	—	$	25,700
Special Mention		—		—		31,100		—		—		—		31,100
Substandard		—		23,500		—		13,000		—		—		36,500
Total Student Housing	$	25,700	$	23,500	$	31,100	$	13,000	$	—	$	—	$	93,300		19	%	71	%
Hotel:												Percentage of portfolio		1	%
Pass/Watch	$	—	$	5,846	$	—	$	—	$	—	$	—	$	5,846
Special Mention		—		—		41,000		—		—		—		41,000
Total Hotel	$	—	$	5,846	$	41,000	$	—	$	—	$	—	$	46,846		0	%	75	%
Retail:												Percentage of portfolio		1	%
Pass	$	—	$	—	$	4,000	$	—	$	—	$	—	$	4,000
Special Mention		—		—		—		26,600		—		—		26,600
Substandard		—		—		—		—		—		3,445		3,445
Total Retail	$	—	$	—	$	4,000	$	26,600	$	—	$	3,445	$	34,045		9	%	72	%
Other:												Percentage of portfolio		< 1	%
Pass/Watch	$	—	$	—	$	—	$	—	$	13,580	$	—	$	13,580
Doubtful		—		—		—		—		—		1,700		1,700
Total Other	$	—	$	—	$	—	$	—	$	13,580	$	1,700	$	15,280		7	%	51	%
												Percentage of portfolio		< 1	%
Grand Total	$	5,036,453	$	2,060,467	$	1,354,602	$	325,787	$	217,973	$	173,725	$	9,169,007		2	%	76	%

Geographic Concentration Risk

As of September 30, 2021, 18% and 15% of the outstanding balance of our loan and investment portfolio had underlying properties in Texas and New York, respectively. As of December 31, 2020, 19% and 11% of the outstanding balance of our loan and investment portfolio had underlying properties in New York and Texas, respectively. No other states represented 10% or more of the total loan and investment portfolio.

Allowance for Credit Losses

A summary of the changes in the allowance for credit losses is as follows (in thousands):

	Three Months Ended September 30, 2021
	Land		Multifamily		Retail		Office		Student Housing		Hotel		Healthcare		Other		Total
Allowance for credit losses:
Beginning balance	$	78,057	$	30,160	$	13,819	$	7,822	$	2,365	$	225	$	3,866	$	2,133	$	138,447
Provision for credit losses (net of recoveries)		(45)		(2,093)		—		(95)		(542)		(209)		(3,851)		(78)		(6,913)
Ending balance	$	78,012	$	28,067	$	13,819	$	7,727	$	1,823	$	16	$	15	$	2,055	$	131,534

	Three Months Ended September 30, 2020
Allowance for credit losses:
Beginning balance	$	78,094	$	34,606	$	13,981	$	8,532	$	4,110	$	7,672	$	3,930	$	1,886	$	152,811
Provision for credit losses (net of recoveries)		(84)		103		(40)		(6,589)		675		(133)		(21)		23		(6,066)
Ending balance	$	78,010	$	34,709	$	13,941	$	1,943	$	4,785	$	7,539	$	3,909	$	1,909	$	146,745

	Nine Months Ended September 30, 2021
Allowance for credit losses:
Beginning balance	$	78,150	$	36,468	$	13,861	$	1,846	$	4,078	$	7,759	$	3,880	$	2,287	$	148,329
Provision for credit losses (net of recoveries)		(138)		(8,401)		(42)		5,881		(2,255)		(7,743)		(3,865)		(232)		(16,795)
Ending balance	$	78,012	$	28,067	$	13,819	$	7,727	$	1,823	$	16	$	15	$	2,055	$	131,534

	Nine Months Ended September 30, 2020
Allowance for credit losses:
Beginning balance, prior to adoption of CECL	$	67,869	$	—	$	—	$	1,500	$	—	$	—	$	—	$	1,700	$	71,069
Impact of adopting CECL - January 1, 2020		77		16,322		335		287		68		29		64		112		17,294
Provision for credit losses (net of recoveries)		10,064		18,387		13,606		156		4,717		7,510		3,845		97		58,382
Ending balance	$	78,010	$	34,709	$	13,941	$	1,943	$	4,785	$	7,539	$	3,909	$	1,909	$	146,745

Our estimate of allowance for credit losses on our structured loans and investments, including related unfunded loan commitments, was based on a reasonable and supportable forecast period that was adjusted for the expectations that the markets we operate in will experience moderate improvements in economic conditions, decreases in unemployment rates, continued low interest rates and other market factors including positive developments in the COVID-19 pandemic.

The expected credit losses over the contractual period of our loans also include the obligation to extend credit through our unfunded loan commitments. Our current expected credit loss (“CECL”) allowance for unfunded loan commitments are adjusted quarterly and correspond with the associated outstanding loans. As of September 30, 2021 and December 31, 2020, we had outstanding unfunded commitments of $638.1 million and $353.8 million, respectively, that we are obligated to fund as borrowers meet certain requirements.

As of September 30, 2021 and December 31, 2020, accrued interest receivable related to our loans totaling $59.7 million and $41.6 million, respectively, was excluded from the estimate of credit losses and is included in other assets on the consolidated balance sheets.

All of our structured loans and investments are secured by real estate assets or by interests in real estate assets, and, as such, the measurement of credit losses may be based on the difference between the fair value of the underlying collateral and the carrying value of the assets as of the period end. A summary of our specific loans considered impaired by asset class is as follows (in thousands):

	September 30, 2021
							Wtd. Avg. First		Wtd. Avg. Last
			Carrying		Allowance for		Dollar LTV		Dollar LTV
Asset Class	UPB (1)		Value		Credit Losses		Ratio		Ratio
Land	$	134,215	$	127,868	$	77,868	0	%	99	%
Retail		30,045		29,348		13,818	10	%	77	%
Office		2,096		2,096		1,500	0	%	64	%
Commercial		1,700		1,700		1,700	63	%	63	%
Total	$	168,056	$	161,012	$	94,886	2	%	94	%

	December 31, 2020
Land	$	134,215	$	127,829	$	77,869	0	%	99	%
Hotel		110,000		89,613		7,500	0	%	94	%
Retail		30,079		28,957		13,851	10	%	75	%
Healthcare		4,625		4,673		3,845	0	%	83	%
Office		2,166		2,166		1,500	0	%	71	%
Commercial		1,700		1,700		1,700	63	%	63	%
Total	$	282,785	$	254,938	$	106,265	1	%	94	%

(1) Represents the UPB of eight and ten impaired loans (less unearned revenue and other holdbacks and adjustments) by asset class at September 30, 2021 and December 31, 2020, respectively.

There were no loans for which the fair value of the collateral securing the loan was less than the carrying value of the loan for which we had not recorded a provision for credit loss as of September 30, 2021 and December 31, 2020.

At September 30, 2021, six loans with an aggregate net carrying value of $53.0 million, net of related loan loss reserves of $2.6 million, were classified as non-performing and, at December 31, 2020, seven loans with an aggregate net carrying value of $53.8 million, net of related loan loss reserves of $6.5 million, were classified as non-performing. Income from non-performing loans is generally recognized on a cash basis when it is received. Full income recognition will resume when the loan becomes contractually current and performance has recommenced.

A summary of our non-performing loans by asset class is as follows (in thousands):

	September 30, 2021						December 31, 2020
			Less Than		Greater Than				Less Than		Greater Than
			90 Days		90 Days				90 Days		90 Days
	UPB		Past Due		Past Due		UPB		Past Due		Past Due
Student Housing	$	36,500	$	—	$	36,500	$	36,500	$	—	$	36,500
Multifamily		17,700		—		17,700		17,700		—		17,700
Commercial		1,700		—		1,700		1,700		—		1,700
Retail		920		—		920		920		—		920
Office		880		—		880		880		—		880
Healthcare		—		—		—		4,625		—		4,625
Total	$	57,700	$	—	$	57,700	$	62,325	$	—	$	62,325

In addition, we have six loans with a carrying value totaling $121.4 million at September 30, 2021, that are collateralized by a land development project. The loans do not carry a current pay rate of interest, however, five of the loans with a carrying value totaling $112.0 million entitle us to a weighted average accrual rate of interest of 7.91%. In 2008, we suspended the recording of the accrual rate of interest on these loans, as they were impaired and we deemed the collection of this interest to be doubtful. At both September 30, 2021 and December 31, 2020, we had a cumulative allowance for credit losses of $71.4 million related to these loans. The loans are subject to certain risks associated with a development project including, but not limited to, availability of construction financing, increases in projected construction costs, demand for the development's outputs upon completion of the project, and litigation risk. Additionally, these loans were not classified as non-performing as the borrower is in compliance with all of the terms and conditions of the loans.

At both September 30, 2021 and December 31, 2020, we had no loans contractually past due 90 days or more that are still accruing interest. During both the three and nine months ended September 30, 2021 and 2020, interest income recognized on nonaccrual loans was de minimis.

In August 2020, we entered into a loan modification agreement on a $26.5 million bridge loan with an interest rate of LIBOR plus 6.00% with a 2.375% LIBOR floor and a $6.1 million mezzanine loan with a fixed rate of 12% collateralized by a retail property to: (1) reduce the interest rate on both loans to the greater of: (i) LIBOR plus 5.50% and (ii) 6.50%, and (2) to extend the maturity three years to December 2024. A portion of the foregoing interest equal to 2.00% will be deferred to payoff and will be waived if the loan is paid off by December 31, 2022. The loan modification agreement also includes a $6.0 million required principal paydown, which occurred at the closing of the modification transaction, and an $8.0 million principal reduction once the borrower deposits an additional reserve deposit of approximately $4.6 million by December 31, 2021.

In 2019, we purchased $50.0 million of a $110.0 million bridge loan, which was collateralized by a hotel property and scheduled to mature in December 2022. In the first quarter of 2020, we recorded a $7.5 million allowance for credit losses due to a reduction in the appraised value of the property. In August 2020, we purchased the remaining $60.0 million bridge loan at a discount for $39.9 million, which we determined had experienced a more than insignificant deterioration in credit quality since origination and, therefore, deemed to be a purchased loan with credit deterioration. The $20.1 million discount was classified as a noncredit discount and no portion of the discount was allocated to allowance for credit losses at the date of purchase since the appraised value of the property was greater than the purchase price. Shortly after the purchase, we entered into a forbearance agreement with the borrower to temporarily reduce the interest rate from LIBOR plus 3.00% with a 1.50% LIBOR floor to a pay rate of 1.00% and to include a $10.0 million principal reduction if the loan is paid off by March 2, 2021. In January 2021, we entered into a second forbearance agreement which temporarily eliminated the pay rate, extended the principal reduction payoff deadline to June 30, 2021 and increased the interest rate to an unaccrued default rate of 9.50%, which was deferred to payoff. In June 2021, we received $95.0 million for full satisfaction of these loans, reversed the $7.5 million allowance for credit losses and recorded interest income of $3.5 million.

These two loan modifications were deemed troubled debt restructurings. There were no other loan modifications, refinancing's and/or extensions during the nine months ended September 30, 2021 and 2020 that were considered troubled debt restructurings.

Given the transitional nature of some of our real estate loans, we may require funds to be placed into an interest reserve, based on contractual requirements, to cover debt service costs. At September 30, 2021 and December 31, 2020, we had total interest reserves of $89.2 million and $78.3 million, respectively, on 297 loans and 186 loans, respectively, with an aggregate UPB of $5.27 billion and $3.60 billion, respectively.

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Loans Held-for-Sale, Net

9 Months Ended

Sep. 30, 2021

Loans Held-for-Sale, Net

Loans Held-for-Sale, Net

Note 4 — Loans Held-for-Sale, Net

Our GSE loans held-for-sale are typically sold within 60 days of loan origination, while our Private Label loans are generally expected to be sold and securitized within 180 days of loan origination. Loans held-for-sale, net consists of the following (in thousands):

	September 30, 2021		December 31, 2020
Private Label	$	761,098	$	56,186
Fannie Mae		279,981		679,342
Freddie Mac		108,589		180,004
FHA		70,113		53,063
SFR - Fixed Rate		39,506		—
		1,259,287		968,595
Fair value of future MSR		19,151		21,600
Unearned discount		(4,204)		(3,276)
Loans held-for-sale, net	$	1,274,234	$	986,919

During the three and nine months ended September 30, 2021, we sold $1.01 billion and $4.33 billion, respectively, of loans held-for-sale and recorded gain on sales, including fees, of $16.3 million and $86.1 million, respectively. During the three and nine months ended September 30, 2020, we sold $1.22 billion and $4.17 billion, respectively, of loans held-for-sale and recorded gain on sales, including fees, of $19.9 million and $60.6 million, respectively.

Included in the total loans sold during 2021 and 2020 were Private Label loans totaling $449.9 million and $727.2 million, respectively, which were sold to unconsolidated affiliates of ours who pooled and securitized the loans. We retained the most subordinate class of certificates in the 2021 and 2020 securitizations totaling $38.2 million and $63.6 million, respectively, in satisfaction of credit risk retention requirements (see Note 7 for details), and we are also the primary servicer of the mortgage loans. In addition, the total loans sold during 2021 included 23 fixed rate SFR permanent loans totaling $75.3 million which resulted in a gain on sale of $2.8 million.

At September 30, 2021 and December 31, 2020, there were no loans held-for-sale that were 90 days or more past due, and there were no loans held-for-sale that were placed on a non-accrual status.

Subsequent Event. In October 2021, we closed a Private Label securitization totaling $535.0 million, of which we retained the most subordinate class of certificates totaling $47.5 million.

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Capitalized Mortgage Servicing Rights

9 Months Ended

Sep. 30, 2021

Capitalized Mortgage Servicing Rights

Capitalized Mortgage Servicing Rights

Note 5 — Capitalized Mortgage Servicing Rights

Our capitalized mortgage servicing rights (“MSRs”) reflect commercial real estate MSRs derived from loans sold in our Agency Business or acquired MSRs. The discount rates used to determine the present value of our MSRs throughout the periods presented for all MSRs were between 8% - 13% (representing a weighted average discount rate of 12%) based on our best estimate of market discount rates. The weighted average estimated life remaining of our MSRs was 8.5 years and 8.6 years at September 30, 2021 and December 31, 2020, respectively.

A summary of our capitalized MSR activity is as follows (in thousands):

	Three Months Ended September 30, 2021						Nine Months Ended September 30, 2021
	Originated		Acquired		Total		Originated		Acquired		Total
Beginning balance	$	383,063	$	35,590	$	418,653	$	336,466	$	43,508	$	379,974
Additions		22,387		—		22,387		99,397		—		99,397
Amortization		(12,345)		(2,527)		(14,872)		(35,221)		(8,523)		(43,744)
Write-downs and payoffs		(7,420)		(1,465)		(8,885)		(14,957)		(3,387)		(18,344)
Ending balance	$	385,685	$	31,598	$	417,283	$	385,685	$	31,598	$	417,283

	Three Months Ended September 30, 2020						Nine Months Ended September 30, 2020
Beginning balance	$	260,452	$	52,836	$	313,288	$	221,901	$	64,519	$	286,420
Additions		37,403		—		37,403		97,554		—		97,554
Amortization		(8,811)		(3,605)		(12,416)		(24,425)		(11,704)		(36,129)
Write-downs and payoffs		(2,081)		(959)		(3,040)		(8,067)		(4,543)		(12,610)
Ending balance	$	286,963	$	48,272	$	335,235	$	286,963	$	48,272	$	335,235

We collected prepayment fees totaling $11.2 million and $18.1 million during the three and nine months ended September 30, 2021, respectively, and $2.0 million and $10.1 million during the three and nine months ended September 30, 2020, respectively. Prepayment fees are included as a component of servicing revenue, net on the consolidated statements of income. As of September 30, 2021 and December 31, 2020, we had no valuation allowance recorded on any of our MSRs.

The expected amortization of capitalized MSRs recorded as of September 30, 2021 is as follows (in thousands):

Year	Amortization
2021 (three months ending 12/31/2021)	$	14,991
2022		57,963
2023		54,522
2024		51,072
2025		48,251
2026		44,235
Thereafter		146,249
Total	$	417,283

Actual amortization may vary from these estimates.

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Mortgage Servicing

9 Months Ended

Sep. 30, 2021

Mortgage Servicing

Mortgage Servicing

Note 6 — Mortgage Servicing

Product and geographic concentrations that impact our servicing revenue are as follows ($ in thousands):

September 30, 2021
Product Concentrations					Geographic Concentrations
						UPB
			Percent of			Percentage
Product	UPB (1)		Total		State	of Total
Fannie Mae	$	19,271,527	74	%	Texas	14	%
Freddie Mac		4,726,587	18	%	New York	10	%
Private Label		1,176,391	4	%	North Carolina	9	%
FHA		933,519	4	%	California	9	%
SFR - Fixed Rate		104,094	<1	%	Georgia	6	%
Total	$	26,212,118	100	%	Florida	6	%
					New Jersey	5	%
					Other (2)	41	%
					Total	100	%

December 31, 2020
Fannie Mae	$	18,268,268	74	%	Texas	16	%
Freddie Mac		4,881,080	20	%	New York	9	%
FHA		752,116	3	%	North Carolina	9	%
Private Label		726,992	3	%	California	9	%
Total	$	24,628,456	100	%	Florida	7	%
					Georgia	6	%
					New Jersey	4	%
					Other (2)	40	%
					Total	100	%

(1) Excludes loans which we are not collecting a servicing fee.

(2) No other individual state represented 4% or more of the total.

At September 30, 2021 and December 31, 2020, our weighted average servicing fee was 45.7 basis points and 45.4 basis points, respectively. At September 30, 2021 and December 31, 2020, we held total escrow balances of $1.78 billion and $1.29 billion, respectively, which is not reflected in our consolidated balance sheets. Of the total escrow balances, we held $767.2 million and $867.6 million at September 30, 2021 and December 31, 2020, respectively, related to loans we are servicing within our Agency Business. These escrows are maintained in separate accounts at several federally insured depository institutions, which may exceed FDIC insured limits. We earn interest income on the total escrow deposits, generally based on a market rate of interest negotiated with the financial institutions that hold the escrow deposits. Interest earned on total escrows, net of interest paid to the borrower, was $1.0 million and $3.2 million during the three and nine months ended September 30, 2021, respectively, and $1.3 million and $5.8 million during the three and nine months ended September 30, 2020, respectively, and is a component of servicing revenue, net in the consolidated statements of income.

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Securities Held-to-Maturity

9 Months Ended

Sep. 30, 2021

Securities Held-to-Maturity

Securities Held-to-Maturity

Note 7 — Securities Held-to-Maturity

Agency Private Label Certificates (“APL certificates”). In connection with our Private Label securitizations, we retain the most subordinate class of the APL certificates in satisfaction of credit risk retention requirements. As of September 30, 2021, we retained APL certificates with an initial face value of $101.9 million, which were purchased at a discount for $61.7 million. These certificates are collateralized by 10-year fixed rate first mortgage loans on multifamily properties, bear interest at an initial weighted average variable rate of 4.51% and have an estimated weighted average remaining maturity of 8.6 years. The weighted average effective interest rate was 9.65% and 10.15% at September 30, 2021 and December 31, 2020, respectively, and the full $101.9 million is expected to mature after five years through ten years.

Agency B Piece Bonds. Freddie Mac may choose to hold, sell or securitize loans we sell to them under the Freddie Mac SBL program. As part of the securitizations under the SBL program, we have the ability to purchase the B Piece bond through a bidding process, which represents the bottom 10%, or highest risk, of the securitization. As of September 30, 2021, we retained 49%, or $106.2 million initial face value, of seven B Piece bonds, which were purchased at a discount for $74.7 million, and sold the remaining 51% to a third-party at par. These securities are collateralized by a pool of multifamily mortgage loans, bear interest at an initial weighted average variable rate of 3.74% and have an estimated weighted average remaining maturity of 5.8 years. The weighted average effective interest rate was 11.17% and 10.85% at September 30, 2021 and December 31, 2020, respectively, including the accretion of a portion of the discount deemed collectible. Approximately $11.3 million is estimated to mature within one year, $30.1 million is estimated to mature after one year through five years, $8.2 million is estimated to mature after five years through ten years and $15.5 million is estimated to mature after ten years.

A summary of our securities held-to-maturity is as follows (in thousands):

			Net Carrying		Unrealized		Estimated		Allowance for
	Face Value		Value		Gain/(Loss)		Fair Value		Credit Losses
September 30, 2021
APL certificates	$	101,868	$	62,412	$	5,575	$	67,987	$	1,315
B Piece bonds		65,137		50,323		3,821		54,144		446
Total	$	167,005	$	112,735	$	9,396	$	122,131	$	1,761
December 31, 2020
APL certificates	$	63,627	$	37,685	$	(2,105)	$	35,580	$	1,023
B Piece bonds		76,497		57,839		709		58,548		621
Total	$	140,124	$	95,524	$	(1,396)	$	94,128	$	1,644

A summary of the changes in the allowance for credit losses for our securities held-to-maturity is as follows (in thousands):

	Three Months Ended September 30, 2021
	APL		B Piece
	Certificates		Bonds		Total
Beginning balance	$	1,568	$	547	$	2,115
Provision for credit loss expense/(reversal)		(253)		(101)		(354)
Ending balance	$	1,315	$	446	$	1,761

	Nine Months Ended September 30, 2021
Beginning balance	$	1,023	$	621	$	1,644
Provision for credit loss expense/(reversal)		292		(175)		117
Ending balance	$	1,315	$	446	$	1,761

The allowance for credit losses on our held-to-maturity securities was estimated on a collective basis by major security type and was based on a reasonable and supportable forecast period and a historical loss reversion for similar securities. The issuers continue to make timely principal and interest payments and we continue to accrue interest on all our securities. As of September 30, 2021, no other-than-temporary impairment was recorded on our held-to-maturity securities.

We recorded interest income (including the amortization of discount) related to these investments of $3.4 million and $9.4 million during the three and nine months ended September 30, 2021, respectively, and $2.9 million and $6.9 million during the three and nine months ended September 30, 2020, respectively.

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Investments in Equity Affiliates

9 Months Ended

Sep. 30, 2021

Investments in Equity Affiliates

Investments in Equity Affiliates

Note 8 — Investments in Equity Affiliates

We account for all investments in equity affiliates under the equity method. A summary of these investments is as follows (in thousands):

					UPB of Loans to
	Investments in Equity Affiliates at				Equity Affiliates at
Equity Affiliates	September 30, 2021		December 31, 2020		September 30, 2021
Arbor Residential Investor LLC	$	68,473	$	59,150	$	—
AMAC Holdings III LLC		12,223		10,308		—
Tapestry on the River		3,410		—		—
Emerson at Forney		3,000		—		—
North Vermont Avenue		2,420		2,496		—
Lightstone Value Plus REIT L.P.		1,895		1,895		—
JT Prime		425		425		—
West Shore Café		—		—		1,687
Lexford Portfolio		—		—		—
East River Portfolio		—		—		—
Total	$	91,846	$	74,274	$	1,687

Arbor Residential Investor LLC (“ARI”). During the three and nine months ended September 30, 2021, we recorded income of $5.4 million and $32.7 million, respectively, and during the three and nine months ended September 30, 2020, we recorded income of $32.3 million and $56.1 million, respectively, to income from equity affiliates in our consolidated statements of income. We also received cash distributions totaling $4.7 million and $23.4 million from this investment during the three and nine months ended September 30, 2021, respectively, and $15.0 million during both the three and nine months ended September 30, 2020, which were classified as returns of capital. In January 2021, an equity investor in the underlying residential mortgage banking business exercised their right to purchase an additional interest in this investment, which decreased our indirect interest to 12.3%. The allocation of income is based on the underlying agreements, which may be different than our indirect interest, and was 9.2% as of September 30, 2021.

Summarized statements of income for Wakefield Investment Holdings LLC, the third-party entity formed to hold the underlying residential mortgage banking business, are as follows (in thousands):

	Nine Months Ended September 30,
	2021		2020
Statements of Income:
Total revenues	$	935,444	$	1,171,796
Total expenses		722,882		790,454
Net income	$	212,562	$	381,342

AMAC Holdings III LLC (“AMAC III”). During 2021, we funded an additional $4.5 million of a total committed investment of $30.0 million, which brings the total funded investment to $16.3 million at September 30, 2021. During the three and nine months ended September 30, 2021 the loss recorded from this investment was $0.4 million and $0.9 million, respectively. We also received cash distributions totaling $1.7 million from this investment during the three months ended September 30, 2021, which were classified as returns of capital.

Century Summerfield Apartments. During the first quarter of 2021, we funded $17.0 million of a total committed investment of $20.0 million for a 50% equity interest in a joint venture with a third party that was formed to invest in an apartment community. During the second quarter of 2021, this joint venture was dissolved and we received distributions totaling $17.2 million and recorded a $0.2 million gain.

Tapestry on the River. During the three months ended September 30, 2021, we invested $14.0 million for a 48.9% equity interest in a joint venture with a third party that was formed to invest in an apartment community. We received distributions totaling $10.6 million during the three months ended September 30, 2021, which were classified as returns of capital.

Emerson at Forney. During the three months ended September 30, 2021, we invested $3.0 million for an 11.1% equity interest in a joint venture with a third party that was formed to invest in an apartment community.

See Note 17 for details of certain investments described above.

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Debt Obligations

9 Months Ended

Sep. 30, 2021

Debt Obligations

Debt Obligations

Note 9 — Debt Obligations

Credit and Repurchase Facilities

Borrowings under our credit and repurchase facilities are as follows ($ in thousands):

				September 30, 2021							December 31, 2020
			Note	Debt		Collateral					Debt		Collateral
	Current	Extended	Rate	Carrying		Carrying		Wtd. Avg.			Carrying		Carrying
	Maturity	Maturity	Type	Value (1)		Value		Note Rate			Value (1)		Value
Structured Business
$1.25B joint repurchase facility	Mar. 2022	Mar. 2023	V	$	1,068,118	$	1,449,400		2.32	%	$	681,006	$	1,054,562
$725M repurchase facility	Sept. 2022	Sept. 2023	V		343,511		484,880		2.08	%		191,622		259,559
$450M repurchase facility	Mar. 2023	Mar. 2026	V		211,118		270,396		1.97	%		—		—
$225M credit facility	Oct. 2022	Oct. 2023	V		14,403		21,755		3.90	%		23,606		31,809
$200M credit facility	July 2022	N/A	V		146,878		197,468		2.14	%		39,346		47,912
$200M repurchase facility	Oct. 2023	Oct 2024	V		110,592		148,021		1.86	%		31,780		40,551
$198.7M repurchase facility (2)	Dec. 2021	N/A	V		167,106		197,804		3.04	%		71,627		87,242
$164.4M loan specific credit facilities	Dec. 2021 to Jan. 2024	N/A	V/F		164,232		218,950		3.01	%		148,615		198,550
$100M credit facility	Oct. 2022	N/A	V		3,246		4,878		4.06	%		—		—
$50M credit facility	April 2022	N/A	V		22,407		28,485		2.11	%		15,992		21,300
$30M working capital facility	Nov. 2021	N/A	V		—		—		—			30,000		—
$25M credit facility	June 2022	June 2023	V		12,623		18,296		2.36	%		9,323		14,340
$1M master security agreements	Dec. 2022	N/A	F		790		—		4.01	%		1,441		—
Repurchase facilities - securities (3)	N/A	N/A	V		32,201		—		3.38	%		38,487		—
Structured Business total				$	2,297,225	$	3,040,333		2.35	%	$	1,282,845	$	1,755,825
Agency Business
$750M ASAP agreement	N/A	N/A	V	$	176,261	$	176,264		1.40	%	$	301,455	$	302,491
$750M joint repurchase facility	Mar. 2022	N/A	V		642,652		761,098		2.06	%		42,808		56,186
$400M repurchase facility (4)	Oct. 2021	N/A	V		169,406		169,409		1.58	%		174,515		174,555
$200M credit facility	Mar. 2022	N/A	V		108,533		108,635		1.60	%		294,732		296,698
$150M credit facility	Nov. 2021	N/A	V		3,100		3,100		1.43	%		49,632		49,754
$50M credit facility	Sept. 2022	N/A	V		1,275		1,275		1.38	%		88,896		88,911
$1.3M repurchase facility (2)	Dec. 2021	N/A	V		1,259		1,481		3.00	%		—		—
Agency Business total				$	1,102,486	$	1,221,262		1.83	%	$	952,038	$	968,595
Consolidated total				$	3,399,711	$	4,261,595		2.18	%	$	2,234,883	$	2,724,420

V = Variable Note Rate; F = Fixed Note Rate

(1) The debt carrying value for the Structured Business at September 30, 2021 and December 31, 2020 was net of unamortized deferred finance costs of $3.9 million and $3.3 million, respectively. The debt carrying value for the Agency Business at September 30, 2021 and December 31, 2020 was net of unamortized deferred finance costs of $1.6 million and $0.6 million, respectively.

(2) A portion of this repurchase facility was used to finance a fixed rate SFR permanent loan reported through our Agency Business.

(3) These repurchase facilities are subject to margin call provisions associated with changes in interest spreads. As of September 30, 2021 and December 31, 2020, these facilities were collateralized by our B Piece bonds with a carrying value of $50.3 million and $58.5 million, respectively, and an SFR bond with a carrying value of $10.0 million at December 31, 2020.

(4) We are currently in negotiations with the lender to amend this facility.

Generally, our credit and repurchase facilities have extension options that are at the discretion of the banking institutions in which we have long standing relationships with. These facilities typically renew annually and also include a “wind-down” feature.

Joint Repurchase Facility. We amended this facility three times in 2021 to increase the facility size to $2.00 billion, which is shared between the Structured Business and the Agency Business, and to extend the maturity to March 2022 with a one year extension option. This facility is used to finance structured loans and Private Label loans. The interest rate under the facility is determined on a loan-by-loan basis and may include a LIBOR floor equal to a pro rata share of the LIBOR floors included in our originated loans. The facility has a maximum advance rate of 80% on all loans and has a $50.0 million over advance available that bears interest at a rate of LIBOR plus 5.75%, which over advance availability matures in June 2022. If the estimated market value of the loans financed in this facility decrease, we may be required to pay down borrowings under this facility.

Structured Business

At September 30, 2021 and December 31, 2020, the weighted average interest rate for the credit and repurchase facilities of our Structured Business, including certain fees and costs, such as structuring, commitment, non-use and warehousing fees, was 2.53% and 2.97%, respectively. The leverage on our loan and investment portfolio financed through our credit and repurchase facilities, excluding the securities repurchase facilities, working capital facility and the master security agreements, was 75% and 69% at September 30, 2021 and December 31, 2020, respectively.

We amended our $400.0 million repurchase facility four times in 2021 to increase the facility size to $725 million and to extend the maturity to September 2022. The interest rate on new loans in 2021 is LIBOR plus 1.75% with a 0.35% LIBOR floor if utilization is above $250.0 million and LIBOR plus 2.00% with up to a 0.35% LIBOR floor if utilization is below $250.0 million. For existing loans, the interest rate will remain at LIBOR plus 2.00% to 2.20% with a LIBOR floor reduced to 0.35%.

In September 2021, we amended our $100.0 million repurchase facility to increase the facility size to $200.0 million and extend the maturity to October 2023.

In August 2021, we amended our $100.0 million credit facility to increase the facility size to $200.0 million, extend the maturity to July 2022 and amend the interest rates from a LIBOR-based rate to the Secured Overnight Financing Rate (“SOFR”) plus 1.50% for multifamily, SOFR plus 2.20% for independent living and SOFR plus 2.45% for assisted living.

In March 2021, we entered into a $200.0 million repurchase facility to finance bridge loans that has interest rates of LIBOR plus 1.75% - 2.75% and matures in March 2023. The facility has a maximum advance rate of 80%. In May 2021, we amended this facility increasing the facility size to $250.0 million. In August 2021, we amended this facility increasing the facility size to $450.0 million.

In March 2021, we amended our $50.0 million credit facility increasing the facility size to $150.0 million and decreased the all in floor rate by 0.15%. In September 2021, we amended this facility to increase the facility size to $225.0 million and allow for further reduction to the all in floor rate by up to 1.10%.

In March 2021, we entered into an $18.2 million credit facility used to finance a hotel bridge loan. The facility bore interest at the prime rate with a 3.25% floor and was scheduled to mature in December 2022. This facility was paid off in September 2021.

In February 2021, we entered into a $21.6 million credit facility used to finance a multifamily bridge loan. The facility bears interest at a 3.00% fixed rate and matures in January 2024.

Agency Business

During the third quarter of 2021, we amended our $150.0 million credit facility to reduce the interest rate to LIBOR plus 1.35% and extend the maturity to October 2021.

In August 2021, we amended our $100.0 million credit facility to decrease the facility size to $50.0 million, extend the maturity to September 2022 and increase the interest rate 0.15% to LIBOR plus 1.30%.

In March 2021, we amended our $150.0 million credit facility to increase the facility size to $200.0 million, extend the maturity to March 2022, increase the interest rate 0.20% and add a 0.25% LIBOR floor.

Collateralized Loan Obligations (“CLOs”)

We account for CLO transactions on our consolidated balance sheet as financing facilities. Our CLOs are VIEs for which we are the primary beneficiary and are consolidated in our financial statements. The investment grade tranches are treated as secured financings, and are non-recourse to us.

Borrowings and the corresponding collateral under our CLOs are as follows ($ in thousands):

	Debt						Collateral (3)
							Loans				Cash
			Carrying		Wtd. Avg.				Carrying		Restricted
September 30, 2021	Face Value		Value (1)		Rate (2)		UPB		Value		Cash (4)
CLO 16	$	1,237,500	$	1,229,631	1.41	%	$	1,147,056	$	1,140,662	$	312,984
CLO 15		674,412		669,272	1.47	%		796,612		792,770		—
CLO 14		655,475		650,531	1.43	%		724,633		722,221		42,341
CLO 13		668,000		664,700	1.52	%		767,167		765,158		26,182
CLO 12		534,193		531,616	1.60	%		601,231		599,879		25,764
CLO 11		533,000		530,785	1.54	%		592,829		591,484		53,347
CLO 10		441,000		439,269	1.55	%		508,598		507,346		39,511
Total CLOs	$	4,743,580	$	4,715,804	1.49	%	$	5,138,126	$	5,119,520	$	500,129

December 31, 2020
CLO 13	$	668,000	$	663,804	1.58	%	$	768,664	$	768,664	$	43
CLO 12		534,193		530,673	1.66	%		628,935		628,935		2,005
CLO 11		533,000		529,859	1.61	%		555,157		555,157		92,395
CLO 10		441,000		438,442	1.61	%		522,132		522,132		25,537
CLO 9		356,150		354,531	1.53	%		457,903		457,903		18,703
Total CLOs	$	2,532,343	$	2,517,309	1.60	%	$	2,932,791	$	2,932,791	$	138,683

(1) Debt carrying value is net of $27.8 million and $15.0 million of deferred financing fees at September 30, 2021 and December 31, 2020, respectively.

(2) At September 30, 2021 and December 31, 2020, the aggregate weighted average note rate for our CLOs, including certain fees and costs, was 1.79% and 1.93%, respectively.

(3) As of September 30, 2021 and December 31, 2020, there were no collateral deemed a “credit risk” as defined by the CLO indentures.

(4) Represents restricted cash held for principal repayments as well as for reinvestment in the CLOs. Does not include restricted cash related to interest payments, delayed fundings and expenses totaling $52.6 million and $49.5 million at September 30, 2021 and December 31, 2020, respectively.

CLO 16. In September 2021, we completed CLO 16, issuing eight tranches of CLO notes through two newly-formed wholly-owned subsidiaries totaling $1.37 billion. Of the total CLO notes issued, $1.24 billion were investment grade notes issued to third party investors and $135.0 million were below investment grade notes retained by us. As of the CLO closing date, the notes were secured by a portfolio of loan obligations with a face value of $1.19 billion, consisting primarily of bridge loans that were contributed from our existing loan portfolio. The financing has an approximate two-and-a-half-year replacement period that allows the principal proceeds and sale proceeds (if any) of the loan obligations to be reinvested in qualifying replacement loan obligations, subject to the satisfaction of certain conditions set forth in the indenture. Thereafter, the outstanding debt balance will be reduced as loans are repaid. Initially, the proceeds of the issuance of the securities also included $313.0 million for the purpose of acquiring additional loan obligations for a period of up to 180 days from the CLO closing date, resulting in the issuer owning loan obligations with a face value of $1.50 billion, representing leverage of 83%. We retained a residual interest in the portfolio with a notional amount of $262.5 million, including the $135.0 million below investment grade notes. The notes sold to third parties had an initial weighted average interest rate of 1.31% plus one-month LIBOR and interest payments on the notes are payable monthly.

CLO 15. In June 2021, we completed CLO 15, issuing eight tranches of CLO notes through two newly-formed wholly-owned subsidiaries totaling $747.8 million. Of the total CLO notes issued, $674.4 million were investment grade notes issued to third party investors and $73.4 million were below investment grade notes retained by us. As of the CLO closing date, the notes were secured by a portfolio of loan obligations with a face value of $653.0 million, consisting primarily of bridge loans that were contributed from our existing loan portfolio. The financing has an approximate two-and-a-half-year replacement period that allows the principal proceeds and sale proceeds (if any) of the loan obligations to be reinvested in qualifying replacement loan obligations, subject to the satisfaction of certain conditions set forth in the indenture. Thereafter, the outstanding debt balance will be reduced as loans are repaid. Initially, the proceeds of the issuance of the securities also included $162.0 million for the purpose of acquiring additional loan obligations for a period of up to 180 days from the CLO closing date, which we subsequently utilized, resulting in the issuer owning loan obligations with a face value of $815.0 million, representing leverage of 83%. We retained a residual interest in the portfolio with a notional amount of $140.6 million, including the $73.4 million below investment grade notes. The notes sold to third parties had an initial weighted average interest rate of 1.37% plus one-month LIBOR and interest payments on the notes are payable monthly.

CLO 14. In March 2021, we completed CLO 14, issuing eight tranches of CLO notes through two newly-formed wholly-owned subsidiaries totaling $724.2 million. Of the total CLO notes issued, $655.5 million were investment grade notes issued to third party investors and $68.7 million were below investment grade notes retained by us. As of the CLO closing date, the notes were secured by a portfolio of loan obligations with a face value of $635.2 million, consisting primarily of bridge loans that were contributed from our existing loan portfolio. The financing has a two-and-a-half-year replacement period that allows the principal proceeds and sale proceeds (if any) of the loan obligations to be reinvested in qualifying replacement loan obligations, subject to the satisfaction of certain conditions set forth in the indenture. Thereafter, the outstanding debt balance will be reduced as loans are repaid. Initially, the proceeds of the issuance of the securities also included $149.8 million for the purpose of acquiring additional loan obligations for a period of up to 180 days from the CLO closing date, which we subsequently utilized, resulting in the issuer owning loan obligations with a face value of $785.0 million, representing leverage of 84%. We retained a residual interest in the portfolio with a notional amount of $129.5 million, including the $68.7 million below investment grade notes. The notes sold to third parties had an initial weighted average interest rate of 1.33% plus one-month LIBOR and interest payments on the notes are payable monthly.

CLO 9. In March 2021, we unwound CLO 9, redeeming $356.2 million of outstanding notes which were repaid primarily from the refinancing of the remaining assets primarily within CLO 14, as well as with cash held by CLO 9, and expensed $1.4 million of deferred financing fees into loss on extinguishment of debt on the consolidated statements of income.

Senior Unsecured Notes

A summary of our senior unsecured notes is as follows (in thousands):

Senior			September 30, 2021						December 31, 2020
Unsecured	Issuance				Carrying		Wtd. Avg.				Carrying		Wtd. Avg.
Notes	Date	Maturity	UPB		Value (1)		Rate (2)		UPB		Value (1)		Rate (2)
4.50% Notes (3)	Aug. 2021	Sept. 2026	$	270,000	$	265,938	4.50	%	$	—	$	—	—	%
5.00% Notes (3)	Apr. 2021	Apr. 2026		175,000		172,148	5.00	%		—		—	—	%
8.00% Notes (3)	Apr. 2020	Apr. 2023		70,750		70,099	8.00	%		70,750		69,793	8.00	%
4.50% Notes (3)	Mar. 2020	Mar. 2027		275,000		272,356	4.50	%		275,000		271,994	4.50	%
4.75% Notes (4)	Oct. 2019	Oct. 2024		110,000		108,930	4.75	%		110,000		108,668	4.75	%
5.75% Notes (4)	Mar. 2019	Apr. 2024		90,000		89,038	5.75	%		90,000		88,751	5.75	%
5.625% Notes (4)	Mar. 2018	May 2023		125,000		124,069	5.63	%		125,000		123,637	5.63	%
			$	1,115,750	$	1,102,578	5.05	%	$	670,750	$	662,843	5.29	%

(1) At September 30, 2021 and December 31, 2020, the carrying value is net of deferred financing fees of $13.2 million and $7.9 million, respectively.

(2) At September 30, 2021 and December 31, 2020, the aggregate weighted average note rate, including certain fees and costs, was 5.36% and 5.65%, respectively.

(3) These notes can be redeemed by us prior to three months before the maturity date, at a redemption price equal to 100% of the aggregate principal amount, plus a “make-whole” premium and accrued and unpaid interest. We have the right to redeem the notes three months prior to or after the maturity date, at a redemption price equal to 100% of the aggregate principal amount, plus accrued and unpaid interest.

(4) These notes can be redeemed by us at any time prior to the maturity date, at a redemption price equal to 100% of the aggregate principal amount, plus a “make-whole” premium and accrued and unpaid interest. We have the right to redeem the notes on or after the maturity date, at a redemption price equal to 100% of the aggregate principal amount, plus accrued and unpaid interest.

In August 2021, we issued $270.0 million aggregate principal amount of 4.50% senior unsecured notes due in 2026 in a private offering. We received net proceeds of $265.8 million from the issuance, after deducting the underwriting discount and other offering expenses. We are using the net proceeds to make investments related to our business and for general corporate purposes.

In April 2021, we issued $175.0 million aggregate principal amount of 5.00% senior unsecured notes due in 2026 in a private offering. We received net proceeds of $172.3 million from the issuance, after deducting the underwriting discount and other offering expenses. We used the net proceeds to make investments related to our business and for general corporate purposes.

Convertible Senior Unsecured Notes

In 2019, we issued $264.0 million in aggregate principal amount of 4.75% convertible senior notes (the “4.75% Convertible Notes”) through a private placement offering, which includes the exercised purchaser’s total over-allotment option of $34.0 million. The 4.75% Convertible Notes pay interest semiannually in arrears and are scheduled to mature in November 2022, unless earlier converted or repurchased by the holders pursuant to their terms. The initial conversion rate was 56.1695 shares of common stock per $1,000 of principal representing a conversion price of $17.80 per share of common stock. We received proceeds totaling $256.5 million, net of the underwriter’s discount and fees, which is being amortized through interest expense over the life of such notes. We used the net proceeds from the issuance primarily for the exchange of $228.7 million of our 5.25% convertible senior notes (the “5.25% Convertible Notes”) for a combination of $233.1 million in cash (which included accrued interest) and 4,478,315 shares of our common stock. The remaining net proceeds were used for general corporate purposes. As of September 30, 2021, the 4.75% Convertible Notes had a conversion rate of 56.6847 shares of common stock per $1,000 of principal, which represented a conversion price of $17.64 per share of common stock.

In July 2021, the remaining $14.3 million principal amount of our 5.25% Convertible Notes matured and were fully settled with $14.3 million of cash and 386,459 shares of common stock.

Our convertible senior unsecured notes are not redeemable by us prior to their maturities and are convertible by the holder into, at our election, cash, shares of our common stock, or a combination of both, subject to the satisfaction of certain conditions and during specified periods. The conversion rates are subject to adjustment upon the occurrence of certain specified events and the holders may require us to repurchase all, or any portion, of their notes for cash equal to 100% of the principal amount, plus accrued and unpaid interest, if we undergo a fundamental change specified in the agreements. We intend to settle the principal balance of our convertible debt in cash and have not assumed share settlement of the principal balance for purposes of computing earnings per share (“EPS”). At the time of issuance, there was no precedent or policy that would indicate that we would settle the principal in shares or the conversion spread in cash.

Accounting guidance requires that convertible debt instruments with cash settlement features, including partial cash settlement, account for the liability component and equity component (conversion feature) of the instrument separately. The initial value of the liability component reflects the present value of the discounted cash flows using the nonconvertible debt borrowing rate at the time of the issuance. The debt discount represents the difference between the proceeds received from the issuance and the initial carrying value of the liability component, which is accreted back to the notes principal amount through interest expense over the term of the notes, which was 1.09 years and 1.77 years at September 30, 2021 and December 31, 2020, respectively, on a weighted average basis.

The UPB, unamortized discount and net carrying amount of the liability and equity components of our convertible notes are as follows (in thousands):

	Liability								Equity
	Component								Component
			Unamortized Debt		Unamortized Deferred		Net Carrying		Net Carrying
Period	UPB		Discount		Financing Fees		Value		Value
September 30, 2021	$	264,000	$	3,275	$	2,724	$	258,001	$	9,962
December 31, 2020	$	278,300	$	5,636	$	4,691	$	267,973	$	9,962

During the three months ended September 30, 2021, we incurred interest expense on the notes totaling $4.5 million, of which $3.1 million, $0.8 million and $0.6 million related to the cash coupon, amortization of the debt discount and of the deferred financing fees, respectively. During the nine months ended September 30, 2021, we incurred total interest expense on the notes of $14.1 million, of which $9.7 million, $2.4 million and $2.0 million related to the cash coupon, amortization of the debt discount and of the deferred financing fees, respectively. During the three months ended September 30, 2020, we incurred interest expense on the notes totaling $4.8 million, of which $3.3 million, $0.8 million and $0.7 million related to the cash coupon, amortization of the debt discount and of the deferred financing fees, respectively. During the nine months ended September 30, 2020, we incurred interest expense on the notes totaling $14.8 million, of which $10.0 million, $2.5 million and $2.3 million related to the cash coupon, amortization of the debt discount and of the deferred financing fees, respectively. Including the amortization of the deferred financing fees and debt discount, our weighted average total cost of the notes was 6.71% and 6.75% at September 30, 2021 and December 31, 2020, respectively.

Junior Subordinated Notes

The carrying values of borrowings under our junior subordinated notes were $142.2 million and $141.7 million at September 30, 2021 and December 31, 2020, respectively, which is net of a deferred amount of $10.4 million and $10.8 million, respectively, (which is amortized into interest expense over the life of the notes) and deferred financing fees of $1.8 million for both periods. These notes have maturities ranging from March 2034 through April 2037 and pay interest quarterly at a floating rate based on LIBOR. The weighted average note rate was 2.95% and 3.06% at September 30, 2021 and December 31, 2020, respectively. Including certain fees and costs, the weighted average note rate was 3.03% and 3.15% at September 30, 2021 and December 31, 2020, respectively.

Debt Covenants

Credit and Repurchase Facilities and Unsecured Debt. The credit and repurchase facilities and unsecured debt (senior and convertible notes) contain various financial covenants, including, but not limited to, minimum liquidity requirements, minimum net worth requirements, minimum unencumbered asset requirements, as well as certain other debt service coverage ratios, debt to equity ratios and minimum servicing portfolio tests. We were in compliance with all financial covenants and restrictions at September 30, 2021.

CLOs. Our CLO vehicles contain interest coverage and asset overcollateralization covenants that must be met as of the waterfall distribution date in order for us to receive such payments. If we fail these covenants in any of our CLOs, all cash flows from the applicable CLO would be diverted to repay principal and interest on the outstanding CLO bonds and we would not receive any residual payments until that CLO regained compliance with such tests. Our CLOs were in compliance with all such covenants as of September 30, 2021, as well as on the most recent determination dates in October 2021. In the event of a breach of the CLO covenants that could not be cured in the near-term, we would be required to fund our non-CLO expenses, including employee costs, distributions required to maintain our REIT status, debt costs, and other expenses with (i) cash on hand, (ii) income from any CLO not in breach of a covenant test, (iii) income from real property and loan assets, (iv) sale of assets, or (v) accessing the equity or debt capital markets, if available. We have the right to cure covenant breaches which would resume normal residual payments to us by purchasing non-performing loans out of the CLOs. However, we may not have sufficient liquidity available to do so at such time.

Our CLO compliance tests as of the most recent determination dates in October 2021 are as follows:

Cash Flow Triggers	CLO 10		CLO 11		CLO 12		CLO 13		CLO 14		CLO 15		CLO 16
Overcollateralization (1)
Current	126.98	%	121.95	%	118.87	%	119.76	%	119.76	%	120.85	%	121.21	%
Limit	125.98	%	120.95	%	117.87	%	118.76	%	118.76	%	119.85	%	120.21	%
Pass / Fail	Pass		Pass		Pass		Pass		Pass		Pass		Pass
Interest Coverage (2)
Current	350.15	%	400.85	%	302.20	%	391.59	%	368.75	%	334.86	%	472.24	%
Limit	120.00	%	120.00	%	120.00	%	120.00	%	120.00	%	120.00	%	120.00	%
Pass / Fail	Pass		Pass		Pass		Pass		Pass		Pass		Pass

(1) The overcollateralization ratio divides the total principal balance of all collateral in the CLO by the total principal balance of the bonds associated with the applicable ratio. To the extent an asset is considered a defaulted security, the asset’s principal balance for purposes of the overcollateralization test is the lesser of the asset’s market value or the principal balance of the defaulted asset multiplied by the asset’s recovery rate which is determined by the rating agencies. Rating downgrades of CLO collateral will generally not have a direct impact on the principal balance of a CLO asset for purposes of calculating the CLO overcollateralization test unless the rating downgrade is below a significantly low threshold (e.g. CCC-) as defined in each CLO vehicle.

(2) The interest coverage ratio divides interest income by interest expense for the classes senior to those retained by us.

Our CLO overcollateralization ratios as of the determination dates subsequent to each quarter are as follows:

Determination (1)	CLO 10		CLO 11		CLO 12		CLO 13		CLO 14		CLO 15		CLO 16
October 2021	126.98	%	121.95	%	118.87	%	119.76	%	119.76	%	120.85	%	121.21	%
July 2021	126.98	%	121.95	%	118.87	%	119.76	%	119.76	%	120.85	%	—
April 2021	126.98	%	121.95	%	118.87	%	119.76	%	119.76	%	—		—
January 2021	126.98	%	121.95	%	118.87	%	119.76	%	—		—		—
October 2020	126.98	%	121.95	%	118.87	%	119.76	%	—		—		—

(1) This table represents the quarterly trend of our overcollateralization ratio, however, the CLO determination dates are monthly and we were in compliance with this test for all periods presented.

The ratio will fluctuate based on the performance of the underlying assets, transfers of assets into the CLOs prior to the expiration of their respective replenishment dates, purchase or disposal of other investments, and loan payoffs. No payment due under the junior subordinated indentures may be paid if there is a default under any senior debt and the senior lender has sent notice to the trustee. The junior subordinated indentures are also cross-defaulted with each other.

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Allowance for Loss-Sharing Obligations

9 Months Ended

Sep. 30, 2021

Allowance for Loss-Sharing Obligations

Allowance for Loss-Sharing Obligations

Note 10 — Allowance for Loss-Sharing Obligations

Our allowance for loss-sharing obligations related to the Fannie Mae DUS program is as follows (in thousands):

	Three Months Ended September 30,				Nine Months Ended September 30,
	2021		2020		2021		2020
Beginning balance	$	65,645	$	73,220	$	64,303	$	34,648
Impact of adopting CECL - January 1, 2020		—		—		—		14,406
Provisions for loss sharing		(3,022)		(2,031)		(557)		22,538
Provisions reversal for loan repayments		(250)		(196)		(513)		(832)
Recoveries (charge-offs), net		455		167		(405)		400
Ending balance	$	62,828	$	71,160	$	62,828	$	71,160

When a loan is sold under the Fannie Mae DUS program, we undertake an obligation to partially guarantee the performance of the loan. A liability is recognized for the fair value of the guarantee obligation undertaken for the non-contingent aspect of the guarantee and is removed only upon either the expiration or settlement of the guarantee. At September 30, 2021 and 2020, guarantee obligations of $34.4 million and $33.2 million, respectively, were included in the allowance for loss-sharing obligations.

In addition to and separately from the fair value of the guarantee, we estimate our allowance for loss-sharing under CECL over the contractual period in which we are exposed to credit risk. The current expected loss related to loss-sharing was based on a collective pooling basis with similar risk characteristics, a reasonable and supportable forecast and a reversion period based on our average historical losses through the remaining contractual term of the portfolio.

When we settle a loss under the DUS loss-sharing model, the net loss is charged-off against the previously recorded loss-sharing obligation. The settled loss is often net of any previously advanced principal and interest payments in accordance with the DUS program, which are reflected as reductions to the proceeds needed to settle losses. At September 30, 2021 and December 31, 2020, we had outstanding advances of less than $0.1 million and $0.1 million, respectively, which were netted against the allowance for loss-sharing obligations.

At September 30, 2021 and December 31, 2020, our allowance for loss-sharing obligations, associated with expected losses under CECL, was $28.4 million and $30.3 million, respectively, and represented 0.15% and 0.17%, respectively, of the Fannie Mae servicing portfolio.

At September 30, 2021 and December 31, 2020, the maximum quantifiable liability associated with our guarantees under the Fannie Mae DUS agreement was $3.62 billion and $3.41 billion, respectively. The maximum quantifiable liability is not representative of the actual loss we would incur. We would be liable for this amount only if all of the loans we service for Fannie Mae, for which we retain some risk of loss, were to default and all of the collateral underlying these loans was determined to be without value at the time of settlement.

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Derivative Financial Instruments

9 Months Ended

Sep. 30, 2021

Derivative Financial Instruments

Derivative Financial Instruments

Note 11 — Derivative Financial Instruments

We enter into derivative financial instruments to manage exposures that arise from business activities resulting in the receipt or payment of future known and uncertain cash amounts, the value of which are determined by interest rates and credit risk. We do not use these derivatives for speculative purposes, but are instead using them to manage our interest rate and credit risk exposure.

Agency Rate Lock and Forward Sale Commitments. We enter into contractual commitments to originate and sell mortgage loans at fixed prices with fixed expiration dates. The commitments become effective when the borrower “rate locks” a specified interest rate within time frames established by us. All potential borrowers are evaluated for creditworthiness prior to the extension of the commitment. Market risk arises if interest rates move adversely between the time of the rate lock by the borrower and the sale date of the loan to an investor. To mitigate the effect of the interest rate risk inherent in providing rate lock commitments to borrowers under the GSE programs, we enter into a forward sale commitment with the investor simultaneously with the rate lock commitment with the borrower. The forward sale contract locks in an interest rate and price for the sale of the loan. The terms of the contract with the investor and the rate lock with the borrower are matched in substantially all respects, with the objective of eliminating interest rate risk to the extent practical. Sale commitments with the investors have an expiration date that is longer than our related commitments to the borrower to allow, among other things, for closing of the loan and processing of paperwork to deliver the loan into the sale commitment.

These commitments meet the definition of a derivative and are recorded at fair value, including the effects of interest rate movements which are reflected as a component of loss on derivative instruments, net in the consolidated statements of income. The estimated fair value of rate lock commitments also includes the fair value of the expected net cash flows associated with the servicing of the loan which is recorded as income from MSRs in the consolidated statements of income. During the three and nine months ended September 30, 2021, we recorded net losses of $8.6 million and $7.5 million, respectively, from changes in the fair value of these derivatives and $32.5 million and $95.7 million, respectively, of income from MSRs. During the three and nine months ended September 30, 2020, we recorded a net loss of $0.9 million and a net gain of $3.3 million, respectively, from changes in the fair value of these derivatives and $42.4 million and $96.7 million, respectively, of income from MSRs. The gains and losses are recorded in loss on derivative instruments, net on our consolidated statements of income. See Note 12 for details.

Interest Rate and Credit Default Swaps (“Swaps”). We enter into over-the-counter swaps to hedge our interest rate and credit risk exposure inherent in (1) our held-for-sale Agency Business Private Label loans from the time the loans are rate locked until sale and securitization, and (2) our Agency Business SFR – fixed rate loans from the time the loans are originated until the time they can be financed with match term fixed rate securitized debt. Our interest rate swaps typically have a three-month maturity and are tied to the five-year and ten-year swap rates. Our credit default swaps typically have a five-year maturity, are tied to the credit spreads of the underlying bond issuers and we typically hold our position until we price our Private Label loan securitizations. The Swaps do not meet the criteria for hedge accounting, are cleared by a central clearing house and variation margin payments, made in cash, are treated as a legal settlement of the derivative itself as opposed to a pledge of collateral.

During the three months ended September 30, 2021, we recorded realized and unrealized gains of $5.4 million and $1.9 million, respectively, to our Agency Business related to our Swaps. During the nine months ended September 30, 2021, we recorded realized losses of $1.1 million and unrealized gains of $1.5 million to our Agency Business related to Swaps. During the three months ended September 30, 2020, we recorded realized losses of $0.2 million and unrealized gains of $0.4 million to our Structured Business and realized losses of $0.1 million and unrealized gains of $0.1 million to our Agency Business related to our Swaps. During the nine months ended September 30, 2020, we recorded realized losses of $3.0 million and unrealized losses of $0.1 million to our Structured Business and realized losses of $57.3 million and unrealized losses of $1.5 million to our Agency Business related to our Swaps. The realized and unrealized gains and losses are recorded in loss on derivative instruments, net on our consolidated statements of income.

A summary of our non-qualifying derivative financial instruments is as follows ($ in thousands):

	September 30, 2021
					Fair Value
		Notional		Balance Sheet	Derivative		Derivative
Derivative	Count	Value		Location	Assets		Liabilities
Agency Business
Rate Lock Commitments	12	$	68,797	Other Assets/Other Liabilities	$	707	$	(1,369)
Forward Sale Commitments	45		527,480	Other Assets/Other Liabilities		1,489		(6,884)
Swaps	1,945		194,500			—		—
		$	790,777		$	2,196	$	(8,253)

	December 31, 2020
Agency Business
Rate Lock Commitments	7	$	136,354	Other Assets/Other Liabilities	$	1,967	$	(231)
Forward Sale Commitments	114		1,048,763	Other Assets/Other Liabilities		1,925		(990)
Swaps	453		45,300			—		—
		$	1,230,417		$	3,892	$	(1,221)

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Fair Value

9 Months Ended

Sep. 30, 2021

Fair Value

Fair Value

Note 12 — Fair Value

Fair value estimates are dependent upon subjective assumptions and involve significant uncertainties resulting in variability in estimates with changes in assumptions. The following table summarizes the principal amounts, carrying values and the estimated fair values of our financial instruments (in thousands):

	September 30, 2021						December 31, 2020
	Principal /		Carrying		Estimated		Principal /		Carrying		Estimated
	Notional Amount		Value		Fair Value		Notional Amount		Value		Fair Value
Financial assets:
Loans and investments, net	$	9,169,007	$	8,993,790	$	9,202,924	$	5,475,082	$	5,285,868	$	5,428,141
Loans held-for-sale, net		1,259,287		1,274,234		1,309,556		968,595		986,919		1,007,294
Capitalized mortgage servicing rights, net		n/a		417,283		473,679		n/a		379,974		415,495
Securities held-to-maturity, net		167,005		112,735		122,131		140,124		95,524		94,128
Derivative financial instruments		77,242		2,196		2,196		865,975		3,892		3,892
Financial liabilities:
Credit and repurchase facilities	$	3,405,232	$	3,399,711	$	3,399,579	$	2,238,722	$	2,234,883	$	2,235,668
Collateralized loan obligations		4,743,580		4,715,804		4,744,351		2,532,343		2,517,309		2,495,195
Senior unsecured notes		1,115,750		1,102,578		1,134,816		670,750		662,843		670,117
Convertible senior unsecured notes, net		264,000		258,001		296,472		278,300		267,973		280,636
Junior subordinated notes		154,336		142,192		101,169		154,336		141,656		99,594
Derivative financial instruments		519,035		8,253		8,253		319,142		1,221		1,221

Assets and liabilities disclosed at fair value are categorized based upon the level of judgment associated with the inputs used to measure their fair value. Determining which category an asset or liability falls within the hierarchy requires judgment and we evaluate our hierarchy disclosures each quarter. Hierarchical levels directly related to the amount of subjectivity associated with the inputs to fair valuation of these assets and liabilities are as follows:

Level 1—Inputs are unadjusted and quoted prices exist in active markets for identical assets or liabilities, such as government, agency and equity securities.

Level 2—Inputs (other than quoted prices included in Level 1) are observable for the asset or liability through correlation with market data. Level 2 inputs may include quoted market prices for a similar asset or liability, interest rates and credit risk. Examples include non-government securities, certain mortgage and asset-backed securities, certain corporate debt and certain derivative instruments.

Level 3—Inputs reflect our best estimate of what market participants would use in pricing the asset or liability and are based on significant unobservable inputs that require a considerable amount of judgment and assumptions. Examples include certain mortgage and asset-backed securities, certain corporate debt and certain derivative instruments.

The following is a description of the valuation techniques used to measure fair value and the general classification of these instruments pursuant to the fair value hierarchy.

Loans and investments, net. Fair values of loans and investments that are not impaired are estimated using inputs based on direct capitalization rate and discounted cash flow methodologies using discount rates, which, in our opinion, best reflect current market interest rates that would be offered for loans with similar characteristics and credit quality (Level 3). Fair values of impaired loans and investments are estimated using inputs that require significant judgments, which include assumptions regarding discount rates, capitalization rates, creditworthiness of major tenants, occupancy rates, availability of financing, exit plans and other factors (Level 3).

Loans held-for-sale, net. Consists of originated loans that are generally expected to be transferred or sold within 60 days to 180 days of loan funding, and are valued using pricing models that incorporate observable inputs from current market assumptions or a hypothetical securitization model utilizing observable market data from recent securitization spreads and observable pricing of loans with similar characteristics (Level 2). Fair value includes the fair value allocated to the associated future MSRs and is calculated pursuant to the valuation techniques described below for capitalized mortgage servicing rights, net (Level 3).

Capitalized mortgage servicing rights, net. Fair values are estimated using inputs based on discounted future net cash flow methodology (Level 3). The fair value of MSRs carried at amortized cost are estimated using a process that involves the use of independent third-party valuation experts, supported by commercially available discounted cash flow models and analysis of current market data. The key inputs used in estimating fair value include the contractually specified servicing fees, prepayment speed of the underlying loans, discount rate, annual per loan cost to service loans, delinquency rates, late charges and other economic factors.

Securities held-to-maturity, net. Fair values are approximated using inputs based on current market quotes received from financial sources that trade such securities and are based on prevailing market data and, in some cases, are derived from third-party proprietary models based on well recognized financial principles and reasonable estimates about relevant future market conditions (Level 3).

Derivative financial instruments. Fair values of rate lock and forward sale commitments are estimated using valuation techniques, which include internally-developed models developed based on changes in the U.S. Treasury rate and other observable market data (Level 2). The fair value of rate lock commitments includes the fair value of the expected net cash flows associated with the servicing of the loans, see capitalized mortgage servicing rights, net above for details on the applicable valuation technique (Level 3). We also consider the impact of counterparty non-performance risk when measuring the fair value of these derivatives. Given the credit quality of our counterparties, the short duration of interest rate lock commitments and forward sale contracts, and our historical experience, the risk of nonperformance by our counterparties is not significant.

Credit and repurchase facilities. Fair values for credit and repurchase facilities of the Structured Business are estimated using discounted cash flow methodology, using discount rates, which, in our opinion, best reflect current market interest rates for financing with similar characteristics and credit quality (Level 3). The majority of our credit and repurchase facilities for the Agency Business bear interest at rates that are similar to those available in the market currently and fair values are estimated using Level 2 inputs. For these facilities, the fair values approximate their carrying values.

Collateralized loan obligations and junior subordinated notes. Fair values are estimated based on broker quotations, representing the discounted expected future cash flows at a yield that reflects current market interest rates and credit spreads (Level 3).

Senior unsecured notes. Fair values are estimated at current market quotes received from active markets when available (Level 1). If quotes from active markets are unavailable, then the fair values are estimated utilizing current market quotes received from inactive markets (Level 2).

Convertible senior unsecured notes, net. Fair values are estimated using current market quotes received from inactive markets (Level 2).

We measure certain financial assets and financial liabilities at fair value on a recurring basis. The fair values of these financial assets and liabilities are determined using the following input levels as of September 30, 2021 (in thousands):

					Fair Value Measurements Using Fair
	Carrying				Value Hierarchy
	Value		Fair Value		Level 1		Level 2		Level 3
Financial assets:
Derivative financial instruments	$	2,196	$	2,196	$	—	$	1,489	$	707
Financial liabilities:
Derivative financial instruments	$	8,253	$	8,253	$	—	$	8,253	$	—

We measure certain financial and non-financial assets at fair value on a nonrecurring basis. The fair values of these financial and non-financial assets, if applicable, are determined using the following input levels as of September 30, 2021 (in thousands):

					Fair Value Measurements Using Fair
	Net Carrying				Value Hierarchy
	Value		Fair Value		Level 1		Level 2		Level 3
Financial assets:
Impaired loans, net (1)	$	66,126	$	66,126	$	—	$	—	$	66,126

(1) We had an allowance for credit losses of $94.9 million relating to eight impaired loans with an aggregate carrying value, before loan loss reserves, of $161.0 million at September 30, 2021.

Loan impairment assessments. Loans held for investment are intended to be held to maturity and, accordingly, are carried at cost, net of unamortized loan origination costs and fees, loan purchase discounts, and net of the allowance for credit losses, when such loan or investment is deemed to be impaired. We consider a loan impaired when, based upon current information, it is probable that we will be unable to collect all amounts due for both principal and interest according to the contractual terms of the loan agreement. We evaluate our loans to determine if the value of the underlying collateral securing the impaired loan is less than the net carrying value of the loan, which may result in an allowance and corresponding charge to the provision for credit losses. These valuations require significant judgments, which include assumptions regarding capitalization and discount rates, revenue growth rates, creditworthiness of major tenants, occupancy rates, availability of financing, exit plan and other factors. The table above and below includes all impaired loans, regardless of the period in which the impairment was recognized.

Quantitative information about Level 3 fair value measurements at September 30, 2021 is as follows ($ in thousands):

			Valuation
	Fair Value		Techniques	Significant Unobservable Inputs
Financial assets:
Impaired loans:
Land	$	50,000	Discounted cash flows	Discount rate	21.50	%
				Revenue growth rate	3.00	%
				Discount rate	10.15	%
Retail		15,530	Discounted cash flows	Capitalization rate	9.25	%
				Revenue growth rate	1.68	%
				Discount rate	11.00	%
Office		596	Discounted cash flows	Capitalization rate	9.00	%
				Revenue growth rate	2.50	%
Derivative financial instruments:
Rate lock commitments		707	Discounted cash flows	W/A discount rate	9.56	%

The derivative financial instruments using Level 3 inputs are outstanding for short periods of time (generally less than 60 days). A roll-forward of Level 3 derivative instruments is as follows (in thousands):

	Fair Value Measurements Using				Fair Value Measurements Using
	Significant Unobservable Inputs				Significant Unobservable Inputs
	Three Months Ended September 30,				Nine Months Ended September 30,
	2021		2020		2021		2020
Derivative assets and liabilities, net
Beginning balance	$	124	$	549	$	1,967	$	1,066
Settlements		(23,412)		(40,746)		(81,486)		(95,614)
Realized gains recorded in earnings		23,288		40,197		79,519		94,548
Unrealized gains recorded in earnings		707		2,160		707		2,160
Ending balance	$	707	$	2,160	$	707	$	2,160

The components of fair value and other relevant information associated with our rate lock commitments, forward sales commitments and the estimated fair value of cash flows from servicing on loans held-for-sale are as follows (in thousands):

	Notional/		Fair Value of		Interest Rate		Total Fair Value
September 30, 2021	Principal Amount		Servicing Rights		Movement Effect		Adjustment
Rate lock commitments	$	68,797	$	707	$	(1,369)	$	(662)
Forward sale commitments		527,480		—		1,369		1,369
Loans held-for-sale, net (1)		1,259,287		19,151		—		19,151
Total			$	19,858	$	—	$	19,858

(1) Loans held-for-sale, net are recorded at the lower of cost or market on an aggregate basis and includes fair value adjustments related to estimated cash flows from MSRs.

We measure certain assets and liabilities for which fair value is only disclosed. The fair value of these assets and liabilities are determined using the following input levels as of September 30, 2021 (in thousands):

					Fair Value Measurements Using Fair Value Hierarchy
	Carrying Value		Fair Value		Level 1		Level 2		Level 3
Financial assets:
Loans and investments, net	$	8,993,790	$	9,202,924	$	—	$	—	$	9,202,924
Loans held-for-sale, net		1,274,234		1,309,556		—		1,290,405		19,151
Capitalized mortgage servicing rights, net		417,283		473,679		—		—		473,679
Securities held-to-maturity, net		112,735		122,131		—		—		122,131
Financial liabilities:
Credit and repurchase facilities	$	3,399,711	$	3,399,579	$	—	$	1,102,486	$	2,297,093
Collateralized loan obligations		4,715,804		4,744,351		—		—		4,744,351
Senior unsecured notes		1,102,578		1,134,816		1,134,816		—		—
Convertible senior unsecured notes, net		258,001		296,472		—		296,472		—
Junior subordinated notes		142,192		101,169		—		—		101,169

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Commitments and Contingencies

9 Months Ended

Sep. 30, 2021

Commitments and Contingencies

Commitments and Contingencies

Note 13 — Commitments and Contingencies

Impact of COVID-19. The magnitude and duration of COVID-19 and its impact on our business and on our borrowers is uncertain and will mostly depend on future events, which cannot be predicted. As this pandemic continues and if economic conditions worsen, it may have long-term impacts on our financial position, results of operations and cash flows. See Note 2 and Item 1A. Risk Factors of our 2020 Annual Report for further discussion of COVID-19.

Agency Business Commitments. Our Agency Business is subject to supervision by certain regulatory agencies. Among other things, these agencies require us to meet certain minimum net worth, operational liquidity and restricted liquidity collateral requirements, and compliance with reporting requirements. Our adjusted net worth and liquidity required by the agencies for all periods presented exceeded these requirements.

As of September 30, 2021, we were required to maintain at least $19.0 million of liquid assets in one of our subsidiaries to meet our operational liquidity requirements for Fannie Mae and we had operational liquidity in excess of this requirement.

We are generally required to share the risk of any losses associated with loans sold under the Fannie Mae DUS program and are required to secure this obligation by assigning restricted cash balances and/or a letter of credit to Fannie Mae. The amount of collateral required by Fannie Mae is a formulaic calculation at the loan level by a Fannie Mae assigned tier, which considers the loan balance, risk level of the loan, age of the loan and level of risk-sharing. Fannie Mae requires restricted liquidity for Tier 2 loans of 75 basis points, 15 basis points for Tier 3 loans and 5 basis points for Tier 4 loans, which is funded over a 48-month period that begins upon delivery of the loan to Fannie Mae. A significant portion of our Fannie Mae DUS serviced loans for which we have risk sharing are Tier 2 loans. As of September 30, 2021, we met the restricted liquidity requirement with a $45.0 million letter of credit and $17.0 million of cash collateral.

As of September 30, 2021, reserve requirements for the Fannie Mae DUS loan portfolio will require us to fund $46.1 million in additional restricted liquidity over the next 48 months, assuming no further principal paydowns, prepayments, or defaults within our at-risk portfolio. Fannie Mae periodically reassesses these collateral requirements and may make changes to these requirements in the future. We generate sufficient cash flow from our operations to meet these capital standards and do not expect any changes to have a material impact on our future operations; however, future changes to collateral requirements may adversely impact our available cash.

We are subject to various capital requirements in connection with seller/servicer agreements that we have entered into with secondary market investors. Failure to maintain minimum capital requirements could result in our inability to originate and service loans for the respective investor and, therefore, could have a direct material effect on our consolidated financial statements. As of September 30, 2021, we met all of Fannie Mae’s quarterly capital requirements and our Fannie Mae adjusted net worth was in excess of the required net worth. We are not subject to capital requirements on a quarterly basis for Ginnie Mae and FHA, as requirements for these investors are only required on an annual basis.

As an approved designated seller/servicer under Freddie Mac's SBL program, we are required to post collateral to ensure that we are able to meet certain purchase and loss obligations required by this program. Under the SBL program, we are required to post collateral equal to $5.0 million, which is satisfied with a $5.0 million letter of credit.

We enter into contractual commitments with borrowers providing rate lock commitments while simultaneously entering into forward sale commitments with investors. These commitments are outstanding for short periods of time (generally less than 60 days) and are described in more detail in Note 11 and Note 12.

Debt Obligations and Operating Leases. As of September 30, 2021, the maturities of our debt obligations and the minimum annual operating lease payments under leases with a term in excess of one year are as follows (in thousands):

			Minimum Annual
	Debt		Operating Lease
Year	Obligations		Payments		Total
2021 (three months ending December 31, 2021)	$	1,426,798	$	2,127	$	1,428,925
2022		2,991,831		8,257		3,000,088
2023		1,652,679		8,031		1,660,710
2024		1,178,993		7,926		1,186,919
2025		497,701		7,978		505,679
2026		1,473,359		8,282		1,481,641
Thereafter		461,537		26,098		487,635
Total	$	9,682,898	$	68,699	$	9,751,597

During the three months ended September 30, 2021 and 2020, we recorded lease expense of $2.4 million and $1.5 million, respectively, and during the nine months ended September 30, 2021 and 2020, we recorded lease expense of $7.0 million and $4.6 million, respectively.

Unfunded Commitments. In accordance with certain structured loans and investments, we have outstanding unfunded commitments of $638.1 million as of September 30, 2021 that we are obligated to fund as borrowers meet certain requirements. Specific requirements include, but are not limited to, property renovations, building construction and conversions based on criteria met by the borrower in accordance with the loan agreements.

Litigation. We are currently neither subject to any material litigation nor, to the best of our knowledge, threatened by any material litigation other than the following:

In June 2011, three related lawsuits were filed by the Extended Stay Litigation Trust (the “Trust”), a post-bankruptcy litigation trust alleged to have standing to pursue claims that previously had been held by Extended Stay, Inc. and the Homestead Village L.L.C. family of companies (together “ESI”) (formerly Chapter 11 debtors, together the “Debtors”) that have emerged from bankruptcy. Two of the lawsuits were filed in the U.S. Bankruptcy Court for the Southern District of New York, and the third in the Supreme Court of the State of New York, New York County. There were 73 defendants in the three lawsuits, including 55 corporate and partnership entities and 18 individuals. A subsidiary of ours and certain other entities that are affiliates of ours are included as defendants. The New York State Court action was removed to the Bankruptcy Court. Currently, there is just a single case in Bankruptcy Court.

The lawsuits all alleged, as a factual basis and background, certain facts surrounding the June 2007 leveraged buyout of ESI from affiliates of Blackstone Capital. Our subsidiary, Arbor ESH II, LLC, had a $115.0 million investment in the Series A1 Preferred Units of a holding company of Extended Stay, Inc. The New York State Court action and one of the two federal court actions named as defendants Arbor ESH II, LLC, Arbor Commercial Mortgage, LLC (“ACM”), and ABT-ESI LLC, an entity in which we have a membership interest, among the broad group of defendants. These two actions were commenced by substantially identical complaints. The defendants are alleged, among other things, to have breached fiduciary and contractual duties by causing or allowing the Debtors to pay illegal dividends or other improper distributions of value at a time when the Debtors were insolvent. The Trust also alleges that the defendants aided and abetted, induced, or participated in breaches of fiduciary duty, waste, and unjust enrichment (“Fiduciary Duty Claims”) and name a director of ours, and a former general counsel of ACM, each of whom had served on the Board of Directors of ESI for a period of time. We are defending these two defendants and paying the costs of such defense. On the basis of the foregoing allegations, the Trust has asserted claims under a number of common law theories, seeking the return of assets transferred by the Debtors prior to the Debtors’ bankruptcy filing.

In the third action, filed in Bankruptcy Court, the same plaintiff, the Trust, named ACM and ABT-ESI LLC, together with a number of other defendants, and asserts claims, including constructive and fraudulent conveyance claims, under state and federal statutes, as well as a claim under the Federal Debt Collection Procedure Act.

In June 2013, the Trust filed a motion to amend the lawsuits, to, among other things, (i) consolidate the lawsuits into one lawsuit, (ii) remove 47 defendants from the lawsuits, none of whom are related to us, so that there are 26 remaining defendants, including 16 corporate and partnership entities and 10 individuals, and (iii) reduce the counts within the lawsuits from over 100 down to 17.

The remaining counts in the Trust’s amended complaint against our affiliates are principally state law claims for breach of fiduciary duties, waste, unlawful dividends and unjust enrichment, and claims under the Bankruptcy Code for avoidance and recovery actions, among others. The Bankruptcy Court granted the motion to amend and the amended complaint has been filed. The amended complaint seeks approximately $139.0 million in the aggregate, plus interest from the date of the alleged unlawful transfers, from director designees, portions of which are also sought from our affiliates as well as from unaffiliated defendants.

We moved to dismiss the referenced remaining actions in December 2013.

After supplemental briefing and multiple adjourned conferences, in August 2020, the Court issued a decision granting our motion to dismiss in part, dismissing 9 of the 17 counts. The Court permitted claims against director designees to proceed on theories of authorization of illegal dividends and breach of fiduciary duty. The Court permitted claims against the defendant entities, including our affiliated entities, to proceed on theories of constructive fraudulent transfer and fraudulent transfer under state and federal law. Moreover, the Court affirmatively dismissed four counts against the defendant entities to the extent they are based on distributions from certain so-called LIBOR Floor Certificates. According to the amended complaint, the total LIBOR Floor Certificate transfers were $74.0 million in value. As a result, with what remains of the amended complaint, total possible liability against the affiliated entities has correspondingly fallen, whereas total possible liability against the director designees remains at approximately $139.0 million.

The parties have stipulated to a schedule for discovery and we intend to vigorously defend against the remaining claims. We have not made a loss accrual for this litigation because we believe that it is not probable that a loss has been incurred and an amount cannot be reasonably estimated.

Due to Borrowers. Due to borrowers represents borrowers’ funds held by us to fund certain expenditures or to be released at our discretion upon the occurrence of certain pre-specified events, and to serve as additional collateral for borrowers’ loans. While retained, these balances earn interest in accordance with the specific loan terms they are associated with.

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Variable Interest Entities

9 Months Ended

Sep. 30, 2021

Variable Interest Entities

Variable Interest Entities

Note 14 — Variable Interest Entities

Our involvement with VIEs primarily affects our financial performance and cash flows through amounts recorded in interest income, interest expense, provision for loan losses and through activity associated with our derivative instruments.

Consolidated VIEs. We have determined that our operating partnership, ARLP, and our CLO entities, which we consolidate, are VIEs. ARLP is already consolidated in our financial statements, therefore, the identification of this entity as a VIE had no impact on our consolidated financial statements.

Our CLO consolidated entities invest in real estate and real estate-related securities and are financed by the issuance of debt securities. We, or one of our affiliates, are named collateral manager, servicer, and special servicer for all collateral assets held in CLOs, which we believe gives us the power to direct the most significant economic activities of those entities. We also have exposure to losses to the extent of our equity interests and also have rights to waterfall payments in excess of required payments to bond investors. As a result of consolidation, equity interests have been eliminated, and the consolidated balance sheets reflect both the assets held and debt issued to third parties by the CLOs, prior to the unwind. Our operating results and cash flows include the gross asset and liability amounts related to the CLOs as opposed to our net economic interests in those entities.

The assets and liabilities related to these consolidated CLOs are as follows (in thousands):

	September 30, 2021		December 31, 2020
Assets:
Restricted cash	$	552,705	$	188,226
Loans and investments, net		5,119,520		2,923,634
Other assets		34,328		22,587
Total assets	$	5,706,553	$	3,134,447
Liabilities:
Collateralized loan obligations	$	4,715,804	$	2,517,309
Other liabilities		5,722		2,755
Total liabilities	$	4,721,526	$	2,520,064

Assets held by the CLOs are restricted and can only be used to settle obligations of the CLOs. The liabilities of the CLOs are non-recourse to us and can only be satisfied from each respective asset pool. See Note 9 for details. We are not obligated to provide, have not provided, and do not intend to provide financial support to any of the consolidated CLOs.

Unconsolidated VIEs. We determined that we are not the primary beneficiary of 29 VIEs in which we have a variable interest as of September 30, 2021 because we do not have the ability to direct the activities of the VIEs that most significantly impact each entity’s economic performance.

A summary of our variable interests in identified VIEs, of which we are not the primary beneficiary, as of September 30, 2021 is as follows (in thousands):

Type	Carrying Amount (1)
Loans	$	482,495
APL certificates		63,727
B Piece bonds		50,769
Equity investments		14,644
Agency interest only strips		648
Total	$	612,283

(1) Represents the carrying amount of loans and investments before reserves. At September 30, 2021, $130.0 million of loans to VIEs had corresponding specific loan loss reserves of $79.4 million. The maximum loss exposure as of September 30, 2021 would not exceed the carrying amount of our investment.

These unconsolidated VIEs have exposure to real estate debt of approximately $4.01 billion at September 30, 2021.

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Equity

9 Months Ended

Sep. 30, 2021

Equity

Equity

Note 15 — Equity

Preferred Stock. In August 2021, we completed a public offering of 5,750,000 shares of 6.25% Series E cumulative redeemable preferred stock with a liquidation preference of $25.00 per share, generating net proceeds of approximately $139.1 million after deducting the underwriting discount and other offering expenses. The proceeds were used to make investments related to our business and for general corporate purposes. The Series E preferred stock is not redeemable by us prior to August 11, 2026 except under circumstances intended to preserve our qualification as a REIT and except upon the occurrence of a change of control.

In June 2021, we completed a public offering of 9,200,000 shares of 6.375% Series D cumulative redeemable preferred stock with a liquidation preference of $25.00 per share, generating net proceeds of approximately $222.6 million after deducting the underwriting discount and other offering expenses. We used $93.3 million of the proceeds to fully redeem our Series A, B and C preferred stock. The Series D preferred stock is not redeemable by us prior to June 2, 2026 except under circumstances intended to preserve our qualification as a REIT and except upon the occurrence of a change of control.

Subsequent Event. In October 2021, we completed a public offering of 8,050,000 shares of 6.25% Series F fixed-to-floating rate cumulative redeemable preferred stock with a liquidation preference of $25.00 per share, generating net proceeds of approximately $194.8 million after deducting the underwriting discount and other offering expenses. Holders of the Series F preferred stock will be entitled to receive cumulative dividends at a fixed rate equal to 6.25% from the date of issuance through October 29, 2026 and at a floating rate equal to a benchmark rate (which is expected to be the three-month SOFR) plus a spread of 5.442% per annum beginning October 30, 2026, provided that in no event should the rate be lower than 6.125%. The proceeds received are being used to make investments related to our business and for general corporate purposes. The Series F preferred stock is not redeemable by us prior to October 12, 2026 except under circumstances intended to preserve our qualification as a REIT and except upon the occurrence of a change of control.

Common Stock. In August 2021, we amended the equity distribution agreement with JMP Securities LLC (“JMP”). In accordance with the terms of the amendment, we may offer and sell up to 20,000,000 shares of our common stock in “At-The-Market” equity offerings through JMP by means of ordinary brokers’ transactions or otherwise at market prices prevailing at the time of sale, or at negotiated prices. During the nine months ended September 30, 2021, we sold 7,222,879 shares of our common stock for net proceeds of $123.8 million. We used $21.1 million of the net proceeds to redeem OP Units from two of ACM’s members for their membership interest in ACM. As of September 30, 2021, we had 19,200,000 shares available under the amended agreement.

In June 2021, we completed a public offering in which we sold 6,000,000 shares of our common stock for $18.46 per share and received net proceeds of $110.6 million after deducting the underwriter's discount and other offering expenses. The proceeds were used to make investments related to our business and for general corporate purposes. We also used $11.1 million of the net proceeds from this offering to purchase 600,000 shares of our common stock from ACM at the same price the underwriters paid to purchase the shares.
​

In March 2021, we completed a public offering in which we sold 7,000,000 shares of our common stock for $15.48 per share and received net proceeds of $108.2 million after deducting the underwriter's discount and other offering expenses. The proceeds were used to make investments related to our business and for general corporate purposes. We also used $12.4 million of the net proceeds from this offering to purchase 800,000 shares of our common stock from certain executive officers of ours, ACM and an estate planning family vehicle established by our chief executive officer at the same price the underwriters paid to purchase the shares.

Noncontrolling Interest. Noncontrolling interest relates to the operating partnership units (“OP Units”) issued to satisfy a portion of the purchase price in connection with the acquisition of the agency platform of ACM in 2016 (the “Acquisition”). Each of these OP Units are paired with one share of our special voting preferred shares having a par value of $0.01 per share and is entitled to one vote each on any matter submitted for stockholder approval. The OP Units are entitled to receive distributions if and when our Board of Directors authorizes and declares common stock distributions. The OP Units are also redeemable for cash, or at our option, for shares of our common stock on a one-for-one basis. At September 30, 2021, there were 16,325,095 OP Units outstanding, which represented 10.2% of the voting power of our outstanding stock.

Distributions. Dividends declared (on a per share basis) during the nine months ended September 30, 2021 are as follows:

Common Stock			Preferred Stock
				Dividend (1)
Declaration Date	Dividend		Declaration Date	Series A		Series B		Series C		Series D		Series E
February 17, 2021	$	0.33	February 1, 2021	$	0.515625	$	0.484375	$	0.53125		N/A	N/A
May 5, 2021	$	0.34	April 30, 2021	$	0.515625	$	0.484375	$	0.53125		N/A	N/A
July 28, 2021	$	0.35	July 2, 2021		N/A		N/A		N/A	$	0.256771	N/A

(1) The dividend declared on July 2, 2021 was for June 2, 2021 through July 29, 2021, the dividend declared on April 30, 2021 was for March 1, 2021 through May 31, 2021 and the dividend declared on February 1, 2021 was for December 1, 2020 through February 28, 2021. As mentioned above, we fully redeemed our Series A, B and C preferred stock in June 2021.
​

Common Stock – On October 27, 2021, the Board of Directors declared a cash dividend of $0.36 per share of common stock. The dividend is payable on November 30, 2021 to common stockholders of record as of the close of business on November 15, 2021.

Preferred Stock – On October 1, 2021, the Board of Directors declared a cash dividend of $0.3984375 per share of Series D preferred stock and a cash dividend of $0.34288 per share of Series E preferred stock. The Series D preferred stock dividend reflects accrued dividends from July 30, 2021 through October 29, 2021. The Series E preferred stock dividend reflects accrued dividends from August 11, 2021 (the date of issuance) through October 29, 2021. The dividends are payable on November 1, 2021 to preferred stockholders of record on October 15, 2021.

Deferred Compensation. During the nine months ended September 30, 2021, we issued 351,807 shares of restricted common stock to employees under the 2020 Amended Omnibus Stock Incentive Plan (the “2020 Plan”) with a total grant date fair value of $5.8 million, of which: (1) 115,047 shares with a grant date fair value of $1.9 million were fully vested on the grant date; (2) 99,952 shares with a grant date fair value of $1.7 million will vest on the first anniversary of the grant date; (3) 87,265 shares with a grant date fair value of $1.4 million will vest on the second anniversary of the grant date; (4) 25,479 shares with a grant date fair value of $0.4 million will vest on the third anniversary of the grant date; and (5) 24,064 shares with a grant date fair value of $0.4 million will vest on the fourth anniversary of the grant date. We also issued 27,864 shares of fully vested common stock to the independent members of the Board of Directors under the 2020 Plan with a grant date fair value of $0.4 million.

During the first quarter of 2021, 448,980 shares of performance-based restricted stock units previously granted to our chief executive officer fully vested and were net settled for 229,083 common shares.

During the nine months ended September 30, 2021, we withheld 183,144 shares from the net settlement of restricted common stock by employees for payment of withholding taxes on shares that vested.

In April 2021, we entered into a second amended and restated annual incentive agreement (the “2021 annual incentive agreement”) with our chief executive officer, effective January 1, 2021. The terms of the 2021 annual incentive agreement provide for: (1) an annual base salary of $1.2 million; (2) an annual cash payment of $0.8 million; and (3) annual performance cash bonus target opportunities of $2.9 million at target performance, $1.5 million at threshold performance and $4.4 million at maximum performance, with the opportunity to earn an additional $0.7 million annually in the event of extraordinary performance with respect to corporate capital growth goals. The 2021 annual incentive agreement also provides for: (1) a grant with a value of $3.0 million to be made in July 2021, dependent on reaching certain goals relating to the integration of the Acquisition (“Acquisition Related Grant”), which represents the last Acquisition Related Grant; and (2) at our chief executive officer’s option, to be exercised annually for the remainder of the term of the 2021 annual incentive agreement, either (i) a grant with a value of $3.0 million, which will vest in full three years from the date of the grant (“Time Based Vesting Equity Award”) or (ii) a performance based award of restricted stock (“Performance-Based TSR Equity Award”) with an annual value at grant of $12.0 million, relating to our total stockholder return objectives. The Acquisition Related Grant will vest in full on the third anniversary of the grant date. The Performance-Based TSR Equity Award will vest, in whole or in part, based on the attainment of total stockholder return goals over a five-year period.

In April 2021, our chief executive officer elected to receive the Time Based Vesting Equity Award option in connection with the 2021 annual incentive agreement; therefore, we granted our chief executive officer 184,729 shares of restricted common stock with a grant date fair value of $3.1 million that vest in full in April 2024. In July 2021, we granted our chief executive officer 165,746 shares of performance based restricted stock with a grant date fair value of $3.0 million in connection with the Acquisition Related Grant, which vest in full in July 2024. In addition, 294,985 shares of performance-based restricted stock granted in 2018 vested in the third quarter of 2021, which were net settled for 150,530 common shares.

Earnings Per Share. Basic EPS is calculated by dividing net income (loss) attributable to common stockholders by the weighted average number of shares of common stock outstanding during each period inclusive of unvested restricted stock with full dividend participation rights. Diluted EPS is calculated by dividing net income (loss) by the weighted average number of shares of common stock outstanding, plus the additional dilutive effect of common stock equivalents during each period using the treasury stock method. Our common stock equivalents include the weighted average dilutive effect of performance-based restricted stock units granted to our chief executive officer, OP Units and convertible senior unsecured notes.

A reconciliation of the numerator and denominator of our basic and diluted EPS computations ($ in thousands, except share and per share data) is as follows:

	Three Months Ended September 30,
	2021				2020
	Basic		Diluted		Basic		Diluted
Net income attributable to common stockholders (1)	$	72,804	$	72,804	$	81,997	$	81,997
Net income attributable to noncontrolling interest (2)		—		8,347		—		13,836
Net income attributable to common stockholders and noncontrolling interest	$	72,804	$	81,151	$	81,997	$	95,833
Weighted average shares outstanding		142,624,300		142,624,300		113,766,446		113,766,446
Dilutive effect of OP Units (2)		—		16,351,643		—		19,196,660
Dilutive effect of restricted stock units (3)		—		940,045		—		1,029,668
Dilutive effect of convertible notes (4)		—		354,917		—		4,313
Weighted average shares outstanding		142,624,300		160,270,905		113,766,446		133,997,087
Net income per common share (1)	$	0.51	$	0.51	$	0.72	$	0.72

	Nine Months Ended September 30,
	2021				2020
	Basic		Diluted		Basic		Diluted
Net income attributable to common stockholders (1)	$	211,409	$	211,409	$	66,778	$	66,778
Net income attributable to noncontrolling interest (2)		—		26,806		—		11,012
Net income attributable to common stockholders and noncontrolling interest	$	211,409	$	238,215	$	66,778	$	77,790
Weighted average shares outstanding		134,437,663		134,437,663		111,775,436		111,775,436
Dilutive effect of OP Units (2)		—		16,985,073		—		19,993,983
Dilutive effect of restricted stock units (3)		—		927,542		—		600,648
Dilutive effect of convertible notes (4)		—		341,183		—		31,248
Weighted average shares outstanding		134,437,663		152,691,461		111,775,436		132,401,315
Net income per common share (1)	$	1.57	$	1.56	$	0.60	$	0.59

(1) Net of preferred stock dividends.

(2) We consider OP Units to be common stock equivalents as the holders have voting rights, the right to distributions and the right to redeem the OP Units for the cash value of a corresponding number of shares of common stock or a corresponding number of shares of common stock, at our election.

(3) Our chief executive officer was granted restricted stock units during 2020, which vest at the end of a four-year performance period based upon our achievement of total stockholder return objectives.

(4) The convertible senior unsecured notes impact diluted earnings per share if the average price of our common stock exceeds the conversion price, as calculated in accordance with the terms of the indenture.

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Income Taxes

9 Months Ended

Sep. 30, 2021

Income Taxes

Income Taxes

Note 16 — Income Taxes

As a REIT, we are generally not subject to U.S. federal income tax to the extent of our distributions to stockholders and as long as certain asset, income, distribution, ownership and administrative tests are met. To maintain our qualification as a REIT, we must annually distribute at least 90% of our REIT-taxable income to our stockholders and meet certain other requirements. We may also be subject to certain state, local and franchise taxes. Under certain circumstances, federal income and excise taxes may be due on our undistributed taxable income. If we were to fail to meet these requirements, we would be subject to U.S. federal income tax, which could have a material adverse impact on our results of operations and amounts available for distributions to our stockholders. We believe that all of the criteria to maintain our REIT qualification have been met for the applicable periods, but there can be no assurance that these criteria will continue to be met in subsequent periods.

The Agency Business is operated through our TRS Consolidated Group and is subject to U.S. federal, state and local income taxes. In general, our TRS entities may hold assets that the REIT cannot hold directly and may engage in real estate or non-real estate-related business.

In the three and nine months ended September 30, 2021, we recorded a tax provision of $9.9 million and $33.4 million, respectively. In the three and nine months ended September 30, 2020, we recorded a tax provision of $17.8 million and $15.5 million, respectively. The tax provision recorded in the three months ended September 30, 2021 consisted of current and deferred tax provisions of $3.6 million and $6.3 million, respectively. The tax provision recorded in the nine months ended September 30, 2021 consisted of current and deferred tax provisions of $22.7 million and $10.7 million, respectively. The tax provision recorded in the three months ended September 30, 2020 consisted of a current tax provision of $13.9 million and a deferred tax provision of $3.9 million. The tax provision recorded in the nine months ended September 30, 2020 consisted of a current tax provision of $20.7 million and a deferred tax benefit of $5.2 million. Current and deferred taxes are primarily recorded on the portion of earnings (losses) recognized by us with respect to our interest in the TRS’s. Deferred income tax assets and liabilities are calculated based on temporary differences between our U.S. GAAP consolidated financial statements and the federal, state, local tax basis of assets and liabilities as of the consolidated balance sheets.

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Agreements and Transactions with Related Parties

9 Months Ended

Sep. 30, 2021

Agreements and Transactions with Related Parties

Agreements and Transactions with Related Parties

Note 17 — Agreements and Transactions with Related Parties

Support Agreement and Employee Secondment Agreement. We have a support agreement and a secondment agreement with ACM and certain of its affiliates and certain affiliates of a relative of our chief executive officer (“Service Recipients”) where we provide support services and seconded employees to the Service Recipients. The Service Recipients reimburse us for the costs of performing such services and the cost of the seconded employees. During the three and nine months ended September 30, 2021, we incurred $0.8 million and $2.4 million, respectively, and, during the three and nine months ended September 30, 2020, we incurred $0.6 million and $1.8 million, respectively, of costs for services provided and employees seconded to the Service Recipients, all of which were reimbursed to us and included in due from related party on the consolidated balance sheets.

Other Related Party Transactions. Due from related party was $12.7 million and $12.4 million at September 30, 2021 and December 31, 2020, respectively, which consisted primarily of amounts due from our affiliated servicing operations related to real estate transactions closing at the end of the quarter and amounts due from ACM for costs incurred in connection with the support and secondment agreements described above.

Due to related party was $4.4 million and $2.4 million at September 30, 2021 and December 31, 2020, respectively, and consisted of loan payoffs, holdbacks and escrows to be remitted to our affiliated servicing operations related to real estate transactions.

In March 2021, we originated a $63.4 million bridge loan to a third-party to purchase a multifamily property from a multifamily-focused commercial real estate investment fund sponsored and managed by our chief executive officer and one of his immediate family members, which fund has no continued involvement with the property following the purchase. The loan has an interest rate of LIBOR plus 3.75% with a LIBOR floor of 0.25% and matures in March 2024. Interest income recorded from this loan was $0.7 million and $1.4 million for the three and nine months ended September 30, 2021, respectively.

In December 2020, we committed to fund a $32.5 million bridge loan (of which $2.3 million was funded as of September 30, 2021) and made a $3.5 million preferred equity investment in a SFR build-to-rent construction project. An entity owned by an immediate family member of our chief executive officer also made an equity investment in the project and owns a 21.8% equity interest in the borrowing entity. The bridge loan has an interest rate of LIBOR plus 5.50% with a LIBOR floor of 0.75% and matures in October 2023 and the preferred equity investment has a fixed rate of 12% and matures in October 2023. Interest income recorded from these loans was $0.1 million and $0.4 million for the three and nine months ended September 30, 2021, respectively.

In October 2020, we committed to fund a $30.5 million bridge loan and made a $4.6 million preferred equity investment in a SFR build-to-rent construction project. ACM and an entity owned by an immediate family member of our chief executive officer also made equity investments in the project and own an 18.9% equity interest in the borrowing entity. The bridge loan, which was not funded as of September 30, 2021, has an interest rate of LIBOR plus 5.50% with a LIBOR floor of 0.75% and matures in May 2023 and the preferred equity investment has a fixed rate of 12% and matures in April 2023. Interest income recorded from the preferred equity investment was $0.1 million and $0.4 million for the three and nine months ended September 30, 2021, respectively.

We have a $35.0 million bridge loan and a $7.8 million preferred equity interest on an office building in New York City. The property is controlled by a third party. The day-to-day operations were previously managed by an entity owned by an immediate family member of our chief executive officer. On September 1, 2021, we entered into a forbearance agreement with the borrower on the outstanding bridge loan to defer all interest owed to payoff. Interest income recorded from these loans was $0.3 million and $1.0 million for the three and nine months ended September 30, 2021, respectively, and $0.3 million and $1.7 million for the three and nine months ended September 30, 2020, respectively.

In March 2020, we originated a $14.8 million Private Label loan and a $3.4 million mezzanine loan on two multifamily properties owned in part by a consortium of investors (which includes, among other unaffiliated investors, certain of our officers and our chief executive officer) which owns a 50% interest in the borrowing entity. The Private Label loan bears interest at a fixed rate of 3.1% and the mezzanine loan bears interest at a fixed rate of 9.0% and both loans mature in April 2030. In May 2020, we sold the Private Label loan to an unconsolidated affiliate of ours. Interest income recorded from these loans totaled $0.1 million and $0.2 million for the three and nine months ended September 30, 2021, respectively, and $0.1 million and $0.3 million for the three and nine months ended September 30, 2020, respectively.

In certain instances, our business requires our executives to charter privately owned aircraft in furtherance of our business. In 2019, we entered into an aircraft time-sharing agreement with an entity controlled by our chief executive officer that owns private aircraft. Pursuant to the agreement, we reimburse the aircraft owner for the required costs under Federal Aviation Administration regulations for the flights our executives' charter. During the nine months ended September 30, 2021 and 2020, we reimbursed the aircraft owner $0.1 million and $0.4 million, respectively, for the flights chartered by our executives pursuant the agreement.

In 2019, we, along with ACM, certain executives of ours and a consortium of independent outside investors, formed AMAC III, a multifamily-focused commercial real estate investment fund sponsored and managed by our chief executive officer and one of his immediate family members. We committed to a $30.0 million investment (of which $16.2 million was funded as of September 30, 2021) for an 18% interest in AMAC III. During the three and nine months ended September 30, 2021 the loss recorded from this investment was $0.4 million and $0.9 million, respectively. During the three and nine months ended September 30, 2020, the loss recorded from this investment was less than $0.1 million and $0.6 million, respectively. In July 2019, AMAC III originated a $7.0 million mezzanine loan to a borrower with which we have an outstanding $34.0 million bridge loan. In June 2020, for full satisfaction of the mezzanine loan, AMAC III became the owner of the property. In August 2020, the $34.0 million bridge loan was refinanced with a $35.4 million bridge loan, which bears interest at a rate of LIBOR plus 3.50% and matures in August 2022. We also originated a $15.6 million Private Label loan in December 2019 to a borrower which is 100% owned by AMAC III, which bears interest at a fixed rate of 3.735% and matures in January 2030. In May 2020, we sold the Private Label loan to an unconsolidated affiliate of ours. Interest income recorded from these loans totaled $0.3 million and $0.9 million for the three and nine months ended September 30, 2021, respectively, and $1.6 million for the nine months ended September 30, 2020.

In 2018, we originated a $37.5 million bridge loan, which was used to purchase several multifamily properties. In 2019, an entity owned, in part, by an immediate family member of our chief executive officer, purchased a 23.9% interest in the borrowing entity. The loan had an interest rate of LIBOR plus 4.25% with a LIBOR floor of 2.375% and was scheduled to mature in October 2020. In May 2020, the borrower repaid this loan in full. Interest income recorded from this loan was $1.4 million for the nine months ended September 30, 2020.
​

In 2018, we acquired a $19.5 million bridge loan originated by ACM. The loan was used to purchase several multifamily properties by a consortium of investors (which includes, among other unaffiliated investors, certain of our officers and our chief executive officer) which owns 85% of the borrowing entity. The loan had an interest rate of LIBOR plus 4.0% with a LIBOR floor of 2.125% and was scheduled to mature in July 2021. In January 2021, the borrower repaid this loan in full. Interest income recorded from this loan was $0.3 million and $0.9 million for the three and nine months ended September 30, 2020, respectively.

In 2018, we originated a $17.7 million bridge loan to an entity owned, in part, by an immediate family member of our chief executive officer, who owns a 10.8% interest in the borrowing entity. The loan was used to purchase several undeveloped parcels of land. The loan has a fixed interest rate of 10% and was scheduled to mature in February 2020. In September 2019, the borrower made a partial paydown of principal totaling $4.7 million and the remaining balance was paid off in January 2020. Interest income recorded from this loan was $0.1 million for the nine months ended September 30, 2020.

In 2018, we originated a $21.7 million bridge loan on a multifamily property owned in part by a consortium of investors (which includes, among other unaffiliated investors, certain of our officers and our chief executive officer) which owns 75% in the borrowing entity. The loan has an interest rate of LIBOR plus 4.75% with a LIBOR floor of 1.25% and was scheduled to mature in June 2021, which was extended to August 2023. Interest income recorded from this loan was $0.3 million for both the three months ended September 30, 2021 and 2020, and $1.0 million for both the nine months ended September 30, 2021 and 2020.

In 2018, we acquired a $9.4 million bridge loan originated by ACM. The loan was used to purchase several multifamily properties by a consortium of investors (which includes, among other unaffiliated investors, certain of our officers and our chief executive officer) which owns 75% of the borrowing entity. The loan has an interest rate of LIBOR plus 5.0% with a LIBOR floor of 1.25% and was scheduled to mature in January 2021. In January 2021, the maturity date of this loan was extended to January 2022 and, in September 2021, this loan paid off in full. Interest income recorded from this loan was $0.3 million for the nine months ended September 30, 2021. Interest income recorded from this loan was $0.1 million and $0.4 million for the three and nine months ended September 30, 2020, respectively.

In 2017, we originated two bridge loans totaling $28.0 million on two multifamily properties owned in part by a consortium of investors (which includes, among other unaffiliated investors, certain of our officers and our chief executive officer) which owns 45% of the borrowing entity. The loans had an interest rate of LIBOR plus 5.25% with LIBOR floors ranging from 1.24% to 1.54% and were scheduled to mature in the fourth quarter of 2020. The borrower refinanced these loans with a $31.1 million bridge loan we originated in 2019 with an interest rate of LIBOR plus 4.0%, a LIBOR floor of 1.80% and a maturity date in October 2021. Interest income recorded from this loan was $0.5 million for both the three months ended September 30, 2021 and 2020, and $1.4 million for both the nine months ended September 30, 2021 and 2020.

In 2017, we originated a $46.9 million Fannie Mae loan on a multifamily property owned in part by a consortium of investors (which includes, among other unaffiliated investors, certain of our officers) which owns a 17.6% interest in the borrowing entity. We carry a maximum loss-sharing obligation with Fannie Mae on this loan of up to 5% of the original UPB. Servicing revenue recorded from this loan was less than $0.1 million for all periods presented.

In 2017, Ginkgo Investment Company LLC (“Ginkgo”), of which one of our directors is a 33% managing member, purchased a multifamily apartment complex which assumed an existing $8.3 million Fannie Mae loan that we service. Ginkgo subsequently sold the majority of its interest in this property and owned a 3.6% interest at September 30, 2021. We carry a maximum loss-sharing obligation with Fannie Mae on this loan of up to 20% of the original UPB. Upon the sale, we received a 1% loan assumption fee which was governed by existing loan agreements that were in place when the loan was originated in 2015, prior to such purchase. Servicing revenue recorded from this loan was less than $0.1 million for all periods presented.

In 2016, we originated $48.0 million of bridge loans on six multifamily properties owned in part by a consortium of investors (which includes, among other unaffiliated investors, certain of our officers and our chief executive officer) which owns interests ranging from 10.5% to 12.0% in the borrowing entities. The loans had an interest rate of LIBOR plus 4.5% with a LIBOR floor of 0.25% and were scheduled to mature in September 2019. In 2017, a $6.8 million loan on one property paid off in full and in 2018 four additional loans totaling $28.3 million paid off in full. In January 2019, $10.9 million of the $12.9 million remaining bridge loan paid off, with the $2.0 million remaining UPB converting to a mezzanine loan with a fixed interest rate of 10.0% and a January 2024 maturity. Interest income recorded from the remaining mezzanine loan was $0.1 million for both the three months ended September 30, 2021 and 2020, and $0.2 million for both the nine months ended September 30, 2021 and 2020.

In 2015, we invested $9.6 million for 50% of ACM's indirect interest in a joint venture with a third party that was formed to invest in a residential mortgage banking business. As a result of this transaction, we had an initial indirect interest of 22.5% in this entity. In January 2021, an equity investor in the underlying residential mortgage banking business exercised their right to purchase an additional interest in this investment, which decreased our indirect interest to 12.3%. We recorded income from equity affiliates related to this investment of $5.4 million and $32.7 million in the three and nine months ended September 30, 2021, respectively, and $32.3 million and $56.1 million in the three and nine months ended September 30, 2020, respectively. During the three and nine months ended September 30, 2021, we also received cash distributions totaling $4.7 million and $23.4 million from this investment, respectively, which were classified as returns of capital.

We, along with an executive officer of ours and a consortium of independent outside investors, hold equity investments in a portfolio of multifamily properties referred to as the “Lexford” portfolio, which is managed by an entity owned primarily by a consortium of affiliated investors, including our chief executive officer and an executive officer of ours. Based on the terms of the management contract, the management company is entitled to 4.75% of gross revenues of the underlying properties, along with the potential to share in the proceeds of a sale or restructuring of the debt. In 2018, the owners of Lexford restructured part of its debt and we originated 12 bridge loans totaling $280.5 million, which were used to repay in full certain existing mortgage debt and to renovate 72 multifamily properties included in the portfolio. The loans were originated in 2018, had interest rates of LIBOR plus 4.0% and were scheduled to mature in June 2021. During 2019, the borrower made payoffs and partial paydowns of principal totaling $250.0 million and in March 2020, the remaining balance of the loans were refinanced with a $34.6 million Private Label loan, which bears interest at a fixed rate of 3.30% and matures in March 2030. In May 2020, we sold the Private Label loan to an unconsolidated affiliate of ours. Interest income recorded from these loans totaled $0.5 million during the nine months ended September 30, 2020. Further, as part of this restructuring, $50.0 million in unsecured financing was provided by an unsecured lender to certain parent entities of the property owners. ACM owns slightly less than half of the unsecured lender entity and, therefore, provided slightly less than half of the unsecured lender financing. In addition, in connection with our equity investment, we received distributions totaling $1.1 million during the nine months ended September 30, 2020, which was recorded as income from equity affiliates. Separate from the loans we originated in 2018, we provide limited (“bad boy”) guarantees for certain other debt controlled by Lexford. The bad boy guarantees may become a liability for us upon standard “bad” acts such as fraud or a material misrepresentation by Lexford or us. At September 30, 2021, this debt had an aggregate outstanding balance of $607.4 million and is scheduled to mature through 2029.

Several of our executives, including our chief financial officer, senior counsel and our chairman, chief executive officer and president, hold similar positions for ACM. Our chief executive officer and his affiliated entities (“the Kaufman Entities”) together beneficially own approximately 35% of the outstanding membership interests of ACM and certain of our employees and directors also hold an ownership interest in ACM. Furthermore, one of our directors serves as the trustee and co-trustee of two of the Kaufman Entities that hold membership interests in ACM. Upon the closing of the Acquisition in 2016, we issued OP Units, each paired with one share of our special voting preferred shares. At September 30, 2021, ACM holds 2,828,629 shares of our common stock and 10,665,530 OP Units, which in the aggregate represents 8.5% of the voting power of our outstanding stock. Our Board of Directors approved a resolution under our charter allowing our chief executive officer and ACM (in which our chief executive officer has a controlling equity interest in) to own more than the 5% ownership interest limit of our common stock as stated in our amended charter.

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Segment Information

9 Months Ended

Sep. 30, 2021

Segment Information

Segment Information

Note 18 — Segment Information

The summarized statements of income and balance sheet data, as well as certain other data, by segment are included in the following tables ($ in thousands). Specifically identifiable costs are recorded directly to each business segment. For items not specifically identifiable, costs have been allocated between the business segments using the most meaningful allocation methodologies, which was predominately direct labor costs (i.e., time spent working on each business segment). Such costs include, but are not limited to, compensation and employee related costs, selling and administrative expenses and stock-based compensation.

	Three Months Ended September 30, 2021
	Structured		Agency		Other /
	Business		Business		Eliminations (1)		Consolidated
Interest income	$	114,710	$	10,770	$	—	$	125,480
Interest expense		50,823		4,737		—		55,560
Net interest income		63,887		6,033		—		69,920
Other revenue:
Gain on sales, including fee-based services, net		—		16,334		—		16,334
Mortgage servicing rights		—		32,453		—		32,453
Servicing revenue		—		34,960		—		34,960
Amortization of MSRs		—		(14,872)		—		(14,872)
Loss on derivative instruments, net		—		(1,492)		—		(1,492)
Other income, net		2,168		27		—		2,195
Total other revenue		2,168		67,410		—		69,578
Other expenses:
Employee compensation and benefits		14,082		27,891		—		41,973
Selling and administrative		5,718		6,039		—		11,757
Property operating expenses		149		—		—		149
Depreciation and amortization		634		1,173		—		1,807
Provision for loss sharing (net of recoveries)		—		(3,272)		—		(3,272)
Provision for credit losses (net of recoveries)		(3,445)		(354)		—		(3,799)
Total other expenses		17,138		31,477		—		48,615
Income before income from equity affiliates and income taxes		48,917		41,966		—		90,883
Income from equity affiliates		5,086		—		—		5,086
Provision for income taxes		(622)		(9,283)		—		(9,905)
Net income		53,381		32,683		—		86,064
Preferred stock dividends		4,913		—		—		4,913
Net income attributable to noncontrolling interest		—		—		8,347		8,347
Net income attributable to common stockholders	$	48,468	$	32,683	$	(8,347)	$	72,804

	Three Months Ended September 30, 2020
	Structured		Agency		Other /
	Business		Business		Eliminations (1)		Consolidated
Interest income	$	75,471	$	6,230	$	—	$	81,701
Interest expense		35,252		2,636		—		37,888
Net interest income		40,219		3,594		—		43,813
Other revenue:
Gain on sales, including fee-based services, net		—		19,895		—		19,895
Mortgage servicing rights		—		42,357		—		42,357
Servicing revenue		—		25,764		—		25,764
Amortization of MSRs		—		(12,416)		—		(12,416)
Property operating income		1,033		—		—		1,033
Gain (loss) on derivative instruments, net		118		(871)		—		(753)
Other income, net		1,050		—		—		1,050
Total other revenue		2,201		74,729		—		76,930
Other expenses:
Employee compensation and benefits		8,873		24,089		—		32,962
Selling and administrative		4,665		4,691		—		9,356
Property operating expenses		1,300		—		—		1,300
Depreciation and amortization		598		1,324		—		1,922
Provision for loss sharing (net of recoveries)		—		(2,227)		—		(2,227)
Provision for credit losses (net of recoveries)		(6,065)		(1,521)		—		(7,586)
Total other expenses		9,371		26,356		—		35,727
Income before sale of real estate, income from equity affiliates and income taxes		33,049		51,967		—		85,016
Loss on sale of real estate		(1,868)		—		—		(1,868)
Income from equity affiliates		32,358		—		—		32,358
Provision for income taxes		(6,494)		(11,291)		—		(17,785)
Net income		57,045		40,676		—		97,721
Preferred stock dividends		1,888		—		—		1,888
Net income attributable to noncontrolling interest		—		—		13,836		13,836
Net income attributable to common stockholders	$	55,157	$	40,676	$	(13,836)	$	81,997

	Nine Months Ended September 30, 2021
	Structured		Agency		Other /
	Business		Business		Eliminations (1)		Consolidated
Interest income	$	294,418	$	27,354	$	—	$	321,772
Interest expense		131,795		12,327		—		144,122
Net interest income		162,623		15,027		—		177,650
Other revenue:
Gain on sales, including fee-based services, net		—		86,102		—		86,102
Mortgage servicing rights		—		95,688		—		95,688
Servicing revenue		—		94,683		—		94,683
Amortization of MSRs		—		(43,744)		—		(43,744)
Loss on derivative instruments, net		—		(7,320)		—		(7,320)
Other income, net		4,105		35		—		4,140
Total other revenue		4,105		225,444		—		229,549
Other expenses:
Employee compensation and benefits		37,566		91,081		—		128,647
Selling and administrative		15,477		18,230		—		33,707
Property operating expenses		421		—		—		421
Depreciation and amortization		1,832		3,517		—		5,349
Provision for loss sharing (net of recoveries)		—		(1,070)		—		(1,070)
Provision for credit losses (net of recoveries)		(12,807)		118		—		(12,689)
Total other expenses		42,489		111,876		—		154,365
Income before extinguishment of debt, sale of real estate income from equity affiliates and income taxes		124,239		128,595		—		252,834
Loss on extinguishment of debt		(1,370)		—		—		(1,370)
Gain on sale of real estate		—		1,228		—		1,228
Income from equity affiliates		32,095		—		—		32,095
Provision for income taxes		(6,288)		(27,068)		—		(33,356)
Net income		148,676		102,755		—		251,431
Preferred stock dividends		13,216		—		—		13,216
Net income attributable to noncontrolling interest		—		—		26,806		26,806
Net income attributable to common stockholders	$	135,460	$	102,755	$	(26,806)	$	211,409

	Nine Months Ended September 30, 2020
	Structured		Agency		Other /
	Business		Business		Eliminations (1)		Consolidated
Interest income	$	228,243	$	25,064	$	—	$	253,307
Interest expense		115,390		13,782		—		129,172
Net interest income		112,853		11,282		—		124,135
Other revenue:
Gain on sales, including fee-based services, net		—		60,566		—		60,566
Mortgage servicing rights		—		96,708		—		96,708
Servicing revenue		—		76,285		—		76,285
Amortization of MSRs		—		(36,129)		—		(36,129)
Property operating income		3,976		—		—		3,976
Loss on derivative instruments, net		(3,176)		(55,676)		—		(58,852)
Other income, net		3,347		57		—		3,404
Total other revenue		4,147		141,811		—		145,958
Other expenses:
Employee compensation and benefits		28,880		72,772		—		101,652
Selling and administrative		12,647		16,366		—		29,013
Property operating expenses		4,778		—		—		4,778
Depreciation and amortization		1,845		3,985		—		5,830
Provision for loss sharing (net of recoveries)		—		21,706		—		21,706
Provision for credit losses (net of recoveries)		58,383		1,127		—		59,510
Total other expenses		106,533		115,956		—		222,489
Income before extinguishment of debt, sale of real estate, income from equity affiliates and income taxes		10,467		37,137		—		47,604
Loss on extinguishment of debt		(3,546)		—		—		(3,546)
Loss on sale of real estate		(1,868)		—		—		(1,868)
Income from equity affiliates		56,758		—		—		56,758
Provision for income taxes		(9,337)		(6,156)		—		(15,493)
Net income		52,474		30,981		—		83,455
Preferred stock dividends		5,665		—		—		5,665
Net income attributable to noncontrolling interest		—		—		11,012		11,012
Net income attributable to common stockholders	$	46,809	$	30,981	$	(11,012)	$	66,778

(1) Includes income allocated to the noncontrolling interest holders not allocated to the two reportable segments.

	September 30, 2021
	Structured Business		Agency Business		Consolidated
Assets:
Cash and cash equivalents	$	162,870	$	217,860	$	380,730
Restricted cash		552,706		17,222		569,928
Loans and investments, net		8,993,790		—		8,993,790
Loans held-for-sale, net		—		1,274,234		1,274,234
Capitalized mortgage servicing rights, net		—		417,283		417,283
Securities held-to-maturity, net		—		112,735		112,735
Investments in equity affiliates		91,846		—		91,846
Goodwill and other intangible assets		12,500		89,433		101,933
Other assets		136,653		90,452		227,105
Total assets	$	9,950,365	$	2,219,219	$	12,169,584
Liabilities:
Debt obligations	$	8,515,801	$	1,102,485	$	9,618,286
Allowance for loss-sharing obligations		—		62,828		62,828
Other liabilities		225,088		127,975		353,063
Total liabilities	$	8,740,889	$	1,293,288	$	10,034,177

	December 31, 2020
Assets:
Cash and cash equivalents	$	172,568	$	166,960	$	339,528
Restricted cash		188,226		9,244		197,470
Loans and investments, net		5,285,868		—		5,285,868
Loans held-for-sale, net		—		986,919		986,919
Capitalized mortgage servicing rights, net		—		379,974		379,974
Securities held-to-maturity, net		—		95,524		95,524
Investments in equity affiliates		74,274		—		74,274
Goodwill and other intangible assets		12,500		92,951		105,451
Other assets		142,844		53,134		195,978
Total assets	$	5,876,280	$	1,784,706	$	7,660,986
Liabilities:
Debt obligations	$	4,872,626	$	952,038	$	5,824,664
Allowance for loss-sharing obligations		—		64,303		64,303
Other liabilities		203,554		85,780		289,334
Total liabilities	$	5,076,180	$	1,102,121	$	6,178,301

	Three Months Ended September 30,						Nine Months Ended September 30,
	2021			2020			2021			2020
Origination Data:
Structured Business
Bridge loans (1)	$	2,383,346		$	286,993		$	5,189,722		$	1,371,049
Mezzanine loans		62,657			1,000			156,914			16,722
Preferred equity investments		28,650			—			28,650			23,500
Other loans (2)		—			3,765			26,238			37,197
Total new loan originations	$	2,474,653		$	291,758		$	5,401,524		$	1,448,468
(1) The three and nine months ended September 30, 2021 includes 25 and 68 SFR loans with a UPB of $105.3 million and $219.5 million, respectively. During the three and nine months ended September 30, 2021, we committed to fund one and five SFR build-to-rent bridge loans totaling $17.6 million and $156.0 million, respectively.
(2) The nine months ended September 30, 2021 and 2020 includes 1 and 9 SFR permanent loans with a UPB of $26.2 million and $37.2 million, respectively.
Loan payoffs / paydowns	$	567,858		$	206,028		$	1,463,826		$	640,494
Agency Business
Origination Volumes by Investor:
Fannie Mae	$	719,730		$	1,117,679		$	2,421,206		$	2,839,833
Private Label		625,176			5,840			1,154,814			337,307
Freddie Mac		307,664			252,014			578,295			587,445
FHA		84,430			100,345			281,674			193,821
SFR - Fixed Rate		67,227			—			79,223			—
Total	$	1,804,227		$	1,475,878		$	4,515,212		$	3,958,406
Total loan commitment volume	$	1,856,474		$	1,528,551		$	4,510,953		$	4,002,492
Loan Sales Data:
Agency Business
Fannie Mae	$	660,693		$	1,038,053		$	2,820,558		$	2,856,020
Freddie Mac		238,880			116,628			647,827			468,019
FHA		78,188			64,781			308,193			118,218
SFR - Fixed Rate		29,197			—			104,491			—
Private Label		—			—			449,890			727,154
Total	$	1,006,958		$	1,219,462		$	4,330,959		$	4,169,411
Sales margin (fee-based services as a % of loan sales)		1.62	%		1.63	%		1.99	%		1.45	%
MSR rate (MSR income as a % of loan commitments)		1.75	%		2.77	%		2.12	%		2.42	%

	September 30, 2021
			Wtd. Avg. Servicing	Wtd. Avg. Life of
	UPB of Servicing		Fee Rate	Servicing Portfolio
Key Servicing Metrics for Agency Business:	Portfolio		(basis points)	(in years)
Fannie Mae	$	19,271,527	53.2	8.4
Freddie Mac		4,726,587	28.1	9.8
Private Label		1,176,391	20.0	8.8
FHA		933,519	15.6	21.4
SFR - Fixed Rate		104,094	20.0	5.7
Total	$	26,212,118	45.7	9.1

	December 31, 2020
Fannie Mae	$	18,268,268	52.3	8.2
Freddie Mac		4,881,080	27.9	9.9
FHA		752,116	16.3	20.3
Private Label		726,992	20.0	8.7
Total	$	24,628,456	45.4	8.9

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Basis of Presentation and Significant Accounting Policies (Policies)

9 Months Ended

Sep. 30, 2021

Basis of Presentation and Significant Accounting Policies

Basis of Presentation

Basis of Presentation

These consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States (“GAAP”), for interim financial statements and the instructions to Form 10-Q. Accordingly, certain information and footnote disclosures normally included in the consolidated financial statements prepared under GAAP have been condensed or omitted. In our opinion, all adjustments considered necessary for a fair presentation of our financial position, results of operations and cash flows have been included and are of a normal and recurring nature. The operating results presented for interim periods are not necessarily indicative of the results that may be expected for any other interim period or for the entire year. These financial statements should be read in conjunction with our financial statements and notes thereto included in our 2020 Annual Report.

Principles of Consolidation

Principles of Consolidation

These consolidated financial statements include our financial statements and the financial statements of our wholly owned subsidiaries, partnerships and other joint ventures in which we own a controlling interest, including variable interest entities (“VIEs”) of which we are the primary beneficiary. Entities in which we have a significant influence are accounted for under the equity method. Our VIEs are described in Note 14. All significant intercompany transactions and balances have been eliminated in consolidation.

Use of Estimates

Use of Estimates

The preparation of consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that could materially affect the amounts reported in the consolidated financial statements and accompanying notes. Actual results could differ from those estimates. Beginning early 2020, there has been a global outbreak of COVID-19, which had forced many countries, including the United States, to declare national emergencies, to institute “stay-at-home” orders, to close financial markets and to restrict operations of non-essential businesses. Such actions have created significant disruptions in global supply chains, and adversely impacted many industries. COVID-19 could have a continued and prolonged adverse impact on economic and market conditions, which could continue a period of global economic slowdown. The impact of COVID-19 on companies continues to evolve, and the extent and duration of the economic fallout from this pandemic, both globally and to our business, remain unclear, making any estimate or assumption as of September 30, 2021 inherently less certain than they would be absent the current and potential impacts of COVID-19.

Reclassification

Reclassification

Certain amounts in the prior period financial statements have been reclassified to conform to the presentation of the current period financial statements. Our real estate owned assets previously recorded to real estate owned, net on our consolidated balance sheets are now recorded to other assets for all periods presented.

Recently Adopted Accounting Pronouncements

Recently Adopted Accounting Pronouncements

Description	Adoption Date	Effect on Financial Statements
In December 2019, the Financial Accounting Standards Board (“FASB”) issued Accounting Standard Update (“ASU”) 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes, which removes certain exceptions to the general principles in Topic 740 and also clarifies and amends existing guidance to improve consistent application.	First quarter of 2021	The adoption of this guidance did not have a material impact on our consolidated financial statements.

Recently Issued Accounting Pronouncements

Description	Effective Date	Effect on Financial Statements
In August 2020, the FASB issued ASU 2020-06, Debt—Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging—Contracts in Entity’s Own Equity (Subtopic 815-40): Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity. This guidance reduces the number of accounting models for convertible debt instruments. Upon adoption of this guidance, convertible debt proceeds will no longer be allocated between debt and equity components, reducing the unamortized debt discount and lowering interest expense. This guidance also changes the method used to calculate diluted earnings per share when an instrument may be settled in cash or shares, if the effect is dilutive.	First quarter of 2022 with early adoption permitted beginning in the first quarter of 2021	We continue to evaluate the impact the adoption of this guidance will have on our consolidated financial statements and related disclosures. We expect to adopt this guidance on January 1, 2022. Upon adoption, we will reclassify the remaining equity component from equity to our convertible senior unsecured notes liability and cease the amortization of the debt discount through interest expense. The adoption of this guidance will also require us to change the method which we use to calculate diluted earnings per share to the if-converted method, potentially requiring us to add back interest expense to the numerator and make certain adjustments to the denominator.

Significant Accounting Policies

See Item 8 – Financial Statements and Supplementary Data in our 2020 Annual Report for a description of our significant accounting policies. There have been no significant changes to our significant accounting policies since December 31, 2020.

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Basis of Presentation and Significant Accounting Policies (Tables)

9 Months Ended

Sep. 30, 2021

Basis of Presentation and Significant Accounting Policies

Schedules of Recently Adopted Accounting Pronouncements and Recently Issued Accounting Pronouncements

Description	Adoption Date	Effect on Financial Statements
In December 2019, the Financial Accounting Standards Board (“FASB”) issued Accounting Standard Update (“ASU”) 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes, which removes certain exceptions to the general principles in Topic 740 and also clarifies and amends existing guidance to improve consistent application.	First quarter of 2021	The adoption of this guidance did not have a material impact on our consolidated financial statements.

Recently Issued Accounting Pronouncements

Description	Effective Date	Effect on Financial Statements
In August 2020, the FASB issued ASU 2020-06, Debt—Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging—Contracts in Entity’s Own Equity (Subtopic 815-40): Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity. This guidance reduces the number of accounting models for convertible debt instruments. Upon adoption of this guidance, convertible debt proceeds will no longer be allocated between debt and equity components, reducing the unamortized debt discount and lowering interest expense. This guidance also changes the method used to calculate diluted earnings per share when an instrument may be settled in cash or shares, if the effect is dilutive.	First quarter of 2022 with early adoption permitted beginning in the first quarter of 2021	We continue to evaluate the impact the adoption of this guidance will have on our consolidated financial statements and related disclosures. We expect to adopt this guidance on January 1, 2022. Upon adoption, we will reclassify the remaining equity component from equity to our convertible senior unsecured notes liability and cease the amortization of the debt discount through interest expense. The adoption of this guidance will also require us to change the method which we use to calculate diluted earnings per share to the if-converted method, potentially requiring us to add back interest expense to the numerator and make certain adjustments to the denominator.

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Loans and Investments (Tables)

9 Months Ended

Sep. 30, 2021

Loans and Investments

Schedule of Structured Business loan and investment portfolio

Our Structured Business loan and investment portfolio consists of ($ in thousands):

								Wtd. Avg.
								Remaining	Wtd. Avg.		Wtd. Avg.
			Percent of		Loan	Wtd. Avg.		Months to	First Dollar		Last Dollar
	September 30, 2021		Total		Count	Pay Rate (1)		Maturity	LTV Ratio (2)		LTV Ratio (3)
Bridge loans (4)	$	8,696,486	95	%	423	4.45	%	20.7	0	%	76	%
Mezzanine loans		256,413	3	%	38	6.83	%	53.5	30	%	82	%
Preferred equity investments		186,705	2	%	13	6.62	%	35.2	59	%	89	%
Other loans (5)		29,403	<1	%	2	4.63	%	51.1	0	%	69	%
		9,169,007	100	%	476	4.56	%	22.0	2	%	76	%
Allowance for credit losses		(131,534)
Unearned revenue		(43,683)
Loans and investments, net	$	8,993,790

	December 31, 2020
Bridge loans (4)	$	5,022,509	92	%	263	5.09	%	16.2	0	%	76	%
Mezzanine loans		159,242	3	%	29	7.40	%	45.0	32	%	82	%
Preferred equity investments		224,928	4	%	14	7.07	%	49.8	64	%	89	%
Other loans (5)		68,403	1	%	22	4.95	%	74.8	0	%	69	%
		5,475,082	100	%	328	5.23	%	19.2	4	%	77	%
Allowance for credit losses		(148,329)
Unearned revenue		(40,885)
Loans and investments, net	$	5,285,868

(1) “Weighted Average Pay Rate” is a weighted average, based on the unpaid principal balance (“UPB”) of each loan in our portfolio, of the interest rate required to be paid monthly as stated in the individual loan agreements. Certain loans and investments that require an additional rate of interest “accrual rate” to be paid at maturity are not included in the weighted average pay rate as shown in the table.

(2) The “First Dollar Loan-to-Value (“LTV”) Ratio” is calculated by comparing the total of our senior most dollar and all senior lien positions within the capital stack to the fair value of the underlying collateral to determine the point at which we will absorb a total loss of our position.

(3) The “Last Dollar LTV Ratio” is calculated by comparing the total of the carrying value of our loan and all senior lien positions within the capital stack to the fair value of the underlying collateral to determine the point at which we will initially absorb a loss.

(4) As of September 30, 2021 and December 31, 2020, bridge loans included 86 and 38, respectively, SFR loans with an aggregate UPB of $614.3 million and $309.2 million, respectively, of which $277.3 million and $88.1 million, respectively, was funded.

(5) As of September 30, 2021, other loans included 2 variable rate SFR permanent loans and as of December 31, 2020, other loans included 22 SFR permanent loans.

Summary of the loan portfolio's internal risk ratings and LTV ratios by asset class

A summary of the loan portfolio’s internal risk ratings and LTV ratios by asset class as of September 30, 2021 is as follows ($ in thousands):

																Wtd. Avg.		Wtd. Avg.
	UPB by Origination Year															First Dollar		Last Dollar
Asset Class / Risk Rating	2021		2020		2019		2018		2017		Prior		Total			LTV Ratio		LTV Ratio
Multifamily:
Pass	$	3,167,965	$	350,623	$	185,265	$	—	$	20,300	$	276	$	3,724,429
Pass/Watch		1,458,271		1,077,411		256,877		127,255		32,500		28,800		2,981,114
Special Mention		180,723		415,519		617,506		63,233		—		350		1,277,331
Substandard		—		14,340		89,330		11,400		31,117		8,250		154,437
Doubtful		—		—		—		—		17,700		—		17,700
Total Multifamily	$	4,806,959	$	1,857,893	$	1,148,978	$	201,888	$	101,617	$	37,676	$	8,155,011		2	%	76	%
Single-Family Rental:												Percentage of portfolio		89	%
Pass	$	30,777	$	3,165	$	44,181	$	—	$	—	$	—	$	78,123
Pass/Watch		169,677		26,813		—		—		—		—		196,490
Special Mention		3,340		28,722		—		—		—		—		32,062
Total Single-Family Rental	$	203,794	$	58,700	$	44,181	$	—	$	—	$	—	$	306,675		0	%	63	%
Land:												Percentage of portfolio		3	%
Special Mention	$	—	$	8,100	$	—	$	—	$	—	$	—	$	8,100
Substandard		—		71,018		19,524		—		19,975		127,928		238,445
Total Land	$	—	$	79,118	$	19,524	$	—	$	19,975	$	127,928	$	246,545		0	%	95	%
Healthcare:												Percentage of portfolio		3	%
Pass/Watch	$	—	$	—	$	—	$	26,850	$	—	$	—	$	26,850
Special Mention		—		—		65,819		14,650		39,650		—		120,119
Total Healthcare	$	—	$	—	$	65,819	$	41,500	$	39,650	$	—	$	146,969		0	%	79	%
Office:												Percentage of portfolio		2	%
Special Mention	$	—	$	35,410	$	—	$	42,799	$	43,151	$	2,096	$	123,456
Doubtful		—		—		—		—		—		880		880
Total Office	$	—	$	35,410	$	—	$	42,799	$	43,151	$	2,976	$	124,336		0	%	83	%
Student Housing:												Percentage of portfolio		1	%
Pass	$	25,700	$	—	$	—	$	—	$	—	$	—	$	25,700
Special Mention		—		—		31,100		—		—		—		31,100
Substandard		—		23,500		—		13,000		—		—		36,500
Total Student Housing	$	25,700	$	23,500	$	31,100	$	13,000	$	—	$	—	$	93,300		19	%	71	%
Hotel:												Percentage of portfolio		1	%
Pass/Watch	$	—	$	5,846	$	—	$	—	$	—	$	—	$	5,846
Special Mention		—		—		41,000		—		—		—		41,000
Total Hotel	$	—	$	5,846	$	41,000	$	—	$	—	$	—	$	46,846		0	%	75	%
Retail:												Percentage of portfolio		1	%
Pass	$	—	$	—	$	4,000	$	—	$	—	$	—	$	4,000
Special Mention		—		—		—		26,600		—		—		26,600
Substandard		—		—		—		—		—		3,445		3,445
Total Retail	$	—	$	—	$	4,000	$	26,600	$	—	$	3,445	$	34,045		9	%	72	%
Other:												Percentage of portfolio		< 1	%
Pass/Watch	$	—	$	—	$	—	$	—	$	13,580	$	—	$	13,580
Doubtful		—		—		—		—		—		1,700		1,700
Total Other	$	—	$	—	$	—	$	—	$	13,580	$	1,700	$	15,280		7	%	51	%
												Percentage of portfolio		< 1	%
Grand Total	$	5,036,453	$	2,060,467	$	1,354,602	$	325,787	$	217,973	$	173,725	$	9,169,007		2	%	76	%

Summary of the changes in the allowance for credit losses for our loan portfolio

A summary of the changes in the allowance for credit losses is as follows (in thousands):

	Three Months Ended September 30, 2021
	Land		Multifamily		Retail		Office		Student Housing		Hotel		Healthcare		Other		Total
Allowance for credit losses:
Beginning balance	$	78,057	$	30,160	$	13,819	$	7,822	$	2,365	$	225	$	3,866	$	2,133	$	138,447
Provision for credit losses (net of recoveries)		(45)		(2,093)		—		(95)		(542)		(209)		(3,851)		(78)		(6,913)
Ending balance	$	78,012	$	28,067	$	13,819	$	7,727	$	1,823	$	16	$	15	$	2,055	$	131,534

	Three Months Ended September 30, 2020
Allowance for credit losses:
Beginning balance	$	78,094	$	34,606	$	13,981	$	8,532	$	4,110	$	7,672	$	3,930	$	1,886	$	152,811
Provision for credit losses (net of recoveries)		(84)		103		(40)		(6,589)		675		(133)		(21)		23		(6,066)
Ending balance	$	78,010	$	34,709	$	13,941	$	1,943	$	4,785	$	7,539	$	3,909	$	1,909	$	146,745

	Nine Months Ended September 30, 2021
Allowance for credit losses:
Beginning balance	$	78,150	$	36,468	$	13,861	$	1,846	$	4,078	$	7,759	$	3,880	$	2,287	$	148,329
Provision for credit losses (net of recoveries)		(138)		(8,401)		(42)		5,881		(2,255)		(7,743)		(3,865)		(232)		(16,795)
Ending balance	$	78,012	$	28,067	$	13,819	$	7,727	$	1,823	$	16	$	15	$	2,055	$	131,534

	Nine Months Ended September 30, 2020
Allowance for credit losses:
Beginning balance, prior to adoption of CECL	$	67,869	$	—	$	—	$	1,500	$	—	$	—	$	—	$	1,700	$	71,069
Impact of adopting CECL - January 1, 2020		77		16,322		335		287		68		29		64		112		17,294
Provision for credit losses (net of recoveries)		10,064		18,387		13,606		156		4,717		7,510		3,845		97		58,382
Ending balance	$	78,010	$	34,709	$	13,941	$	1,943	$	4,785	$	7,539	$	3,909	$	1,909	$	146,745

Summary of our loans considered impaired by asset class

	September 30, 2021
							Wtd. Avg. First		Wtd. Avg. Last
			Carrying		Allowance for		Dollar LTV		Dollar LTV
Asset Class	UPB (1)		Value		Credit Losses		Ratio		Ratio
Land	$	134,215	$	127,868	$	77,868	0	%	99	%
Retail		30,045		29,348		13,818	10	%	77	%
Office		2,096		2,096		1,500	0	%	64	%
Commercial		1,700		1,700		1,700	63	%	63	%
Total	$	168,056	$	161,012	$	94,886	2	%	94	%

	December 31, 2020
Land	$	134,215	$	127,829	$	77,869	0	%	99	%
Hotel		110,000		89,613		7,500	0	%	94	%
Retail		30,079		28,957		13,851	10	%	75	%
Healthcare		4,625		4,673		3,845	0	%	83	%
Office		2,166		2,166		1,500	0	%	71	%
Commercial		1,700		1,700		1,700	63	%	63	%
Total	$	282,785	$	254,938	$	106,265	1	%	94	%

(1) Represents the UPB of eight and ten impaired loans (less unearned revenue and other holdbacks and adjustments) by asset class at September 30, 2021 and December 31, 2020, respectively.

Summary of our non-performing loans by asset class

A summary of our non-performing loans by asset class is as follows (in thousands):

	September 30, 2021						December 31, 2020
			Less Than		Greater Than				Less Than		Greater Than
			90 Days		90 Days				90 Days		90 Days
	UPB		Past Due		Past Due		UPB		Past Due		Past Due
Student Housing	$	36,500	$	—	$	36,500	$	36,500	$	—	$	36,500
Multifamily		17,700		—		17,700		17,700		—		17,700
Commercial		1,700		—		1,700		1,700		—		1,700
Retail		920		—		920		920		—		920
Office		880		—		880		880		—		880
Healthcare		—		—		—		4,625		—		4,625
Total	$	57,700	$	—	$	57,700	$	62,325	$	—	$	62,325

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Loans Held-for-Sale, Net (Tables)

9 Months Ended

Sep. 30, 2021

Loans Held-for-Sale, Net

Summary of loans held-for-sale, net

	September 30, 2021		December 31, 2020
Private Label	$	761,098	$	56,186
Fannie Mae		279,981		679,342
Freddie Mac		108,589		180,004
FHA		70,113		53,063
SFR - Fixed Rate		39,506		—
		1,259,287		968,595
Fair value of future MSR		19,151		21,600
Unearned discount		(4,204)		(3,276)
Loans held-for-sale, net	$	1,274,234	$	986,919

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Capitalized Mortgage Servicing Rights (Tables)

9 Months Ended

Sep. 30, 2021

Capitalized Mortgage Servicing Rights

Summary of capitalized MSR activity

A summary of our capitalized MSR activity is as follows (in thousands):

	Three Months Ended September 30, 2021						Nine Months Ended September 30, 2021
	Originated		Acquired		Total		Originated		Acquired		Total
Beginning balance	$	383,063	$	35,590	$	418,653	$	336,466	$	43,508	$	379,974
Additions		22,387		—		22,387		99,397		—		99,397
Amortization		(12,345)		(2,527)		(14,872)		(35,221)		(8,523)		(43,744)
Write-downs and payoffs		(7,420)		(1,465)		(8,885)		(14,957)		(3,387)		(18,344)
Ending balance	$	385,685	$	31,598	$	417,283	$	385,685	$	31,598	$	417,283

	Three Months Ended September 30, 2020						Nine Months Ended September 30, 2020
Beginning balance	$	260,452	$	52,836	$	313,288	$	221,901	$	64,519	$	286,420
Additions		37,403		—		37,403		97,554		—		97,554
Amortization		(8,811)		(3,605)		(12,416)		(24,425)		(11,704)		(36,129)
Write-downs and payoffs		(2,081)		(959)		(3,040)		(8,067)		(4,543)		(12,610)
Ending balance	$	286,963	$	48,272	$	335,235	$	286,963	$	48,272	$	335,235

Schedule of expected amortization of capitalized MSRs recorded

The expected amortization of capitalized MSRs recorded as of September 30, 2021 is as follows (in thousands):

Year	Amortization
2021 (three months ending 12/31/2021)	$	14,991
2022		57,963
2023		54,522
2024		51,072
2025		48,251
2026		44,235
Thereafter		146,249
Total	$	417,283

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Mortgage Servicing (Tables)

9 Months Ended

Sep. 30, 2021

MSRs

Product and geographic concentrations

Schedule of product and geographic concentrations in servicing revenue

Product and geographic concentrations that impact our servicing revenue are as follows ($ in thousands):

September 30, 2021
Product Concentrations					Geographic Concentrations
						UPB
			Percent of			Percentage
Product	UPB (1)		Total		State	of Total
Fannie Mae	$	19,271,527	74	%	Texas	14	%
Freddie Mac		4,726,587	18	%	New York	10	%
Private Label		1,176,391	4	%	North Carolina	9	%
FHA		933,519	4	%	California	9	%
SFR - Fixed Rate		104,094	<1	%	Georgia	6	%
Total	$	26,212,118	100	%	Florida	6	%
					New Jersey	5	%
					Other (2)	41	%
					Total	100	%

December 31, 2020
Fannie Mae	$	18,268,268	74	%	Texas	16	%
Freddie Mac		4,881,080	20	%	New York	9	%
FHA		752,116	3	%	North Carolina	9	%
Private Label		726,992	3	%	California	9	%
Total	$	24,628,456	100	%	Florida	7	%
					Georgia	6	%
					New Jersey	4	%
					Other (2)	40	%
					Total	100	%

(1) Excludes loans which we are not collecting a servicing fee.

(2) No other individual state represented 4% or more of the total.

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Securities Held-to-Maturity (Tables)

9 Months Ended

Sep. 30, 2021

Securities Held-to-Maturity

Schedule of securities held-to-maturity

A summary of our securities held-to-maturity is as follows (in thousands):

			Net Carrying		Unrealized		Estimated		Allowance for
	Face Value		Value		Gain/(Loss)		Fair Value		Credit Losses
September 30, 2021
APL certificates	$	101,868	$	62,412	$	5,575	$	67,987	$	1,315
B Piece bonds		65,137		50,323		3,821		54,144		446
Total	$	167,005	$	112,735	$	9,396	$	122,131	$	1,761
December 31, 2020
APL certificates	$	63,627	$	37,685	$	(2,105)	$	35,580	$	1,023
B Piece bonds		76,497		57,839		709		58,548		621
Total	$	140,124	$	95,524	$	(1,396)	$	94,128	$	1,644

Schedule of changes in the allowance for credit losses

A summary of the changes in the allowance for credit losses for our securities held-to-maturity is as follows (in thousands):

	Three Months Ended September 30, 2021
	APL		B Piece
	Certificates		Bonds		Total
Beginning balance	$	1,568	$	547	$	2,115
Provision for credit loss expense/(reversal)		(253)		(101)		(354)
Ending balance	$	1,315	$	446	$	1,761

	Nine Months Ended September 30, 2021
Beginning balance	$	1,023	$	621	$	1,644
Provision for credit loss expense/(reversal)		292		(175)		117
Ending balance	$	1,315	$	446	$	1,761

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Investments in Equity Affiliates (Tables)

9 Months Ended

Sep. 30, 2021

Investments in Equity Affiliates

Summary of the company's investments in equity affiliates

We account for all investments in equity affiliates under the equity method. A summary of these investments is as follows (in thousands):

					UPB of Loans to
	Investments in Equity Affiliates at				Equity Affiliates at
Equity Affiliates	September 30, 2021		December 31, 2020		September 30, 2021
Arbor Residential Investor LLC	$	68,473	$	59,150	$	—
AMAC Holdings III LLC		12,223		10,308		—
Tapestry on the River		3,410		—		—
Emerson at Forney		3,000		—		—
North Vermont Avenue		2,420		2,496		—
Lightstone Value Plus REIT L.P.		1,895		1,895		—
JT Prime		425		425		—
West Shore Café		—		—		1,687
Lexford Portfolio		—		—		—
East River Portfolio		—		—		—
Total	$	91,846	$	74,274	$	1,687

Summary of statements of income for the Company's investment in residential mortgage banking business

Summarized statements of income for Wakefield Investment Holdings LLC, the third-party entity formed to hold the underlying residential mortgage banking business, are as follows (in thousands):

	Nine Months Ended September 30,
	2021		2020
Statements of Income:
Total revenues	$	935,444	$	1,171,796
Total expenses		722,882		790,454
Net income	$	212,562	$	381,342

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Debt Obligations (Tables)

9 Months Ended

Sep. 30, 2021

Debt Obligations

Schedule of senior unsecured notes

A summary of our senior unsecured notes is as follows (in thousands):

Senior			September 30, 2021						December 31, 2020
Unsecured	Issuance				Carrying		Wtd. Avg.				Carrying		Wtd. Avg.
Notes	Date	Maturity	UPB		Value (1)		Rate (2)		UPB		Value (1)		Rate (2)
4.50% Notes (3)	Aug. 2021	Sept. 2026	$	270,000	$	265,938	4.50	%	$	—	$	—	—	%
5.00% Notes (3)	Apr. 2021	Apr. 2026		175,000		172,148	5.00	%		—		—	—	%
8.00% Notes (3)	Apr. 2020	Apr. 2023		70,750		70,099	8.00	%		70,750		69,793	8.00	%
4.50% Notes (3)	Mar. 2020	Mar. 2027		275,000		272,356	4.50	%		275,000		271,994	4.50	%
4.75% Notes (4)	Oct. 2019	Oct. 2024		110,000		108,930	4.75	%		110,000		108,668	4.75	%
5.75% Notes (4)	Mar. 2019	Apr. 2024		90,000		89,038	5.75	%		90,000		88,751	5.75	%
5.625% Notes (4)	Mar. 2018	May 2023		125,000		124,069	5.63	%		125,000		123,637	5.63	%
			$	1,115,750	$	1,102,578	5.05	%	$	670,750	$	662,843	5.29	%

(1) At September 30, 2021 and December 31, 2020, the carrying value is net of deferred financing fees of $13.2 million and $7.9 million, respectively.

(2) At September 30, 2021 and December 31, 2020, the aggregate weighted average note rate, including certain fees and costs, was 5.36% and 5.65%, respectively.

(3) These notes can be redeemed by us prior to three months before the maturity date, at a redemption price equal to 100% of the aggregate principal amount, plus a “make-whole” premium and accrued and unpaid interest. We have the right to redeem the notes three months prior to or after the maturity date, at a redemption price equal to 100% of the aggregate principal amount, plus accrued and unpaid interest.

(4) These notes can be redeemed by us at any time prior to the maturity date, at a redemption price equal to 100% of the aggregate principal amount, plus a “make-whole” premium and accrued and unpaid interest. We have the right to redeem the notes on or after the maturity date, at a redemption price equal to 100% of the aggregate principal amount, plus accrued and unpaid interest.

Schedule of face value, unamortized discount and net carrying value of the liability and equity components

The UPB, unamortized discount and net carrying amount of the liability and equity components of our convertible notes are as follows (in thousands):

	Liability								Equity
	Component								Component
			Unamortized Debt		Unamortized Deferred		Net Carrying		Net Carrying
Period	UPB		Discount		Financing Fees		Value		Value
September 30, 2021	$	264,000	$	3,275	$	2,724	$	258,001	$	9,962
December 31, 2020	$	278,300	$	5,636	$	4,691	$	267,973	$	9,962

Credit and Repurchase Facilities

Debt Obligations

Schedule of borrowings

Borrowings under our credit and repurchase facilities are as follows ($ in thousands):

				September 30, 2021							December 31, 2020
			Note	Debt		Collateral					Debt		Collateral
	Current	Extended	Rate	Carrying		Carrying		Wtd. Avg.			Carrying		Carrying
	Maturity	Maturity	Type	Value (1)		Value		Note Rate			Value (1)		Value
Structured Business
$1.25B joint repurchase facility	Mar. 2022	Mar. 2023	V	$	1,068,118	$	1,449,400		2.32	%	$	681,006	$	1,054,562
$725M repurchase facility	Sept. 2022	Sept. 2023	V		343,511		484,880		2.08	%		191,622		259,559
$450M repurchase facility	Mar. 2023	Mar. 2026	V		211,118		270,396		1.97	%		—		—
$225M credit facility	Oct. 2022	Oct. 2023	V		14,403		21,755		3.90	%		23,606		31,809
$200M credit facility	July 2022	N/A	V		146,878		197,468		2.14	%		39,346		47,912
$200M repurchase facility	Oct. 2023	Oct 2024	V		110,592		148,021		1.86	%		31,780		40,551
$198.7M repurchase facility (2)	Dec. 2021	N/A	V		167,106		197,804		3.04	%		71,627		87,242
$164.4M loan specific credit facilities	Dec. 2021 to Jan. 2024	N/A	V/F		164,232		218,950		3.01	%		148,615		198,550
$100M credit facility	Oct. 2022	N/A	V		3,246		4,878		4.06	%		—		—
$50M credit facility	April 2022	N/A	V		22,407		28,485		2.11	%		15,992		21,300
$30M working capital facility	Nov. 2021	N/A	V		—		—		—			30,000		—
$25M credit facility	June 2022	June 2023	V		12,623		18,296		2.36	%		9,323		14,340
$1M master security agreements	Dec. 2022	N/A	F		790		—		4.01	%		1,441		—
Repurchase facilities - securities (3)	N/A	N/A	V		32,201		—		3.38	%		38,487		—
Structured Business total				$	2,297,225	$	3,040,333		2.35	%	$	1,282,845	$	1,755,825
Agency Business
$750M ASAP agreement	N/A	N/A	V	$	176,261	$	176,264		1.40	%	$	301,455	$	302,491
$750M joint repurchase facility	Mar. 2022	N/A	V		642,652		761,098		2.06	%		42,808		56,186
$400M repurchase facility (4)	Oct. 2021	N/A	V		169,406		169,409		1.58	%		174,515		174,555
$200M credit facility	Mar. 2022	N/A	V		108,533		108,635		1.60	%		294,732		296,698
$150M credit facility	Nov. 2021	N/A	V		3,100		3,100		1.43	%		49,632		49,754
$50M credit facility	Sept. 2022	N/A	V		1,275		1,275		1.38	%		88,896		88,911
$1.3M repurchase facility (2)	Dec. 2021	N/A	V		1,259		1,481		3.00	%		—		—
Agency Business total				$	1,102,486	$	1,221,262		1.83	%	$	952,038	$	968,595
Consolidated total				$	3,399,711	$	4,261,595		2.18	%	$	2,234,883	$	2,724,420

V = Variable Note Rate; F = Fixed Note Rate

(1) The debt carrying value for the Structured Business at September 30, 2021 and December 31, 2020 was net of unamortized deferred finance costs of $3.9 million and $3.3 million, respectively. The debt carrying value for the Agency Business at September 30, 2021 and December 31, 2020 was net of unamortized deferred finance costs of $1.6 million and $0.6 million, respectively.

(2) A portion of this repurchase facility was used to finance a fixed rate SFR permanent loan reported through our Agency Business.

(3) These repurchase facilities are subject to margin call provisions associated with changes in interest spreads. As of September 30, 2021 and December 31, 2020, these facilities were collateralized by our B Piece bonds with a carrying value of $50.3 million and $58.5 million, respectively, and an SFR bond with a carrying value of $10.0 million at December 31, 2020.

(4) We are currently in negotiations with the lender to amend this facility.

CLOs

Debt Obligations

Schedule of borrowings

Borrowings and the corresponding collateral under our CLOs are as follows ($ in thousands):

	Debt						Collateral (3)
							Loans				Cash
			Carrying		Wtd. Avg.				Carrying		Restricted
September 30, 2021	Face Value		Value (1)		Rate (2)		UPB		Value		Cash (4)
CLO 16	$	1,237,500	$	1,229,631	1.41	%	$	1,147,056	$	1,140,662	$	312,984
CLO 15		674,412		669,272	1.47	%		796,612		792,770		—
CLO 14		655,475		650,531	1.43	%		724,633		722,221		42,341
CLO 13		668,000		664,700	1.52	%		767,167		765,158		26,182
CLO 12		534,193		531,616	1.60	%		601,231		599,879		25,764
CLO 11		533,000		530,785	1.54	%		592,829		591,484		53,347
CLO 10		441,000		439,269	1.55	%		508,598		507,346		39,511
Total CLOs	$	4,743,580	$	4,715,804	1.49	%	$	5,138,126	$	5,119,520	$	500,129

December 31, 2020
CLO 13	$	668,000	$	663,804	1.58	%	$	768,664	$	768,664	$	43
CLO 12		534,193		530,673	1.66	%		628,935		628,935		2,005
CLO 11		533,000		529,859	1.61	%		555,157		555,157		92,395
CLO 10		441,000		438,442	1.61	%		522,132		522,132		25,537
CLO 9		356,150		354,531	1.53	%		457,903		457,903		18,703
Total CLOs	$	2,532,343	$	2,517,309	1.60	%	$	2,932,791	$	2,932,791	$	138,683

(1) Debt carrying value is net of $27.8 million and $15.0 million of deferred financing fees at September 30, 2021 and December 31, 2020, respectively.

(2) At September 30, 2021 and December 31, 2020, the aggregate weighted average note rate for our CLOs, including certain fees and costs, was 1.79% and 1.93%, respectively.

(3) As of September 30, 2021 and December 31, 2020, there were no collateral deemed a “credit risk” as defined by the CLO indentures.

(4) Represents restricted cash held for principal repayments as well as for reinvestment in the CLOs. Does not include restricted cash related to interest payments, delayed fundings and expenses totaling $52.6 million and $49.5 million at September 30, 2021 and December 31, 2020, respectively.

Schedule of company's CLO compliance tests as of the most recent determination dates

Our CLO compliance tests as of the most recent determination dates in October 2021 are as follows:

Cash Flow Triggers	CLO 10		CLO 11		CLO 12		CLO 13		CLO 14		CLO 15		CLO 16
Overcollateralization (1)
Current	126.98	%	121.95	%	118.87	%	119.76	%	119.76	%	120.85	%	121.21	%
Limit	125.98	%	120.95	%	117.87	%	118.76	%	118.76	%	119.85	%	120.21	%
Pass / Fail	Pass		Pass		Pass		Pass		Pass		Pass		Pass
Interest Coverage (2)
Current	350.15	%	400.85	%	302.20	%	391.59	%	368.75	%	334.86	%	472.24	%
Limit	120.00	%	120.00	%	120.00	%	120.00	%	120.00	%	120.00	%	120.00	%
Pass / Fail	Pass		Pass		Pass		Pass		Pass		Pass		Pass

(1) The overcollateralization ratio divides the total principal balance of all collateral in the CLO by the total principal balance of the bonds associated with the applicable ratio. To the extent an asset is considered a defaulted security, the asset’s principal balance for purposes of the overcollateralization test is the lesser of the asset’s market value or the principal balance of the defaulted asset multiplied by the asset’s recovery rate which is determined by the rating agencies. Rating downgrades of CLO collateral will generally not have a direct impact on the principal balance of a CLO asset for purposes of calculating the CLO overcollateralization test unless the rating downgrade is below a significantly low threshold (e.g. CCC-) as defined in each CLO vehicle.

(2) The interest coverage ratio divides interest income by interest expense for the classes senior to those retained by us.

Schedule of company's CLO overcollateralization ratios

Determination (1)	CLO 10		CLO 11		CLO 12		CLO 13		CLO 14		CLO 15		CLO 16
October 2021	126.98	%	121.95	%	118.87	%	119.76	%	119.76	%	120.85	%	121.21	%
July 2021	126.98	%	121.95	%	118.87	%	119.76	%	119.76	%	120.85	%	—
April 2021	126.98	%	121.95	%	118.87	%	119.76	%	119.76	%	—		—
January 2021	126.98	%	121.95	%	118.87	%	119.76	%	—		—		—
October 2020	126.98	%	121.95	%	118.87	%	119.76	%	—		—		—

(1) This table represents the quarterly trend of our overcollateralization ratio, however, the CLO determination dates are monthly and we were in compliance with this test for all periods presented.

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Allowance for Loss-Sharing Obligations (Tables)

9 Months Ended

Sep. 30, 2021

Allowance for Loss-Sharing Obligations

Schedule of allowance for loss-sharing obligations related to Fannie Mae DUS program

Our allowance for loss-sharing obligations related to the Fannie Mae DUS program is as follows (in thousands):

	Three Months Ended September 30,				Nine Months Ended September 30,
	2021		2020		2021		2020
Beginning balance	$	65,645	$	73,220	$	64,303	$	34,648
Impact of adopting CECL - January 1, 2020		—		—		—		14,406
Provisions for loss sharing		(3,022)		(2,031)		(557)		22,538
Provisions reversal for loan repayments		(250)		(196)		(513)		(832)
Recoveries (charge-offs), net		455		167		(405)		400
Ending balance	$	62,828	$	71,160	$	62,828	$	71,160

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Derivative Financial Instruments (Tables)

9 Months Ended

Sep. 30, 2021

Agency Business

Derivatives, Fair Value [Line Items]

Schedule of non-qualifying derivative financial instruments

A summary of our non-qualifying derivative financial instruments is as follows ($ in thousands):

	September 30, 2021
					Fair Value
		Notional		Balance Sheet	Derivative		Derivative
Derivative	Count	Value		Location	Assets		Liabilities
Agency Business
Rate Lock Commitments	12	$	68,797	Other Assets/Other Liabilities	$	707	$	(1,369)
Forward Sale Commitments	45		527,480	Other Assets/Other Liabilities		1,489		(6,884)
Swaps	1,945		194,500			—		—
		$	790,777		$	2,196	$	(8,253)

	December 31, 2020
Agency Business
Rate Lock Commitments	7	$	136,354	Other Assets/Other Liabilities	$	1,967	$	(231)
Forward Sale Commitments	114		1,048,763	Other Assets/Other Liabilities		1,925		(990)
Swaps	453		45,300			—		—
		$	1,230,417		$	3,892	$	(1,221)

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Fair Value (Tables)

9 Months Ended

Sep. 30, 2021

Fair Value

Schedule of the principal amounts, carrying values and the estimated fair values of the Company's financial instruments

	September 30, 2021						December 31, 2020
	Principal /		Carrying		Estimated		Principal /		Carrying		Estimated
	Notional Amount		Value		Fair Value		Notional Amount		Value		Fair Value
Financial assets:
Loans and investments, net	$	9,169,007	$	8,993,790	$	9,202,924	$	5,475,082	$	5,285,868	$	5,428,141
Loans held-for-sale, net		1,259,287		1,274,234		1,309,556		968,595		986,919		1,007,294
Capitalized mortgage servicing rights, net		n/a		417,283		473,679		n/a		379,974		415,495
Securities held-to-maturity, net		167,005		112,735		122,131		140,124		95,524		94,128
Derivative financial instruments		77,242		2,196		2,196		865,975		3,892		3,892
Financial liabilities:
Credit and repurchase facilities	$	3,405,232	$	3,399,711	$	3,399,579	$	2,238,722	$	2,234,883	$	2,235,668
Collateralized loan obligations		4,743,580		4,715,804		4,744,351		2,532,343		2,517,309		2,495,195
Senior unsecured notes		1,115,750		1,102,578		1,134,816		670,750		662,843		670,117
Convertible senior unsecured notes, net		264,000		258,001		296,472		278,300		267,973		280,636
Junior subordinated notes		154,336		142,192		101,169		154,336		141,656		99,594
Derivative financial instruments		519,035		8,253		8,253		319,142		1,221		1,221

Schedule of certain financial assets and financial liabilities measured at fair value on a recurring basis

					Fair Value Measurements Using Fair
	Carrying				Value Hierarchy
	Value		Fair Value		Level 1		Level 2		Level 3
Financial assets:
Derivative financial instruments	$	2,196	$	2,196	$	—	$	1,489	$	707
Financial liabilities:
Derivative financial instruments	$	8,253	$	8,253	$	—	$	8,253	$	—

Schedule of certain financial assets and financial liabilities measured at fair value on a nonrecurring basis

					Fair Value Measurements Using Fair
	Net Carrying				Value Hierarchy
	Value		Fair Value		Level 1		Level 2		Level 3
Financial assets:
Impaired loans, net (1)	$	66,126	$	66,126	$	—	$	—	$	66,126

(1) We had an allowance for credit losses of $94.9 million relating to eight impaired loans with an aggregate carrying value, before loan loss reserves, of $161.0 million at September 30, 2021.

Schedule of quantitative information about Level 3 fair value measurements

Quantitative information about Level 3 fair value measurements at September 30, 2021 is as follows ($ in thousands):

			Valuation
	Fair Value		Techniques	Significant Unobservable Inputs
Financial assets:
Impaired loans:
Land	$	50,000	Discounted cash flows	Discount rate	21.50	%
				Revenue growth rate	3.00	%
				Discount rate	10.15	%
Retail		15,530	Discounted cash flows	Capitalization rate	9.25	%
				Revenue growth rate	1.68	%
				Discount rate	11.00	%
Office		596	Discounted cash flows	Capitalization rate	9.00	%
				Revenue growth rate	2.50	%
Derivative financial instruments:
Rate lock commitments		707	Discounted cash flows	W/A discount rate	9.56	%

Schedule of roll forward of Level 3 derivative instruments

	Fair Value Measurements Using				Fair Value Measurements Using
	Significant Unobservable Inputs				Significant Unobservable Inputs
	Three Months Ended September 30,				Nine Months Ended September 30,
	2021		2020		2021		2020
Derivative assets and liabilities, net
Beginning balance	$	124	$	549	$	1,967	$	1,066
Settlements		(23,412)		(40,746)		(81,486)		(95,614)
Realized gains recorded in earnings		23,288		40,197		79,519		94,548
Unrealized gains recorded in earnings		707		2,160		707		2,160
Ending balance	$	707	$	2,160	$	707	$	2,160

Schedule of components of fair value and other relevant information

The components of fair value and other relevant information associated with our rate lock commitments, forward sales commitments and the estimated fair value of cash flows from servicing on loans held-for-sale are as follows (in thousands):

	Notional/		Fair Value of		Interest Rate		Total Fair Value
September 30, 2021	Principal Amount		Servicing Rights		Movement Effect		Adjustment
Rate lock commitments	$	68,797	$	707	$	(1,369)	$	(662)
Forward sale commitments		527,480		—		1,369		1,369
Loans held-for-sale, net (1)		1,259,287		19,151		—		19,151
Total			$	19,858	$	—	$	19,858

(1) Loans held-for-sale, net are recorded at the lower of cost or market on an aggregate basis and includes fair value adjustments related to estimated cash flows from MSRs.

Schedule of fair value of assets and liabilities

					Fair Value Measurements Using Fair Value Hierarchy
	Carrying Value		Fair Value		Level 1		Level 2		Level 3
Financial assets:
Loans and investments, net	$	8,993,790	$	9,202,924	$	—	$	—	$	9,202,924
Loans held-for-sale, net		1,274,234		1,309,556		—		1,290,405		19,151
Capitalized mortgage servicing rights, net		417,283		473,679		—		—		473,679
Securities held-to-maturity, net		112,735		122,131		—		—		122,131
Financial liabilities:
Credit and repurchase facilities	$	3,399,711	$	3,399,579	$	—	$	1,102,486	$	2,297,093
Collateralized loan obligations		4,715,804		4,744,351		—		—		4,744,351
Senior unsecured notes		1,102,578		1,134,816		1,134,816		—		—
Convertible senior unsecured notes, net		258,001		296,472		—		296,472		—
Junior subordinated notes		142,192		101,169		—		—		101,169

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Commitments and Contingencies (Tables)

9 Months Ended

Sep. 30, 2021

Commitments and Contingencies

Schedule of maturities of operating lease liabilities

Debt Obligations and Operating Leases. As of September 30, 2021, the maturities of our debt obligations and the minimum annual operating lease payments under leases with a term in excess of one year are as follows (in thousands):

			Minimum Annual
	Debt		Operating Lease
Year	Obligations		Payments		Total
2021 (three months ending December 31, 2021)	$	1,426,798	$	2,127	$	1,428,925
2022		2,991,831		8,257		3,000,088
2023		1,652,679		8,031		1,660,710
2024		1,178,993		7,926		1,186,919
2025		497,701		7,978		505,679
2026		1,473,359		8,282		1,481,641
Thereafter		461,537		26,098		487,635
Total	$	9,682,898	$	68,699	$	9,751,597

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Variable Interest Entities (Tables)

9 Months Ended

Sep. 30, 2021

Variable Interest Entities

Schedule of the assets and liabilities related to the consolidated CLOs and Debt Fund

The assets and liabilities related to these consolidated CLOs are as follows (in thousands):

	September 30, 2021		December 31, 2020
Assets:
Restricted cash	$	552,705	$	188,226
Loans and investments, net		5,119,520		2,923,634
Other assets		34,328		22,587
Total assets	$	5,706,553	$	3,134,447
Liabilities:
Collateralized loan obligations	$	4,715,804	$	2,517,309
Other liabilities		5,722		2,755
Total liabilities	$	4,721,526	$	2,520,064

Summary of the Company's variable interests in identified VIEs, of which the company is not the primary beneficiary

A summary of our variable interests in identified VIEs, of which we are not the primary beneficiary, as of September 30, 2021 is as follows (in thousands):

Type	Carrying Amount (1)
Loans	$	482,495
APL certificates		63,727
B Piece bonds		50,769
Equity investments		14,644
Agency interest only strips		648
Total	$	612,283

(1) Represents the carrying amount of loans and investments before reserves. At September 30, 2021, $130.0 million of loans to VIEs had corresponding specific loan loss reserves of $79.4 million. The maximum loss exposure as of September 30, 2021 would not exceed the carrying amount of our investment.

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Equity (Tables)

9 Months Ended

Sep. 30, 2021

Equity

Schedule of dividends declared by the Company (on a per share basis)

Common Stock			Preferred Stock
				Dividend (1)
Declaration Date	Dividend		Declaration Date	Series A		Series B		Series C		Series D		Series E
February 17, 2021	$	0.33	February 1, 2021	$	0.515625	$	0.484375	$	0.53125		N/A	N/A
May 5, 2021	$	0.34	April 30, 2021	$	0.515625	$	0.484375	$	0.53125		N/A	N/A
July 28, 2021	$	0.35	July 2, 2021		N/A		N/A		N/A	$	0.256771	N/A

(1) The dividend declared on July 2, 2021 was for June 2, 2021 through July 29, 2021, the dividend declared on April 30, 2021 was for March 1, 2021 through May 31, 2021 and the dividend declared on February 1, 2021 was for December 1, 2020 through February 28, 2021. As mentioned above, we fully redeemed our Series A, B and C preferred stock in June 2021.
​

Schedule of reconciliation of the numerator and denominator of the basic and diluted EPS computations

	Three Months Ended September 30,
	2021				2020
	Basic		Diluted		Basic		Diluted
Net income attributable to common stockholders (1)	$	72,804	$	72,804	$	81,997	$	81,997
Net income attributable to noncontrolling interest (2)		—		8,347		—		13,836
Net income attributable to common stockholders and noncontrolling interest	$	72,804	$	81,151	$	81,997	$	95,833
Weighted average shares outstanding		142,624,300		142,624,300		113,766,446		113,766,446
Dilutive effect of OP Units (2)		—		16,351,643		—		19,196,660
Dilutive effect of restricted stock units (3)		—		940,045		—		1,029,668
Dilutive effect of convertible notes (4)		—		354,917		—		4,313
Weighted average shares outstanding		142,624,300		160,270,905		113,766,446		133,997,087
Net income per common share (1)	$	0.51	$	0.51	$	0.72	$	0.72

	Nine Months Ended September 30,
	2021				2020
	Basic		Diluted		Basic		Diluted
Net income attributable to common stockholders (1)	$	211,409	$	211,409	$	66,778	$	66,778
Net income attributable to noncontrolling interest (2)		—		26,806		—		11,012
Net income attributable to common stockholders and noncontrolling interest	$	211,409	$	238,215	$	66,778	$	77,790
Weighted average shares outstanding		134,437,663		134,437,663		111,775,436		111,775,436
Dilutive effect of OP Units (2)		—		16,985,073		—		19,993,983
Dilutive effect of restricted stock units (3)		—		927,542		—		600,648
Dilutive effect of convertible notes (4)		—		341,183		—		31,248
Weighted average shares outstanding		134,437,663		152,691,461		111,775,436		132,401,315
Net income per common share (1)	$	1.57	$	1.56	$	0.60	$	0.59

(1) Net of preferred stock dividends.

(2) We consider OP Units to be common stock equivalents as the holders have voting rights, the right to distributions and the right to redeem the OP Units for the cash value of a corresponding number of shares of common stock or a corresponding number of shares of common stock, at our election.

(3) Our chief executive officer was granted restricted stock units during 2020, which vest at the end of a four-year performance period based upon our achievement of total stockholder return objectives.

(4) The convertible senior unsecured notes impact diluted earnings per share if the average price of our common stock exceeds the conversion price, as calculated in accordance with the terms of the indenture.

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Segment Information (Tables)

9 Months Ended

Sep. 30, 2021

Segment Information

Schedule of statement of income and balance sheet by segment

	Three Months Ended September 30, 2021
	Structured		Agency		Other /
	Business		Business		Eliminations (1)		Consolidated
Interest income	$	114,710	$	10,770	$	—	$	125,480
Interest expense		50,823		4,737		—		55,560
Net interest income		63,887		6,033		—		69,920
Other revenue:
Gain on sales, including fee-based services, net		—		16,334		—		16,334
Mortgage servicing rights		—		32,453		—		32,453
Servicing revenue		—		34,960		—		34,960
Amortization of MSRs		—		(14,872)		—		(14,872)
Loss on derivative instruments, net		—		(1,492)		—		(1,492)
Other income, net		2,168		27		—		2,195
Total other revenue		2,168		67,410		—		69,578
Other expenses:
Employee compensation and benefits		14,082		27,891		—		41,973
Selling and administrative		5,718		6,039		—		11,757
Property operating expenses		149		—		—		149
Depreciation and amortization		634		1,173		—		1,807
Provision for loss sharing (net of recoveries)		—		(3,272)		—		(3,272)
Provision for credit losses (net of recoveries)		(3,445)		(354)		—		(3,799)
Total other expenses		17,138		31,477		—		48,615
Income before income from equity affiliates and income taxes		48,917		41,966		—		90,883
Income from equity affiliates		5,086		—		—		5,086
Provision for income taxes		(622)		(9,283)		—		(9,905)
Net income		53,381		32,683		—		86,064
Preferred stock dividends		4,913		—		—		4,913
Net income attributable to noncontrolling interest		—		—		8,347		8,347
Net income attributable to common stockholders	$	48,468	$	32,683	$	(8,347)	$	72,804

	Three Months Ended September 30, 2020
	Structured		Agency		Other /
	Business		Business		Eliminations (1)		Consolidated
Interest income	$	75,471	$	6,230	$	—	$	81,701
Interest expense		35,252		2,636		—		37,888
Net interest income		40,219		3,594		—		43,813
Other revenue:
Gain on sales, including fee-based services, net		—		19,895		—		19,895
Mortgage servicing rights		—		42,357		—		42,357
Servicing revenue		—		25,764		—		25,764
Amortization of MSRs		—		(12,416)		—		(12,416)
Property operating income		1,033		—		—		1,033
Gain (loss) on derivative instruments, net		118		(871)		—		(753)
Other income, net		1,050		—		—		1,050
Total other revenue		2,201		74,729		—		76,930
Other expenses:
Employee compensation and benefits		8,873		24,089		—		32,962
Selling and administrative		4,665		4,691		—		9,356
Property operating expenses		1,300		—		—		1,300
Depreciation and amortization		598		1,324		—		1,922
Provision for loss sharing (net of recoveries)		—		(2,227)		—		(2,227)
Provision for credit losses (net of recoveries)		(6,065)		(1,521)		—		(7,586)
Total other expenses		9,371		26,356		—		35,727
Income before sale of real estate, income from equity affiliates and income taxes		33,049		51,967		—		85,016
Loss on sale of real estate		(1,868)		—		—		(1,868)
Income from equity affiliates		32,358		—		—		32,358
Provision for income taxes		(6,494)		(11,291)		—		(17,785)
Net income		57,045		40,676		—		97,721
Preferred stock dividends		1,888		—		—		1,888
Net income attributable to noncontrolling interest		—		—		13,836		13,836
Net income attributable to common stockholders	$	55,157	$	40,676	$	(13,836)	$	81,997

	Nine Months Ended September 30, 2021
	Structured		Agency		Other /
	Business		Business		Eliminations (1)		Consolidated
Interest income	$	294,418	$	27,354	$	—	$	321,772
Interest expense		131,795		12,327		—		144,122
Net interest income		162,623		15,027		—		177,650
Other revenue:
Gain on sales, including fee-based services, net		—		86,102		—		86,102
Mortgage servicing rights		—		95,688		—		95,688
Servicing revenue		—		94,683		—		94,683
Amortization of MSRs		—		(43,744)		—		(43,744)
Loss on derivative instruments, net		—		(7,320)		—		(7,320)
Other income, net		4,105		35		—		4,140
Total other revenue		4,105		225,444		—		229,549
Other expenses:
Employee compensation and benefits		37,566		91,081		—		128,647
Selling and administrative		15,477		18,230		—		33,707
Property operating expenses		421		—		—		421
Depreciation and amortization		1,832		3,517		—		5,349
Provision for loss sharing (net of recoveries)		—		(1,070)		—		(1,070)
Provision for credit losses (net of recoveries)		(12,807)		118		—		(12,689)
Total other expenses		42,489		111,876		—		154,365
Income before extinguishment of debt, sale of real estate income from equity affiliates and income taxes		124,239		128,595		—		252,834
Loss on extinguishment of debt		(1,370)		—		—		(1,370)
Gain on sale of real estate		—		1,228		—		1,228
Income from equity affiliates		32,095		—		—		32,095
Provision for income taxes		(6,288)		(27,068)		—		(33,356)
Net income		148,676		102,755		—		251,431
Preferred stock dividends		13,216		—		—		13,216
Net income attributable to noncontrolling interest		—		—		26,806		26,806
Net income attributable to common stockholders	$	135,460	$	102,755	$	(26,806)	$	211,409

	Nine Months Ended September 30, 2020
	Structured		Agency		Other /
	Business		Business		Eliminations (1)		Consolidated
Interest income	$	228,243	$	25,064	$	—	$	253,307
Interest expense		115,390		13,782		—		129,172
Net interest income		112,853		11,282		—		124,135
Other revenue:
Gain on sales, including fee-based services, net		—		60,566		—		60,566
Mortgage servicing rights		—		96,708		—		96,708
Servicing revenue		—		76,285		—		76,285
Amortization of MSRs		—		(36,129)		—		(36,129)
Property operating income		3,976		—		—		3,976
Loss on derivative instruments, net		(3,176)		(55,676)		—		(58,852)
Other income, net		3,347		57		—		3,404
Total other revenue		4,147		141,811		—		145,958
Other expenses:
Employee compensation and benefits		28,880		72,772		—		101,652
Selling and administrative		12,647		16,366		—		29,013
Property operating expenses		4,778		—		—		4,778
Depreciation and amortization		1,845		3,985		—		5,830
Provision for loss sharing (net of recoveries)		—		21,706		—		21,706
Provision for credit losses (net of recoveries)		58,383		1,127		—		59,510
Total other expenses		106,533		115,956		—		222,489
Income before extinguishment of debt, sale of real estate, income from equity affiliates and income taxes		10,467		37,137		—		47,604
Loss on extinguishment of debt		(3,546)		—		—		(3,546)
Loss on sale of real estate		(1,868)		—		—		(1,868)
Income from equity affiliates		56,758		—		—		56,758
Provision for income taxes		(9,337)		(6,156)		—		(15,493)
Net income		52,474		30,981		—		83,455
Preferred stock dividends		5,665		—		—		5,665
Net income attributable to noncontrolling interest		—		—		11,012		11,012
Net income attributable to common stockholders	$	46,809	$	30,981	$	(11,012)	$	66,778

(1) Includes income allocated to the noncontrolling interest holders not allocated to the two reportable segments.

	September 30, 2021
	Structured Business		Agency Business		Consolidated
Assets:
Cash and cash equivalents	$	162,870	$	217,860	$	380,730
Restricted cash		552,706		17,222		569,928
Loans and investments, net		8,993,790		—		8,993,790
Loans held-for-sale, net		—		1,274,234		1,274,234
Capitalized mortgage servicing rights, net		—		417,283		417,283
Securities held-to-maturity, net		—		112,735		112,735
Investments in equity affiliates		91,846		—		91,846
Goodwill and other intangible assets		12,500		89,433		101,933
Other assets		136,653		90,452		227,105
Total assets	$	9,950,365	$	2,219,219	$	12,169,584
Liabilities:
Debt obligations	$	8,515,801	$	1,102,485	$	9,618,286
Allowance for loss-sharing obligations		—		62,828		62,828
Other liabilities		225,088		127,975		353,063
Total liabilities	$	8,740,889	$	1,293,288	$	10,034,177

	December 31, 2020
Assets:
Cash and cash equivalents	$	172,568	$	166,960	$	339,528
Restricted cash		188,226		9,244		197,470
Loans and investments, net		5,285,868		—		5,285,868
Loans held-for-sale, net		—		986,919		986,919
Capitalized mortgage servicing rights, net		—		379,974		379,974
Securities held-to-maturity, net		—		95,524		95,524
Investments in equity affiliates		74,274		—		74,274
Goodwill and other intangible assets		12,500		92,951		105,451
Other assets		142,844		53,134		195,978
Total assets	$	5,876,280	$	1,784,706	$	7,660,986
Liabilities:
Debt obligations	$	4,872,626	$	952,038	$	5,824,664
Allowance for loss-sharing obligations		—		64,303		64,303
Other liabilities		203,554		85,780		289,334
Total liabilities	$	5,076,180	$	1,102,121	$	6,178,301

Schedule of origination data and loan sales data

	Three Months Ended September 30,						Nine Months Ended September 30,
	2021			2020			2021			2020
Origination Data:
Structured Business
Bridge loans (1)	$	2,383,346		$	286,993		$	5,189,722		$	1,371,049
Mezzanine loans		62,657			1,000			156,914			16,722
Preferred equity investments		28,650			—			28,650			23,500
Other loans (2)		—			3,765			26,238			37,197
Total new loan originations	$	2,474,653		$	291,758		$	5,401,524		$	1,448,468
(1) The three and nine months ended September 30, 2021 includes 25 and 68 SFR loans with a UPB of $105.3 million and $219.5 million, respectively. During the three and nine months ended September 30, 2021, we committed to fund one and five SFR build-to-rent bridge loans totaling $17.6 million and $156.0 million, respectively.
(2) The nine months ended September 30, 2021 and 2020 includes 1 and 9 SFR permanent loans with a UPB of $26.2 million and $37.2 million, respectively.
Loan payoffs / paydowns	$	567,858		$	206,028		$	1,463,826		$	640,494
Agency Business
Origination Volumes by Investor:
Fannie Mae	$	719,730		$	1,117,679		$	2,421,206		$	2,839,833
Private Label		625,176			5,840			1,154,814			337,307
Freddie Mac		307,664			252,014			578,295			587,445
FHA		84,430			100,345			281,674			193,821
SFR - Fixed Rate		67,227			—			79,223			—
Total	$	1,804,227		$	1,475,878		$	4,515,212		$	3,958,406
Total loan commitment volume	$	1,856,474		$	1,528,551		$	4,510,953		$	4,002,492
Loan Sales Data:
Agency Business
Fannie Mae	$	660,693		$	1,038,053		$	2,820,558		$	2,856,020
Freddie Mac		238,880			116,628			647,827			468,019
FHA		78,188			64,781			308,193			118,218
SFR - Fixed Rate		29,197			—			104,491			—
Private Label		—			—			449,890			727,154
Total	$	1,006,958		$	1,219,462		$	4,330,959		$	4,169,411
Sales margin (fee-based services as a % of loan sales)		1.62	%		1.63	%		1.99	%		1.45	%
MSR rate (MSR income as a % of loan commitments)		1.75	%		2.77	%		2.12	%		2.42	%

Schedule of key servicing metrics for Agency Business

	September 30, 2021
			Wtd. Avg. Servicing	Wtd. Avg. Life of
	UPB of Servicing		Fee Rate	Servicing Portfolio
Key Servicing Metrics for Agency Business:	Portfolio		(basis points)	(in years)
Fannie Mae	$	19,271,527	53.2	8.4
Freddie Mac		4,726,587	28.1	9.8
Private Label		1,176,391	20.0	8.8
FHA		933,519	15.6	21.4
SFR - Fixed Rate		104,094	20.0	5.7
Total	$	26,212,118	45.7	9.1

	December 31, 2020
Fannie Mae	$	18,268,268	52.3	8.2
Freddie Mac		4,881,080	27.9	9.9
FHA		752,116	16.3	20.3
Private Label		726,992	20.0	8.7
Total	$	24,628,456	45.4	8.9

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Description of Business (Details)	9 Months Ended
	Sep. 30, 2021 segment
Description of Business
Number of business segments	2

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Loans and Investments - Investment Portfolio and Concentration of Credit Risk (Details)	9 Months Ended	12 Months Ended
	Sep. 30, 2021 USD ($) borrower loan	Dec. 31, 2020 USD ($) loan borrower	Jun. 30, 2021 USD ($)	Mar. 31, 2021 USD ($)	Sep. 30, 2020 USD ($)	Jun. 30, 2020 USD ($)
Loans and Investments
Loans and investments, gross	$ 9,169,007,000	$ 5,475,082,000
Allowance for credit losses	(131,534,000)	(148,329,000)	$ (138,447,000)		$ (146,745,000)	$ (152,811,000)
Unearned revenue	(43,683,000)	(40,885,000)
Loans and investments, net	$ 8,993,790,000	$ 5,285,868,000
Percent of Total	100.00%	100.00%
Loan Count | loan	476	328
Wtd. Avg. Pay Rate (as a percent)	4.56%	5.23%
Wtd. Avg. Remaining Months to Maturity	22 months	19 months 6 days
Wtd. Avg. First Dollar LTV Ratio (as percent)	2.00%	4.00%
Wtd. Avg. Last Dollar LTV Ratio (as percent)	76.00%	77.00%
Credit risk concentration
Loans and Investments
Wtd. Avg. First Dollar LTV Ratio (as percent)	2.00%
Wtd. Avg. Last Dollar LTV Ratio (as percent)	76.00%
Credit risk concentration | Single-Family Rental
Loans and Investments
Percent of Total	3.00%
Wtd. Avg. First Dollar LTV Ratio (as percent)	0.00%
Wtd. Avg. Last Dollar LTV Ratio (as percent)	63.00%
Total assets | Credit risk concentration
Loans and Investments
Loan Count | loan	32	22
Number of different borrowers | borrower	5	5
Total assets | Credit risk concentration | Five Borrowers
Loans and Investments
Concentration risk, percentage	11.00%	12.00%
Bridge loans
Loans and Investments
Loans and investments, gross	$ 8,696,486,000	$ 5,022,509,000
Percent of Total	95.00%	92.00%
Loan Count | loan	423	263
Wtd. Avg. Pay Rate (as a percent)	4.45%	5.09%
Wtd. Avg. Remaining Months to Maturity	20 months 21 days	16 months 6 days
Wtd. Avg. First Dollar LTV Ratio (as percent)	0.00%	0.00%
Wtd. Avg. Last Dollar LTV Ratio (as percent)	76.00%	76.00%
Bridge loans | Single-Family Rental
Loans and Investments
Number of loans under the loan portfolio | loan	86	38
Total loan commitment	$ 614,300,000	$ 309,200,000
Preferred equity investments
Loans and Investments
Loans and investments, gross	$ 186,705,000	$ 159,242,000
Percent of Total	2.00%	3.00%
Loan Count | loan	13	29
Wtd. Avg. Pay Rate (as a percent)	6.62%	7.40%
Wtd. Avg. Remaining Months to Maturity	35 months 6 days	45 months
Wtd. Avg. First Dollar LTV Ratio (as percent)	59.00%	32.00%
Wtd. Avg. Last Dollar LTV Ratio (as percent)	89.00%	82.00%
Mezzanine loans
Loans and Investments
Loans and investments, gross	$ 256,413,000	$ 224,928,000
Percent of Total	3.00%	4.00%
Loan Count | loan	38	14
Wtd. Avg. Pay Rate (as a percent)	6.83%	7.07%
Wtd. Avg. Remaining Months to Maturity	53 months 15 days	49 months 24 days
Wtd. Avg. First Dollar LTV Ratio (as percent)	30.00%	64.00%
Wtd. Avg. Last Dollar LTV Ratio (as percent)	82.00%	89.00%
Other loans
Loans and Investments
Loans and investments, gross	$ 29,403,000	$ 68,403,000
Percent of Total	1.00%	1.00%
Loan Count | loan	2	22
Wtd. Avg. Pay Rate (as a percent)	4.63%	4.95%
Wtd. Avg. Remaining Months to Maturity	51 months 3 days	74 months 24 days
Wtd. Avg. First Dollar LTV Ratio (as percent)	0.00%	0.00%
Wtd. Avg. Last Dollar LTV Ratio (as percent)	69.00%	69.00%
Other loans | Single-Family Rental
Loans and Investments
Number of loans under the loan portfolio | loan	2	22
Unpaid principal balance, funded	$ 277,300,000	$ 88,100,000
Transfer of fixed rate SFR from Structured Business to Agency Business				$ 21
Transfer of UPB from Structured Business To Agency Business				$ 65,200,000

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Loans and Investments - Risk Ratings and LTV Ratios (Details) - USD ($) $ in Thousands	9 Months Ended	12 Months Ended
	Sep. 30, 2021	Dec. 31, 2020
Loans and Investments
Percentage of Portfolio	100.00%	100.00%
Wtd. Avg. First Dollar LTV Ratio (as percent)	2.00%	4.00%
Wtd. Avg. Last Dollar LTV Ratio (as percent)	76.00%	77.00%
Credit risk concentration
Loans and Investments
Origination Year 2021	$ 5,036,453
Origination Year 2020	2,060,467
Origination Year 2019	1,354,602
Origination Year 2018	325,787
Origination Year 2017	217,973
Origination Year Prior	173,725
Amortized cost basis	$ 9,169,007
Wtd. Avg. First Dollar LTV Ratio (as percent)	2.00%
Wtd. Avg. Last Dollar LTV Ratio (as percent)	76.00%
Credit risk concentration | Loans and investments portfolio | New York
Loans and Investments
Concentration risk, percentage	15.00%	19.00%
Credit risk concentration | Loans and investments portfolio | Texas
Loans and Investments
Concentration risk, percentage	18.00%	11.00%
Credit risk concentration | Multifamily
Loans and Investments
Origination Year 2021	$ 4,806,959
Origination Year 2020	1,857,893
Origination Year 2019	1,148,978
Origination Year 2018	201,888
Origination Year 2017	101,617
Origination Year Prior	37,676
Amortized cost basis	$ 8,155,011
Percentage of Portfolio	89.00%
Wtd. Avg. First Dollar LTV Ratio (as percent)	2.00%
Wtd. Avg. Last Dollar LTV Ratio (as percent)	76.00%
Credit risk concentration | Multifamily | Pass
Loans and Investments
Origination Year 2021	$ 3,167,965
Origination Year 2020	350,623
Origination Year 2019	185,265
Origination Year 2017	20,300
Origination Year Prior	276
Amortized cost basis	3,724,429
Credit risk concentration | Multifamily | Pass/Watch
Loans and Investments
Origination Year 2021	1,458,271
Origination Year 2020	1,077,411
Origination Year 2019	256,877
Origination Year 2018	127,255
Origination Year 2017	32,500
Origination Year Prior	28,800
Amortized cost basis	2,981,114
Credit risk concentration | Multifamily | Special Mention
Loans and Investments
Origination Year 2021	180,723
Origination Year 2020	415,519
Origination Year 2019	617,506
Origination Year 2018	63,233
Origination Year Prior	350
Amortized cost basis	1,277,331
Credit risk concentration | Multifamily | Substandard
Loans and Investments
Origination Year 2020	14,340
Origination Year 2019	89,330
Origination Year 2018	11,400
Origination Year 2017	31,117
Origination Year Prior	8,250
Amortized cost basis	154,437
Credit risk concentration | Multifamily | Doubtful
Loans and Investments
Origination Year 2017	17,700
Amortized cost basis	17,700
Credit risk concentration | Land
Loans and Investments
Origination Year 2020	79,118
Origination Year 2019	19,524
Origination Year 2017	19,975
Origination Year Prior	127,928
Amortized cost basis	$ 246,545
Percentage of Portfolio	3.00%
Wtd. Avg. First Dollar LTV Ratio (as percent)	0.00%
Wtd. Avg. Last Dollar LTV Ratio (as percent)	95.00%
Credit risk concentration | Land | Special Mention
Loans and Investments
Origination Year 2020	$ 8,100
Amortized cost basis	8,100
Credit risk concentration | Land | Substandard
Loans and Investments
Origination Year 2020	71,018
Origination Year 2019	19,524
Origination Year 2017	19,975
Origination Year Prior	127,928
Amortized cost basis	238,445
Credit risk concentration | Healthcare
Loans and Investments
Origination Year 2019	65,819
Origination Year 2018	41,500
Origination Year 2017	39,650
Amortized cost basis	$ 146,969
Percentage of Portfolio	2.00%
Wtd. Avg. First Dollar LTV Ratio (as percent)	0.00%
Wtd. Avg. Last Dollar LTV Ratio (as percent)	79.00%
Credit risk concentration | Healthcare | Pass/Watch
Loans and Investments
Origination Year 2018	$ 26,850
Amortized cost basis	26,850
Credit risk concentration | Healthcare | Special Mention
Loans and Investments
Origination Year 2019	65,819
Origination Year 2018	14,650
Origination Year 2017	39,650
Amortized cost basis	120,119
Credit risk concentration | Student Housing
Loans and Investments
Origination Year 2021	25,700
Origination Year 2020	23,500
Origination Year 2019	31,100
Origination Year 2018	13,000
Amortized cost basis	$ 93,300
Percentage of Portfolio	1.00%
Wtd. Avg. First Dollar LTV Ratio (as percent)	19.00%
Wtd. Avg. Last Dollar LTV Ratio (as percent)	71.00%
Credit risk concentration | Student Housing | Pass
Loans and Investments
Origination Year 2021	$ 25,700
Amortized cost basis	25,700
Credit risk concentration | Student Housing | Special Mention
Loans and Investments
Origination Year 2019	31,100
Amortized cost basis	31,100
Credit risk concentration | Student Housing | Substandard
Loans and Investments
Origination Year 2020	23,500
Origination Year 2018	13,000
Amortized cost basis	36,500
Credit risk concentration | Office
Loans and Investments
Origination Year 2020	35,410
Origination Year 2018	42,799
Origination Year 2017	43,151
Origination Year Prior	2,976
Amortized cost basis	$ 124,336
Percentage of Portfolio	1.00%
Wtd. Avg. First Dollar LTV Ratio (as percent)	0.00%
Wtd. Avg. Last Dollar LTV Ratio (as percent)	83.00%
Credit risk concentration | Office | Special Mention
Loans and Investments
Origination Year 2020	$ 35,410
Origination Year 2018	42,799
Origination Year 2017	43,151
Origination Year Prior	2,096
Amortized cost basis	123,456
Credit risk concentration | Office | Doubtful
Loans and Investments
Origination Year Prior	880
Amortized cost basis	880
Credit risk concentration | Retail
Loans and Investments
Origination Year 2019	4,000
Origination Year 2018	26,600
Origination Year Prior	3,445
Amortized cost basis	$ 34,045
Percentage of Portfolio	1.00%
Wtd. Avg. First Dollar LTV Ratio (as percent)	9.00%
Wtd. Avg. Last Dollar LTV Ratio (as percent)	72.00%
Credit risk concentration | Retail | Pass
Loans and Investments
Origination Year 2019	$ 4,000
Amortized cost basis	4,000
Credit risk concentration | Retail | Special Mention
Loans and Investments
Origination Year 2018	26,600
Amortized cost basis	26,600
Credit risk concentration | Retail | Substandard
Loans and Investments
Origination Year Prior	3,445
Amortized cost basis	3,445
Credit risk concentration | Single-Family Rental
Loans and Investments
Origination Year 2021	203,794
Origination Year 2020	58,700
Origination Year 2019	44,181
Amortized cost basis	$ 306,675
Percentage of Portfolio	3.00%
Wtd. Avg. First Dollar LTV Ratio (as percent)	0.00%
Wtd. Avg. Last Dollar LTV Ratio (as percent)	63.00%
Credit risk concentration | Single-Family Rental | Pass
Loans and Investments
Origination Year 2021	$ 30,777
Origination Year 2020	3,165
Origination Year 2019	44,181
Amortized cost basis	78,123
Credit risk concentration | Single-Family Rental | Pass/Watch
Loans and Investments
Origination Year 2021	169,677
Origination Year 2020	26,813
Amortized cost basis	196,490
Credit risk concentration | Single-Family Rental | Special Mention
Loans and Investments
Origination Year 2021	3,340
Origination Year 2020	28,722
Amortized cost basis	32,062
Credit risk concentration | Hotel
Loans and Investments
Origination Year 2020	5,846
Origination Year 2019	41,000
Amortized cost basis	$ 46,846
Percentage of Portfolio	1.00%
Wtd. Avg. First Dollar LTV Ratio (as percent)	0.00%
Wtd. Avg. Last Dollar LTV Ratio (as percent)	75.00%
Credit risk concentration | Hotel | Pass/Watch
Loans and Investments
Origination Year 2020	$ 5,846
Amortized cost basis	5,846
Credit risk concentration | Hotel | Special Mention
Loans and Investments
Origination Year 2019	41,000
Amortized cost basis	41,000
Credit risk concentration | Other
Loans and Investments
Origination Year 2017	13,580
Origination Year Prior	1,700
Amortized cost basis	$ 15,280
Percentage of Portfolio	1.00%
Wtd. Avg. First Dollar LTV Ratio (as percent)	7.00%
Wtd. Avg. Last Dollar LTV Ratio (as percent)	51.00%
Credit risk concentration | Other | Pass/Watch
Loans and Investments
Origination Year 2017	$ 13,580
Amortized cost basis	13,580
Credit risk concentration | Other | Doubtful
Loans and Investments
Origination Year Prior	1,700
Amortized cost basis	$ 1,700

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Loans and Investments - Allowance for Credit Losses (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2021	Sep. 30, 2020	Sep. 30, 2021	Sep. 30, 2020	Dec. 31, 2020
Changes in allowance for loan losses
Allowance at beginning of period	$ 138,447	$ 152,811	$ 148,329
Provision for loan losses (net of recoveries)	(6,913)	(6,066)	(16,795)	$ 58,382
Allowance at end of period	131,534	146,745	131,534	146,745
Unfunded commitments related to structured loans and investments	638,100		638,100		$ 353,800
Accrued interest receivable related to loans	59,700		59,700		$ 41,600
As Reported Pre-Adoption
Changes in allowance for loan losses
Allowance at beginning of period				71,069
Impact of adopting CECL
Changes in allowance for loan losses
Allowance at beginning of period				17,294
Land
Changes in allowance for loan losses
Allowance at beginning of period	78,057	78,094	78,150
Provision for loan losses (net of recoveries)	(45)	(84)	(138)	10,064
Allowance at end of period	78,012	78,010	78,012	78,010
Land | As Reported Pre-Adoption
Changes in allowance for loan losses
Allowance at beginning of period				67,869
Land | Impact of adopting CECL
Changes in allowance for loan losses
Allowance at beginning of period				77
Multifamily
Changes in allowance for loan losses
Allowance at beginning of period	30,160	34,606	36,468
Provision for loan losses (net of recoveries)	(2,093)	103	(8,401)	18,387
Allowance at end of period	28,067	34,709	28,067	34,709
Multifamily | Impact of adopting CECL
Changes in allowance for loan losses
Allowance at beginning of period				16,322
Retail
Changes in allowance for loan losses
Allowance at beginning of period	13,819	13,981	13,861
Provision for loan losses (net of recoveries)		(40)	(42)	13,606
Allowance at end of period	13,819	13,941	13,819	13,941
Retail | Impact of adopting CECL
Changes in allowance for loan losses
Allowance at beginning of period				335
Office
Changes in allowance for loan losses
Allowance at beginning of period	7,822	8,532	1,846
Provision for loan losses (net of recoveries)	(95)	(6,589)	5,881	156
Allowance at end of period	7,727	1,943	7,727	1,943
Office | As Reported Pre-Adoption
Changes in allowance for loan losses
Allowance at beginning of period				1,500
Office | Impact of adopting CECL
Changes in allowance for loan losses
Allowance at beginning of period				287
Healthcare
Changes in allowance for loan losses
Allowance at beginning of period	3,866	3,930	3,880
Provision for loan losses (net of recoveries)	(3,851)	(21)	(3,865)	3,845
Allowance at end of period	15	3,909	15	3,909
Healthcare | Impact of adopting CECL
Changes in allowance for loan losses
Allowance at beginning of period				64
Student Housing
Changes in allowance for loan losses
Allowance at beginning of period	2,365	4,110	4,078
Provision for loan losses (net of recoveries)	(542)	675	(2,255)	4,717
Allowance at end of period	1,823	4,785	1,823	4,785
Student Housing | Impact of adopting CECL
Changes in allowance for loan losses
Allowance at beginning of period				68
Hotel
Changes in allowance for loan losses
Allowance at beginning of period	225	7,672	7,759
Provision for loan losses (net of recoveries)	(209)	(133)	(7,743)	7,510
Allowance at end of period	16	7,539	16	7,539
Hotel | Impact of adopting CECL
Changes in allowance for loan losses
Allowance at beginning of period				29
Other
Changes in allowance for loan losses
Allowance at beginning of period	2,133	1,886	2,287
Provision for loan losses (net of recoveries)	(78)	23	(232)	97
Allowance at end of period	$ 2,055	$ 1,909	$ 2,055	1,909
Other | As Reported Pre-Adoption
Changes in allowance for loan losses
Allowance at beginning of period				1,700
Other | Impact of adopting CECL
Changes in allowance for loan losses
Allowance at beginning of period				$ 112

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Loans and Investments - Summary of impaired loans (Details) $ in Thousands	9 Months Ended	12 Months Ended
	Sep. 30, 2021 USD ($)	Dec. 31, 2020 USD ($)
Loans and Investments
UPB	$ 168,056	$ 282,785
Carrying Value	161,012	254,938
Allowance for Credit Losses	$ 94,886	$ 106,265
Wtd. Avg. First Dollar LTV Ratio	2	1
Wtd. Avg. Last Dollar LTV Ratio	94	94
Number of impaired loans (less unearned revenue and other holdbacks and adjustments) by asset class	8	10
Land
Loans and Investments
UPB	$ 134,215	$ 134,215
Carrying Value	127,868	127,829
Allowance for Credit Losses	$ 77,868	$ 77,869
Wtd. Avg. First Dollar LTV Ratio	0	0
Wtd. Avg. Last Dollar LTV Ratio	99	99
Hotel
Loans and Investments
UPB		$ 110,000
Carrying Value		89,613
Allowance for Credit Losses		$ 7,500
Wtd. Avg. First Dollar LTV Ratio		0
Wtd. Avg. Last Dollar LTV Ratio		94
Retail
Loans and Investments
UPB	$ 30,045	$ 30,079
Carrying Value	29,348	28,957
Allowance for Credit Losses	$ 13,818	$ 13,851
Wtd. Avg. First Dollar LTV Ratio	10	10
Wtd. Avg. Last Dollar LTV Ratio	77	75
Healthcare
Loans and Investments
UPB		$ 4,625
Carrying Value		4,673
Allowance for Credit Losses		$ 3,845
Wtd. Avg. First Dollar LTV Ratio		0
Wtd. Avg. Last Dollar LTV Ratio		83
Office
Loans and Investments
UPB	$ 2,096	$ 2,166
Carrying Value	2,096	2,166
Allowance for Credit Losses	$ 1,500	$ 1,500
Wtd. Avg. First Dollar LTV Ratio	0	0
Wtd. Avg. Last Dollar LTV Ratio	64	71
Commercial
Loans and Investments
UPB	$ 1,700	$ 1,700
Carrying Value	1,700	1,700
Allowance for Credit Losses	$ 1,700	$ 1,700
Wtd. Avg. First Dollar LTV Ratio	63	63
Wtd. Avg. Last Dollar LTV Ratio	63	63

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Loans and Investments - Non-performing Loans (Details) $ in Thousands	9 Months Ended	12 Months Ended
	Sep. 30, 2021 USD ($) loan	Dec. 31, 2020 USD ($) loan
Non-performing loans by asset class
Number of loans for which no provision for loan loss made | loan	0	0
Number of loans | loan	476	328
Amortized cost of loans on nonaccrual status	$ 0	$ 0
UPB	$ 168,056	$ 282,785
Non-performing loans
Non-performing loans by asset class
Number of loans | loan	6	7
Carrying value of loans	$ 53,000	$ 53,800
Loan loss reserves	2,600	6,500
UPB	57,700	62,325
Less Than 90 Days Past Due | Non-performing loans
Non-performing loans by asset class
Past Due	0	0
Greater than 90 Days Past Due
Non-performing loans by asset class
Past Due	0	0
Greater than 90 Days Past Due | Non-performing loans
Non-performing loans by asset class
Past Due	57,700	62,325
Student Housing | Non-performing loans
Non-performing loans by asset class
UPB	36,500	36,500
Student Housing | Less Than 90 Days Past Due | Non-performing loans
Non-performing loans by asset class
Past Due	0	0
Student Housing | Greater than 90 Days Past Due | Non-performing loans
Non-performing loans by asset class
Past Due	36,500	36,500
Multifamily | Non-performing loans
Non-performing loans by asset class
UPB	17,700	17,700
Multifamily | Less Than 90 Days Past Due | Non-performing loans
Non-performing loans by asset class
Past Due	0	0
Multifamily | Greater than 90 Days Past Due | Non-performing loans
Non-performing loans by asset class
Past Due	17,700	17,700
Healthcare
Non-performing loans by asset class
UPB		4,625
Healthcare | Non-performing loans
Non-performing loans by asset class
UPB		4,625
Healthcare | Less Than 90 Days Past Due | Non-performing loans
Non-performing loans by asset class
Past Due	0	0
Healthcare | Greater than 90 Days Past Due | Non-performing loans
Non-performing loans by asset class
Past Due		4,625
Retail
Non-performing loans by asset class
UPB	30,045	30,079
Retail | Non-performing loans
Non-performing loans by asset class
UPB	920	920
Retail | Less Than 90 Days Past Due | Non-performing loans
Non-performing loans by asset class
Past Due	0	0
Retail | Greater than 90 Days Past Due | Non-performing loans
Non-performing loans by asset class
Past Due	920	920
Commercial
Non-performing loans by asset class
UPB	1,700	1,700
Commercial | Non-performing loans
Non-performing loans by asset class
UPB	1,700	1,700
Commercial | Less Than 90 Days Past Due | Non-performing loans
Non-performing loans by asset class
Past Due	0	0
Commercial | Greater than 90 Days Past Due | Non-performing loans
Non-performing loans by asset class
Past Due	1,700	1,700
Office
Non-performing loans by asset class
UPB	2,096	2,166
Office | Non-performing loans
Non-performing loans by asset class
UPB	880	880
Office | Less Than 90 Days Past Due | Non-performing loans
Non-performing loans by asset class
Past Due	0	0
Office | Greater than 90 Days Past Due | Non-performing loans
Non-performing loans by asset class
Past Due	$ 880	$ 880

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Loans and Investments - Charge-offs and Recoveries Narratives (Details) $ in Thousands	9 Months Ended
	Sep. 30, 2021 USD ($) loan	Jun. 30, 2021 USD ($)	Dec. 31, 2020 USD ($)	Sep. 30, 2020 USD ($)	Jun. 30, 2020 USD ($)
Loans and Investments
Allowance for credit losses	$ 131,534	$ 138,447	$ 148,329	$ 146,745	$ 152,811
Six loans collateralized by a land development project | Maturity date of March 2020
Loans and Investments
Number of loans with unpaid principal balance | loan	6
Unpaid principal balance on loans	$ 121,400
Five loans collateralized by a land development project | Maturity date of March 2020
Loans and Investments
Number of loans with unpaid principal balance | loan	5
Unpaid principal balance on loans	$ 112,000
Weighted average accrual rate of interest (as a percent)	7.91%
Allowance for credit losses	$ 71,400		71,400
Hotel
Loans and Investments
Allowance for credit losses	$ 16	$ 225	$ 7,759	$ 7,539	$ 7,672

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Loans and Investments - Purchased Credit Deterioration and Troubled Debt Restructurings (Details) $ in Thousands	1 Months Ended			9 Months Ended		12 Months Ended
	Jun. 30, 2021 USD ($)	Jan. 31, 2021	Aug. 31, 2020 USD ($)	Sep. 30, 2021 USD ($) item loan	Sep. 30, 2020 USD ($) item	Dec. 31, 2020 USD ($) loan	Dec. 31, 2019 USD ($)	Jun. 30, 2020 USD ($)	Mar. 31, 2020 USD ($)
Financing Receivable, Recorded Investment, Past Due [Line Items]
Purchase of loan				$ 5,174,313	$ 1,425,051
Allowance for credit losses	$ 138,447			$ 131,534	$ 146,745	$ 148,329		$ 152,811
Proceeds from full satisfaction of loans	95,000
Reversal of allowance for credit losses	7,500
Interest income from loans	3,500
Troubled debt restructurings, number | item				2
Other loans modification | item				0	0
Interest reserve				$ 89,200		$ 78,300
Number of loans covered under interest reserve | loan				297		186
Aggregate UPB covered under interest reserve				$ 5,270,000		$ 3,600,000
Hotel
Financing Receivable, Recorded Investment, Past Due [Line Items]
Allowance for credit losses	225			16	$ 7,539	7,759		7,672
Hotel | Forbearance agreement
Financing Receivable, Recorded Investment, Past Due [Line Items]
Fixed rate of interest (as a percent)		9.50%
Principal reduction			$ (10,000)
Pay rate (as a percent)			1.00%
Hotel | Forbearance agreement | LIBOR
Financing Receivable, Recorded Investment, Past Due [Line Items]
Variable rate, spread (as a percent)			3.00%
LIBOR Floor rate			1.50%
Retail
Financing Receivable, Recorded Investment, Past Due [Line Items]
Allowance for credit losses	$ 13,819			13,819	$ 13,941	13,861		$ 13,981
Retail | Loan modification agreement
Financing Receivable, Recorded Investment, Past Due [Line Items]
Maturity period (in years)			3 years
Percentage of interest foregone			2.00
Principal paydowns			$ 6,000
Principal reduction			(8,000)
Additional reserve deposit			$ 4,600
Retail | Loan modification agreement | LIBOR
Financing Receivable, Recorded Investment, Past Due [Line Items]
Variable rate, spread (as a percent)			5.50%
LIBOR Floor rate			6.50%
Bridge loans
Financing Receivable, Recorded Investment, Past Due [Line Items]
Principal amount				35,000
Bridge loans | Hotel
Financing Receivable, Recorded Investment, Past Due [Line Items]
Principal amount							$ 110,000
Purchase of loan			$ 60,000				$ 50,000
Allowance for credit losses									$ 7,500
Loan discount			39,900
Total discount received			20,100
Bridge loans | Retail | Loan modification agreement
Financing Receivable, Recorded Investment, Past Due [Line Items]
Principal amount			$ 26,500
Bridge loans | Retail | Loan modification agreement | LIBOR
Financing Receivable, Recorded Investment, Past Due [Line Items]
Variable rate, spread (as a percent)			6.00%
LIBOR Floor rate			2.375%
Mezzanine loans | Retail | Loan modification agreement
Financing Receivable, Recorded Investment, Past Due [Line Items]
Principal amount			$ 6,100
Fixed rate of interest (as a percent)			12.00%
Greater than 90 Days Past Due
Financing Receivable, Recorded Investment, Past Due [Line Items]
Loans past due 90 days or more still accruing interest				$ 0		$ 0

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Loans Held-for-Sale, Net (Details) $ in Thousands	1 Months Ended	3 Months Ended		9 Months Ended		12 Months Ended
	Oct. 31, 2021 USD ($)	Sep. 30, 2021 USD ($)	Sep. 30, 2020 USD ($)	Sep. 30, 2021 USD ($) loan	Sep. 30, 2020 USD ($)	Dec. 31, 2020 USD ($) loan
Loans Held-for-Sale, Net
Loans held-for-sale		$ 1,259,287		$ 1,259,287		$ 968,595
Fair value of future MSR		19,151		19,151		21,600
Unearned discount		(4,204)		(4,204)		(3,276)
Loans held-for-sale, net		1,274,234		1,274,234		$ 986,919
Proceeds from Sale of Loans Held-for-sale, Excluding Acquisition		1,010,000	$ 1,220,000	4,330,000	$ 4,170,000
Gain on sale of loans held-for-sale, including fees		16,300	19,900	$ 86,100	60,600
Number of loans | loan				476		328
Subordinate class of certificates retained		167,005		$ 167,005		$ 140,124
Amortized cost of loans on nonaccrual status		0		0		0
Subsequent Event
Loans Held-for-Sale, Net
Proceeds from Sale of Loans Held-for-sale, Excluding Acquisition	$ 535,000
Subordinate class of certificates retained	$ 47,500
Greater than 90 Days Past Due
Loans Held-for-Sale, Net
Past Due		0		$ 0		0
US Government Sponsored-Enterprise Insured Loans
Loans Held-for-Sale, Net
Period of loans held for sale sold				60 days
Fannie Mae
Loans Held-for-Sale, Net
Loans held-for-sale, net		279,981		$ 279,981		679,342
Private Label
Loans Held-for-Sale, Net
Loans held-for-sale, net		761,098		$ 761,098		56,186
Period of loans held for sale sold				180 days
Proceeds from Sale of Loans Held-for-sale, Excluding Acquisition				$ 449,900	727,200
Freddie Mac
Loans Held-for-Sale, Net
Loans held-for-sale, net		108,589		108,589		180,004
FHA
Loans Held-for-Sale, Net
Loans held-for-sale, net		70,113		70,113		$ 53,063
SFR - Fixed Rate
Loans Held-for-Sale, Net
Loans held-for-sale, net		39,506		39,506
Proceeds from Sale of Loans Held-for-sale, Excluding Acquisition				75,300
Gain on sale of loans held-for-sale, including fees				$ 2,800
Number of loans | loan				23
Subordinate class of certificates retained		$ 38,200	$ 63,600	$ 38,200	$ 63,600

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Capitalized Mortgage Servicing Rights (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended		12 Months Ended
	Sep. 30, 2021	Sep. 30, 2020	Sep. 30, 2021	Sep. 30, 2020	Dec. 31, 2020
Capitalized Mortgage Servicing Rights
Balance at beginning of the year			$ 379,974
Balance at end of the year	$ 417,283		417,283		$ 379,974
MSRs
Capitalized Mortgage Servicing Rights
Balance at beginning of the year	418,653	$ 313,288	379,974	$ 286,420	286,420
Additions	22,387	37,403	99,397	97,554
Amortization	(14,872)	(12,416)	(43,744)	(36,129)
Write-downs and payoffs	(8,885)	(3,040)	(18,344)	(12,610)
Balance at end of the year	417,283	335,235	417,283	335,235	379,974
Prepayment fees collected	11,200	2,000	18,100	10,100
Valuation allowance	0		0		$ 0
Expected amortization of capitalized MSRs balances
2021 (three months ending 12/31/2021)	14,991		14,991
2022	57,963		57,963
2023	54,522		54,522
2024	51,072		51,072
2025	48,251		48,251
2026	44,235		44,235
Thereafter	146,249		146,249
Total	417,283		$ 417,283
MSRs | Minimum
Capitalized Mortgage Servicing Rights
Percentage of MSRs discount rate			8.00%
MSRs | Maximum
Capitalized Mortgage Servicing Rights
Percentage of MSRs discount rate			13.00%
MSRs | Weighted average
Capitalized Mortgage Servicing Rights
Percentage of MSRs discount rate			12.00%
Estimated life remaining			8 years 6 months		8 years 7 months 6 days
Originated MSRs
Capitalized Mortgage Servicing Rights
Balance at beginning of the year	383,063	260,452	$ 336,466	221,901	$ 221,901
Additions	22,387	37,403	99,397	97,554
Amortization	(12,345)	(8,811)	(35,221)	(24,425)
Write-downs and payoffs	(7,420)	(2,081)	(14,957)	(8,067)
Balance at end of the year	385,685	286,963	385,685	286,963	336,466
Acquired MSRs
Capitalized Mortgage Servicing Rights
Balance at beginning of the year	35,590	52,836	43,508	64,519	64,519
Additions	0		0
Amortization	(2,527)	(3,605)	(8,523)	(11,704)
Write-downs and payoffs	(1,465)	(959)	(3,387)	(4,543)
Balance at end of the year	$ 31,598	$ 48,272	$ 31,598	$ 48,272	$ 43,508

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Mortgage Servicing (Details) $ in Thousands	3 Months Ended		9 Months Ended		12 Months Ended
	Sep. 30, 2021 USD ($)	Sep. 30, 2020 USD ($)	Sep. 30, 2021 USD ($) state	Sep. 30, 2020 USD ($)	Dec. 31, 2020 USD ($) state
Fee-based servicing portfolio
Mortgage Servicing
Escrow Deposit	$ 1,780,000		$ 1,780,000		$ 1,290,000
MSRs
Mortgage Servicing
Unpaid principal balance of loans serviced	26,212,118		$ 26,212,118		$ 24,628,456
UPB Percentage of Total			100.00%
Weighted average servicing fee (as a percent)			0.457%		0.454%
Interest earned on total escrows	1,000	$ 1,300	$ 3,200	$ 5,800
MSRs | Fee-based servicing portfolio
Mortgage Servicing
UPB Percentage of Total			100.00%		100.00%
Number of states accounted for more than 4% of UPB and related servicing revenues | state			0		0
Escrow Deposit	767,200		$ 767,200		$ 867,600
Texas | MSRs | Fee-based servicing portfolio
Mortgage Servicing
UPB Percentage of Total			14.00%		16.00%
New York | MSRs | Fee-based servicing portfolio
Mortgage Servicing
UPB Percentage of Total			10.00%		9.00%
North Carolina | MSRs | Fee-based servicing portfolio
Mortgage Servicing
UPB Percentage of Total			9.00%		9.00%
California | MSRs | Fee-based servicing portfolio
Mortgage Servicing
UPB Percentage of Total			9.00%		9.00%
Florida | MSRs | Fee-based servicing portfolio
Mortgage Servicing
UPB Percentage of Total			6.00%		7.00%
Georgia | MSRs | Fee-based servicing portfolio
Mortgage Servicing
UPB Percentage of Total			6.00%		6.00%
New Jersey | MSRs | Fee-based servicing portfolio
Mortgage Servicing
UPB Percentage of Total			5.00%		4.00%
Other | MSRs | Fee-based servicing portfolio
Mortgage Servicing
UPB Percentage of Total			41.00%		40.00%
Fannie Mae
Mortgage Servicing
UPB Percentage of Total			74.00%
Fannie Mae | MSRs
Mortgage Servicing
Unpaid principal balance of loans serviced	19,271,527		$ 19,271,527		$ 18,268,268
Fannie Mae | MSRs | Fee-based servicing portfolio
Mortgage Servicing
UPB Percentage of Total					74.00%
Freddie Mac
Mortgage Servicing
UPB Percentage of Total			18.00%
Freddie Mac | MSRs
Mortgage Servicing
Unpaid principal balance of loans serviced	4,726,587		$ 4,726,587		$ 4,881,080
Freddie Mac | MSRs | Fee-based servicing portfolio
Mortgage Servicing
UPB Percentage of Total					20.00%
FHA
Mortgage Servicing
UPB Percentage of Total			4.00%
FHA | MSRs
Mortgage Servicing
Unpaid principal balance of loans serviced	933,519		$ 933,519		$ 752,116
FHA | MSRs | Fee-based servicing portfolio
Mortgage Servicing
UPB Percentage of Total					3.00%
Private Label
Mortgage Servicing
UPB Percentage of Total			4.00%
Private Label | MSRs
Mortgage Servicing
Unpaid principal balance of loans serviced	1,176,391		$ 1,176,391		$ 726,992
Private Label | MSRs | Fee-based servicing portfolio
Mortgage Servicing
UPB Percentage of Total					3.00%
SFR - Fixed Rate
Mortgage Servicing
UPB Percentage of Total			1.00%
SFR - Fixed Rate | MSRs
Mortgage Servicing
Unpaid principal balance of loans serviced	$ 104,094		$ 104,094

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Securities Held-to-Maturity (Details) $ in Thousands	3 Months Ended		9 Months Ended		12 Months Ended
	Sep. 30, 2021 USD ($)	Sep. 30, 2020 USD ($)	Sep. 30, 2021 USD ($) item	Sep. 30, 2020 USD ($)	Dec. 31, 2020 USD ($)	Jun. 30, 2021 USD ($)
Held-to-Maturity
Face Value	$ 167,005		$ 167,005		$ 140,124
Net Carrying Value	112,735		112,735		95,524
Unrealized Loss	(9,396)		(9,396)		(1,396)
Estimated Fair Value	122,131		122,131		94,128
Allowance for Credit Losses	1,761		1,761		1,644	$ 2,115
Sale of loans held-for-sale excluding acquired loans	1,010,000	$ 1,220,000	4,330,000	$ 4,170,000
Private Label
Held-to-Maturity
Sale of loans held-for-sale excluding acquired loans			449,900	$ 727,200
B Piece bonds
Held-to-Maturity
Face Value	65,137		65,137		76,497
Net Carrying Value	50,323		50,323		57,839
Unrealized Loss	(3,821)		(3,821)		(709)
Estimated Fair Value	54,144		54,144		58,548
Allowance for Credit Losses	446		$ 446		$ 621	547
B Piece bonds | Held-to-Maturity
Held-to-Maturity
Estimated weighted average remaining maturity period			5 years 9 months 18 days
Seven B Piece Bonds | Held-to-Maturity
Held-to-Maturity
Face Value	$ 106,200		$ 106,200
Bonds retained percentage			49.00%
Number of B Piece bonds | item			7
Discounted value of bonds purchased			$ 74,700
Remaining of B Piece bond sold to the third party at par	51.00%		51.00%
Agency B Piece Bonds | Held-to-Maturity
Held-to-Maturity
Weighted average variable interest rate (as a percent)	3.74%		3.74%		10.85%
Weighted average effective interest rate (as a percent)	11.17%		11.17%
Held-to-maturity securities, estimated fiscal year
Within one year	$ 11,300		$ 11,300
After one year through five years	30,100		30,100
After five years through ten years	8,200		8,200
After ten years	15,500		15,500
APL certificates
Held-to-Maturity
Face Value	101,868		101,868		$ 63,627
Net Carrying Value	62,412		62,412		37,685
Unrealized Loss	(5,575)		(5,575)		(2,105)
Estimated Fair Value	67,987		67,987		35,580
Allowance for Credit Losses	1,315		1,315		$ 1,023	$ 1,568
APL certificates | Held-to-Maturity
Held-to-Maturity
Face Value	101,900		101,900
Net Carrying Value	$ 61,700		$ 61,700
Weighted average variable interest rate (as a percent)	4.51%		4.51%
Estimated weighted average remaining maturity period			8 years 7 months 6 days
Securities maturity term			10 years
Weighted average fixed interest rate			9.65%		10.15%
Held-to-maturity securities, estimated fiscal year
After five years through ten years	$ 101,900		$ 101,900

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Securities Held-to-Maturity - Rollforward of Allowance (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2021	Sep. 30, 2020	Sep. 30, 2021	Sep. 30, 2020
Changes in the allowance for credit losses
Allowance for credit loss, Beginning balance	$ 2,115		$ 1,644
Provision for credit loss expense/(reversal)	(354)		117
Allowance for credit loss, Ending balance	1,761		1,761
Impairment of held-to maturity securities			0
Held-to-Maturity
Changes in the allowance for credit losses
Interest income (including the amortization of discount)	3,400	$ 2,900	9,400	$ 6,900
APL certificates
Changes in the allowance for credit losses
Allowance for credit loss, Beginning balance	1,568		1,023
Provision for credit loss expense/(reversal)	(253)		292
Allowance for credit loss, Ending balance	1,315		1,315
B Piece bonds
Changes in the allowance for credit losses
Allowance for credit loss, Beginning balance	547		621
Provision for credit loss expense/(reversal)	(101)		(175)
Allowance for credit loss, Ending balance	$ 446		$ 446

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Investments in Equity Affiliates - Summary (Details) - USD ($) $ in Thousands	Sep. 30, 2021	Dec. 31, 2020
Investment in Equity Affiliates
Investment in Equity Affiliates	$ 91,846	$ 74,274
UPB of Loans to Equity Affiliates	1,687
Arbor Residential Investor LLC
Investment in Equity Affiliates
Investment in Equity Affiliates	68,473	59,150
Tapestry on the River
Investment in Equity Affiliates
Investment in Equity Affiliates	3,410
Emerson at Forney
Investment in Equity Affiliates
Investment in Equity Affiliates	3,000
AMAC Holdings III LLC
Investment in Equity Affiliates
Investment in Equity Affiliates	12,223	10,308
North Vermont Avenue
Investment in Equity Affiliates
Investment in Equity Affiliates	2,420	2,496
Lightstone Value Plus REIT L.P.
Investment in Equity Affiliates
Investment in Equity Affiliates	1,895	1,895
JT Prime
Investment in Equity Affiliates
Investment in Equity Affiliates	425	$ 425
West Shore Cafe
Investment in Equity Affiliates
UPB of Loans to Equity Affiliates	$ 1,687

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Investments in Equity Affiliates - Operations (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2021	Sep. 30, 2020	Sep. 30, 2021	Sep. 30, 2020
Statements of Income:
Total revenues	$ 69,578	$ 76,930	$ 229,549	$ 145,958
Total expenses	48,615	35,727	154,365	222,489
Net income	$ 86,064	$ 97,721	251,431	83,455
Arbor Residential Investor LLC
Statements of Income:
Total revenues			935,444	1,171,796
Total expenses			722,882	790,454
Net income			$ 212,562	$ 381,342

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Investments in Equity Affiliates - All Investments (Details) - USD ($) $ in Thousands	1 Months Ended	3 Months Ended				9 Months Ended
	Jan. 31, 2021	Sep. 30, 2021	Jun. 30, 2021	Mar. 31, 2021	Sep. 30, 2020	Sep. 30, 2021	Sep. 30, 2020
Investment in Equity Affiliates
Income from equity affiliates		$ 5,086			$ 32,358	$ 32,095	$ 56,758
Indirect ownership percentage						9.20%
Arbor Residential Investor LLC
Investment in Equity Affiliates
Income from equity affiliates		5,400			32,300	$ 32,700	56,100
Distribution received		4,700			$ 15,000	23,400	$ 15,000
Indirect ownership percentage	12.30%
AMAC Holdings III LLC
Investment in Equity Affiliates
Income from equity affiliates		(400)				(900)
Distribution received		1,700
Equity investment made						30,000
Equity Investment		16,300				16,300
Century Summerfield Apartments
Investment in Equity Affiliates
Income from equity affiliates			$ 200
Distribution received			$ 17,200
Equity investment made				$ 17,000
Equity Investment				$ 20,000
Percentage of ownership interest of related party in the entity				50.00%
Tapestry on the River
Investment in Equity Affiliates
Distribution received		10,600
Equity investment made		$ 14,000
Percentage of ownership interest of related party in the entity		48.90%
Emerson at Forney
Investment in Equity Affiliates
Equity investment made		$ 3,000
Percentage of ownership interest of related party in the entity		11.10%
Lexford Portfolio
Investment in Equity Affiliates
Equity investment made						$ 4,500

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Debt Obligations, Credit and Repurchase Facilities (Details) - USD ($) $ in Thousands			1 Months Ended		9 Months Ended
	Mar. 31, 2021	Feb. 28, 2021	Sep. 30, 2021	Mar. 31, 2021	Sep. 30, 2021	Aug. 31, 2021	May 31, 2021	Dec. 31, 2020
Debt Obligations
Debt Carrying Value			$ 3,399,711		$ 3,399,711			$ 2,234,883
Collateral Carrying Value			$ 4,261,595		$ 4,261,595			2,724,420
Weighted Average Note Rate (as a percent)			2.18%		2.18%
Joint Repurchase Facility
Debt Obligations
Maximum borrowing capacity			$ 2,000,000		$ 2,000,000
Maximum advance rate					80.00%
Fixed interest rate (as a percent)			5.75%		5.75%
Committed amount					$ 50,000
Repurchase facility - securities | B Piece bonds
Debt Obligations
Collateral Carrying Value			$ 50,300		50,300			58,500
Repurchase facility - securities | SFR - Fixed Rate
Debt Obligations
Debt Carrying Value								10,000
Structured Business
Debt Obligations
Debt Carrying Value			2,297,225		2,297,225			1,282,845
Collateral Carrying Value			$ 3,040,333		$ 3,040,333			1,755,825
Weighted Average Note Rate (as a percent)			2.35%		2.35%
Unamortized deferred finance costs			$ 3,900		$ 3,900			$ 3,300
Maximum borrowing capacity			$ 725,000		$ 725,000
Weighted average note rate including certain fees and costs (as a percent)			2.53%		2.53%			2.97%
Leverage on loans and investment portfolio financed through credit facilities and repurchase agreements, excluding securities repurchase facility, working capital line of credit and security agreements used to finance leasehold and capital expenditure improvements at corporate office (as a percent)			75.00%		75.00%			69.00%
Structured Business | LIBOR
Debt Obligations
Maximum advance rate					1.75%
LIBOR Floor rate					0.35%
Decreased borrowing capacity			$ 250,000		$ 250,000
Decrease in interest rate (as a percent)					0.35%
Utilization of credit facility					$ 250,000
Structured Business | Minimum | LIBOR
Debt Obligations
LIBOR Floor rate					0.35%
Line of Credit Facility, Interest Rate at Period End			2.00%		2.00%
Structured Business | Maximum | LIBOR
Debt Obligations
Decrease in interest rate (as a percent)					2.00%
Line of Credit Facility, Interest Rate at Period End			2.20%		2.20%
Structured Business | $1.25B joint repurchase facility
Debt Obligations
Debt Carrying Value			$ 1,068,118		$ 1,068,118			$ 681,006
Collateral Carrying Value			$ 1,449,400		$ 1,449,400			1,054,562
Weighted Average Note Rate (as a percent)			2.32%		2.32%
Maximum borrowing capacity								1,250,000
Structured Business | $725M repurchase facility
Debt Obligations
Debt Carrying Value			$ 343,511		$ 343,511			191,622
Collateral Carrying Value			$ 484,880		$ 484,880			259,559
Weighted Average Note Rate (as a percent)			2.08%		2.08%
Maximum borrowing capacity			$ 400,000		$ 400,000			725,000
Structured Business | $450M repurchase facility
Debt Obligations
Debt Carrying Value			211,118		211,118
Collateral Carrying Value			$ 270,396		$ 270,396
Weighted Average Note Rate (as a percent)			1.97%		1.97%
Maximum borrowing capacity						$ 450,000		450,000
Structured Business | $225M credit facility
Debt Obligations
Debt Carrying Value			$ 14,403		$ 14,403			23,606
Collateral Carrying Value			$ 21,755		$ 21,755			31,809
Weighted Average Note Rate (as a percent)			3.90%		3.90%
Maximum borrowing capacity			$ 225,000		$ 225,000			225,000
LIBOR Floor rate			1.10%
Structured Business | $200M credit facility
Debt Obligations
Debt Carrying Value			$ 146,878		146,878			39,346
Collateral Carrying Value			$ 197,468		$ 197,468			47,912
Weighted Average Note Rate (as a percent)			2.14%		2.14%
Maximum borrowing capacity						$ 200,000		200,000
Structured Business | $200M credit facility | LIBOR | Independent living facilities
Debt Obligations
Fixed interest rate (as a percent)						2.20%
Structured Business | $200M credit facility | LIBOR | Assisted living facilities
Debt Obligations
Fixed interest rate (as a percent)						2.45%
Structured Business | $200M credit facility | Multifamily senior mortgage loans | LIBOR
Debt Obligations
Fixed interest rate (as a percent)						1.50%
Structured Business | $200M repurchase facility
Debt Obligations
Debt Carrying Value			$ 110,592		$ 110,592			31,780
Collateral Carrying Value			$ 148,021		$ 148,021			40,551
Weighted Average Note Rate (as a percent)			1.86%		1.86%
Maximum borrowing capacity	$ 200,000			$ 200,000				200,000
Structured Business | $200M repurchase facility | LIBOR
Debt Obligations
Maximum advance rate				80.00%
Structured Business | $200M repurchase facility | Minimum | LIBOR
Debt Obligations
Fixed interest rate (as a percent)	1.75%			1.75%
Structured Business | $200M repurchase facility | Maximum | LIBOR
Debt Obligations
Fixed interest rate (as a percent)	2.75%			2.75%
Structured Business | $198.7M repurchase facility
Debt Obligations
Debt Carrying Value			$ 167,106		$ 167,106			71,627
Collateral Carrying Value			$ 197,804		$ 197,804			87,242
Weighted Average Note Rate (as a percent)			3.04%		3.04%
Maximum borrowing capacity								198,700
Structured Business | 164.4M loan specific credit facilities
Debt Obligations
Debt Carrying Value			$ 164,232		$ 164,232			148,615
Collateral Carrying Value			$ 218,950		$ 218,950			198,550
Weighted Average Note Rate (as a percent)			3.01%		3.01%
Maximum borrowing capacity								164,400
Structured Business | $100M credit facility
Debt Obligations
Debt Carrying Value			$ 3,246		$ 3,246
Collateral Carrying Value			$ 4,878		$ 4,878
Weighted Average Note Rate (as a percent)			4.06%		4.06%
Maximum borrowing capacity						$ 100,000		100,000
Structured Business | $50M credit facility
Debt Obligations
Debt Carrying Value	$ 50,000		$ 22,407	$ 50,000	$ 22,407			15,992
Collateral Carrying Value			$ 28,485		$ 28,485			21,300
Weighted Average Note Rate (as a percent)			2.11%		2.11%
Maximum borrowing capacity								50,000
Structured Business | $30M working capital facility
Debt Obligations
Debt Carrying Value								30,000
Maximum borrowing capacity								30,000
Structured Business | $25M credit facility
Debt Obligations
Debt Carrying Value			$ 12,623		$ 12,623			9,323
Collateral Carrying Value			$ 18,296		$ 18,296			14,340
Weighted Average Note Rate (as a percent)			2.36%		2.36%
Maximum borrowing capacity								25,000
Structured Business | $1M master security agreements
Debt Obligations
Debt Carrying Value			$ 790		$ 790			1,441
Weighted Average Note Rate (as a percent)			4.01%		4.01%
Maximum borrowing capacity								1,000
Structured Business | Repurchase facilities - securities (3)
Debt Obligations
Debt Carrying Value			$ 32,201		$ 32,201			38,487
Weighted Average Note Rate (as a percent)			3.38%		3.38%
Structured Business | $150M credit facility
Debt Obligations
Collateral Carrying Value	$ 150,000			150,000
LIBOR Floor rate	0.15%
Structured Business | $100 million repurchase facility
Debt Obligations
Maximum borrowing capacity			$ 100,000		$ 100,000
Structured Business | $200 million repurchase facility
Debt Obligations
Maximum borrowing capacity			200,000		200,000
Structured Business | $250M repurchase facility
Debt Obligations
Maximum borrowing capacity							$ 250,000
Structured Business | $21.6 million credit facility
Debt Obligations
Fixed interest rate (as a percent)		3.00%
Committed amount		$ 21,600
Structured Business | 18.2 million credit facility
Debt Obligations
Maximum borrowing capacity	$ 18,200			$ 18,200
Structured Business | 18.2 million credit facility | Prime Rate
Debt Obligations
LIBOR Floor rate				3.25%
Agency Business
Debt Obligations
Debt Carrying Value			1,102,486		1,102,486			952,038
Collateral Carrying Value			$ 1,221,262		$ 1,221,262			968,595
Weighted Average Note Rate (as a percent)			1.83%		1.83%
Unamortized deferred finance costs			$ 1,600		$ 1,600			600
Agency Business | $200M credit facility
Debt Obligations
Debt Carrying Value			108,533		108,533			294,732
Collateral Carrying Value			$ 108,635		$ 108,635			296,698
Weighted Average Note Rate (as a percent)			1.60%		1.60%
Maximum borrowing capacity								200,000
Agency Business | $100M credit facility | Minimum | LIBOR
Debt Obligations
Fixed interest rate (as a percent)						0.15%
Agency Business | $100M credit facility | Maximum | LIBOR
Debt Obligations
Fixed interest rate (as a percent)						1.30%
Agency Business | $50M credit facility
Debt Obligations
Debt Carrying Value			$ 1,275		$ 1,275			88,896
Collateral Carrying Value			$ 1,275		$ 1,275			88,911
Weighted Average Note Rate (as a percent)			1.38%		1.38%
Maximum borrowing capacity						$ 100,000		50,000
Decreased borrowing capacity						$ 50,000
Agency Business | $750M ASAP agreement
Debt Obligations
Debt Carrying Value			$ 176,261		$ 176,261			301,455
Collateral Carrying Value			$ 176,264		$ 176,264			302,491
Weighted Average Note Rate (as a percent)			1.40%		1.40%
Maximum borrowing capacity								750,000
Agency Business | $750M joint repurchase facility
Debt Obligations
Debt Carrying Value			$ 642,652		$ 642,652			42,808
Collateral Carrying Value			$ 761,098		$ 761,098			56,186
Weighted Average Note Rate (as a percent)			2.06%		2.06%
Maximum borrowing capacity								750,000
Agency Business | $400M repurchase facility
Debt Obligations
Debt Carrying Value			$ 169,406		$ 169,406			174,515
Collateral Carrying Value			$ 169,409		$ 169,409			174,555
Weighted Average Note Rate (as a percent)			1.58%		1.58%
Maximum borrowing capacity								400,000
Agency Business | $150M credit facility
Debt Obligations
Debt Carrying Value			$ 3,100		$ 3,100			49,632
Collateral Carrying Value			$ 3,100		$ 3,100			49,754
Weighted Average Note Rate (as a percent)			1.43%		1.43%
Maximum borrowing capacity	$ 150,000		$ 150,000	$ 150,000	$ 150,000			150,000
LIBOR Floor rate	0.0025%
Variable rate, spread (as a percent)	0.002%
Additional borrowing capacity	$ 200,000			$ 200,000
Agency Business | $150M credit facility | LIBOR
Debt Obligations
Fixed interest rate (as a percent)			1.35%		1.35%
Agency Business | $1.3M repurchase facility
Debt Obligations
Debt Carrying Value			$ 1,259		$ 1,259
Collateral Carrying Value			$ 1,481		$ 1,481
Weighted Average Note Rate (as a percent)			3.00%		3.00%
Maximum borrowing capacity								$ 1,300

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Debt Obligations, Collateralized Loan Obligations (Details) $ in Thousands				1 Months Ended		9 Months Ended
	Sep. 30, 2021 USD ($) item tranche	Jun. 30, 2021 USD ($) item tranche	Mar. 31, 2021 USD ($) tranche item	Sep. 30, 2021 USD ($)	Mar. 31, 2021 USD ($)	Sep. 30, 2021 USD ($)	Sep. 30, 2020 USD ($)	Dec. 31, 2020 USD ($)
Debt Obligations
Debt, Face Value	$ 1,115,750			$ 1,115,750		$ 1,115,750		$ 670,750
Debt, Carrying Value	$ 4,715,804			$ 4,715,804		$ 4,715,804		2,517,309
Weighted average note rate (as a percent)	2.18%			2.18%		2.18%
Payoffs and paydowns of collateralized loan obligations						$ 356,150	$ 282,874
CLOs
Debt Obligations
Debt, Face Value	$ 4,743,580			$ 4,743,580		4,743,580		2,532,343
Debt, Carrying Value	$ 4,715,804			$ 4,715,804		$ 4,715,804		$ 2,517,309
Weighted average note rate (as a percent)	1.49%			1.49%		1.49%		1.60%
Restricted cash related to interest payments, delayed funding and expenses	$ 52,600			$ 52,600		$ 52,600		$ 49,500
Collateral Loans, Unpaid Principal	5,138,126			5,138,126		5,138,126		2,932,791
Collateral Loans, Carrying Value	5,119,520			5,119,520		5,119,520		2,932,791
Cash, Restricted Cash	500,129			500,129		500,129		138,683
Deferred financing fees	$ 27,800			$ 27,800		$ 27,800		$ 15,000
Weighted average note rate including certain fees and costs (as a percent)	1.79%			1.79%		1.79%		1.93%
CLO 16
Debt Obligations
Number of tranches of CLO notes issued | tranche	8
Number of newly-formed wholly-owned subsidiaries | item	2
Value of the tranches issued	$ 1,370,000			$ 1,370,000		$ 1,370,000
Debt, Face Value	1,237,500			1,237,500		1,237,500
Debt, Carrying Value	$ 1,229,631			$ 1,229,631		$ 1,229,631	$ 135,000
Weighted average note rate (as a percent)	1.41%			1.41%		1.41%
Collateral Loans, Unpaid Principal	$ 1,147,056			$ 1,147,056		$ 1,147,056
Collateral Loans, Carrying Value	1,140,662			1,140,662		1,140,662
Cash, Restricted Cash	312,984			$ 312,984		312,984
Replacement period				2 years 6 months
Proceeds from issuance of collateralized loan obligations for acquiring additional loan obligations	$ 313,000
Maximum period to acquire additional loan obligations	180 days
Notional amount of residual interest retained	$ 262,500			$ 262,500		262,500
Value of portfolio loans as collateral	1,190,000			1,190,000		1,190,000
Face value of loan obligations will be owned by the issuer	$ 1,500,000			$ 1,500,000		$ 1,500,000
Leverage (as a percent)	83.00%			83.00%		83.00%
CLO 16 | One-month LIBOR
Debt Obligations
Weighted average note rate including certain fees and costs (as a percent)	1.31%			1.31%		1.31%
CLO 16 | Below investment grade
Debt Obligations
Notional amount of residual interest retained	$ 135,000			$ 135,000		$ 135,000
CLO 15
Debt Obligations
Number of tranches of CLO notes issued | tranche		8
Number of newly-formed wholly-owned subsidiaries | item		2
Value of the tranches issued		$ 747,800
Debt, Face Value	674,412			674,412		674,412
Debt, Carrying Value	$ 669,272			$ 669,272		$ 669,272
Weighted average note rate (as a percent)	1.47%			1.47%		1.47%
Collateral Loans, Unpaid Principal	$ 796,612			$ 796,612		$ 796,612
Collateral Loans, Carrying Value	792,770			792,770		$ 792,770
Replacement period						2 years 6 months
Proceeds from issuance of collateralized loan obligations for acquiring additional loan obligations		$ 162,000
Maximum period to acquire additional loan obligations		180 days
Notional amount of residual interest retained		$ 140,600
Value of portfolio loans as collateral		653,000
Face value of loan obligations will be owned by the issuer		$ 815,000
Leverage (as a percent)		83.00%
CLO 15 | One-month LIBOR
Debt Obligations
Weighted average note rate including certain fees and costs (as a percent)		1.37%
CLO 15 | Investment grade
Debt Obligations
Debt, Face Value		$ 674,400
CLO 15 | Below investment grade
Debt Obligations
Debt, Carrying Value		73,400
Notional amount of residual interest retained		$ 73,400
CLO 14
Debt Obligations
Number of tranches of CLO notes issued | tranche			8
Number of newly-formed wholly-owned subsidiaries | item			2
Value of the tranches issued			$ 724,200		$ 724,200
Debt, Face Value	655,475			655,475		$ 655,475
Debt, Carrying Value	$ 650,531			$ 650,531		$ 650,531
Weighted average note rate (as a percent)	1.43%			1.43%		1.43%
Collateral Loans, Unpaid Principal	$ 724,633			$ 724,633		$ 724,633
Collateral Loans, Carrying Value	722,221			722,221		722,221
Cash, Restricted Cash	42,341			42,341		42,341
Replacement period					2 years 6 months
Proceeds from issuance of collateralized loan obligations for acquiring additional loan obligations			$ 149,800
Maximum period to acquire additional loan obligations			180 days
Notional amount of residual interest retained			$ 129,500		$ 129,500
Value of portfolio loans as collateral			635,200		635,200
Face value of loan obligations will be owned by the issuer			$ 785,000		$ 785,000
Leverage (as a percent)			84.00%		84.00%
CLO 14 | One-month LIBOR
Debt Obligations
Weighted average note rate including certain fees and costs (as a percent)			1.33%		1.33%
CLO 14 | Investment grade
Debt Obligations
Debt, Face Value			$ 655,500		$ 655,500
CLO 14 | Below investment grade
Debt Obligations
Debt, Carrying Value			68,700		68,700
Notional amount of residual interest retained			$ 68,700		68,700
CLO 13
Debt Obligations
Debt, Face Value	668,000			668,000		668,000		$ 668,000
Debt, Carrying Value	$ 664,700			$ 664,700		$ 664,700		$ 663,804
Weighted average note rate (as a percent)	1.52%			1.52%		1.52%		1.58%
Collateral Loans, Unpaid Principal	$ 767,167			$ 767,167		$ 767,167		$ 768,664
Collateral Loans, Carrying Value	765,158			765,158		765,158		768,664
Cash, Restricted Cash	26,182			26,182		26,182		43
CLO 12
Debt Obligations
Debt, Face Value	534,193			534,193		534,193		534,193
Debt, Carrying Value	$ 531,616			$ 531,616		$ 531,616		$ 530,673
Weighted average note rate (as a percent)	1.60%			1.60%		1.60%		1.66%
Collateral Loans, Unpaid Principal	$ 601,231			$ 601,231		$ 601,231		$ 628,935
Collateral Loans, Carrying Value	599,879			599,879		599,879		628,935
Cash, Restricted Cash	25,764			25,764		25,764		2,005
CLO 11
Debt Obligations
Debt, Face Value	533,000			533,000		533,000		533,000
Debt, Carrying Value	$ 530,785			$ 530,785		$ 530,785		$ 529,859
Weighted average note rate (as a percent)	1.54%			1.54%		1.54%		1.61%
Collateral Loans, Unpaid Principal	$ 592,829			$ 592,829		$ 592,829		$ 555,157
Collateral Loans, Carrying Value	591,484			591,484		591,484		555,157
Cash, Restricted Cash	53,347			53,347		53,347		92,395
CLO 10
Debt Obligations
Debt, Face Value	441,000			441,000		441,000		441,000
Debt, Carrying Value	$ 439,269			$ 439,269		$ 439,269		$ 438,442
Weighted average note rate (as a percent)	1.55%			1.55%		1.55%		1.61%
Collateral Loans, Unpaid Principal	$ 508,598			$ 508,598		$ 508,598		$ 522,132
Collateral Loans, Carrying Value	507,346			507,346		507,346		522,132
Cash, Restricted Cash	$ 39,511			$ 39,511		$ 39,511		25,537
CLO 9
Debt Obligations
Debt, Face Value								356,150
Debt, Carrying Value								$ 354,531
Weighted average note rate (as a percent)								1.53%
Collateral Loans, Unpaid Principal								$ 457,903
Collateral Loans, Carrying Value								457,903
Cash, Restricted Cash								$ 18,703
Payoffs and paydowns of collateralized loan obligations					356,200
Deferred fees expensed as interest expense					$ 1,400

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Debt Obligations, Senior Unsecured Notes, Summary (Details) - USD ($) $ in Thousands	9 Months Ended
	Sep. 30, 2021	Aug. 31, 2021	Jun. 30, 2021	Apr. 30, 2021	Dec. 31, 2020
Debt Obligations
UPB	$ 1,115,750				$ 670,750
Wtd. Avg Rate	2.18%
Senior Unsecured Notes
Debt Obligations
UPB	$ 1,115,750				670,750
Carrying value	$ 1,102,578				$ 662,843
Wtd. Avg Rate	5.05%				5.29%
Deferred financing fees	$ 13,200				$ 7,900
Weighted average note rate including certain fees and costs (as a percent)	5.36%				5.65%
5.00% Convertible Notes
Debt Obligations
UPB	$ 175,000
Carrying value	$ 172,148
Wtd. Avg Rate	5.00%
Interest rate (as a percent)			5.00%		5.00%
8.00% Notes and 4.50% Notes | Redeemed prior to three months before the maturity date
Debt Obligations
Redemption of aggregate principal amount (as a percent)	100.00%
8.00% Notes and 4.50% Notes | Redeemed three months prior to or after the maturity date
Debt Obligations
Redemption of aggregate principal amount (as a percent)	100.00%
8.00% Convertible Notes
Debt Obligations
UPB	$ 70,750				$ 70,750
Carrying value	$ 70,099				$ 69,793
Wtd. Avg Rate	8.00%				8.00%
Interest rate (as a percent)			8.00%		8.00%
4.50% Convertible Notes
Debt Obligations
UPB	$ 270,000	$ 270,000
Carrying value	$ 265,938
Wtd. Avg Rate	4.50%
Interest rate (as a percent)		4.50%	4.50%		4.50%
4.50% Senior Unsecured Notes
Debt Obligations
UPB	$ 275,000				$ 275,000
Carrying value	$ 272,356				$ 271,994
Wtd. Avg Rate	4.50%				4.50%
Senior Unsecured 4.75% Notes, 5.75% Notes and 5.625% Notes | Redeemed at any time prior to the redemption date, at a maturity price
Debt Obligations
Redemption of aggregate principal amount (as a percent)	100.00%
Senior Unsecured 4.75% Notes, 5.75% Notes and 5.625% Notes | Redeemed on or after the maturity date
Debt Obligations
Redemption of aggregate principal amount (as a percent)	100.00%
4.75% Notes
Debt Obligations
UPB	$ 110,000				$ 110,000
Carrying value	$ 108,930				$ 108,668
Wtd. Avg Rate	4.75%				4.75%
Interest rate (as a percent)			4.75%		4.75%
5.75% Convertible Notes
Debt Obligations
UPB	$ 90,000				$ 90,000
Carrying value	$ 89,038				$ 88,751
Wtd. Avg Rate	5.75%				5.75%
Interest rate (as a percent)			5.75%		5.75%
5.625% Notes
Debt Obligations
UPB	$ 125,000				$ 125,000
Carrying value	$ 124,069				$ 123,637
Wtd. Avg Rate	5.63%				5.63%
Interest rate (as a percent)	5.625%				5.625%
5.00% senior unsecured notes
Debt Obligations
UPB				$ 175,000
Interest rate (as a percent)				5.00%

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Debt Obligations, Convertible Senior Unsecured Notes (Details)	1 Months Ended			3 Months Ended		6 Months Ended	9 Months Ended		12 Months Ended
	Aug. 31, 2021 USD ($)	Jul. 31, 2021 USD ($) shares	Apr. 30, 2021 USD ($)	Sep. 30, 2021 USD ($) $ / shares	Sep. 30, 2020 USD ($)	Jun. 30, 2021 USD ($)	Sep. 30, 2021 USD ($) $ / shares shares	Sep. 30, 2020 USD ($)	Dec. 31, 2020 USD ($)	Dec. 31, 2019 USD ($) $ / shares
Debt Obligations
Junior subordinated notes				$ 1,115,750,000			$ 1,115,750,000		$ 670,750,000
Cash paid for the exchange of convertible notes							14,300,000	$ 22,145,000
Loss on extinguishment of debt					$ (1,868,000)		(1,370,000)	(3,546,000)
Total				9,682,898,000			9,682,898,000
Convertible Senior Unsecured Notes
Debt Obligations
Junior subordinated notes				264,000,000			$ 264,000,000		$ 278,300,000
Proceeds received, net of estimated issuance costs										$ 34,000,000.0
Percentage of the Notes required to be repurchased if the agreement is fundamentally changed							100.00%
Maturity period (in years)							1 year 1 month 2 days		1 year 9 months 7 days
Unamortized Debt Discount				3,275,000			$ 3,275,000		$ 5,636,000
Unamortized Deferred Financing Fees				2,724,000			2,724,000		4,691,000
Total				258,001,000			258,001,000		267,973,000
Net Carrying Value, Equity Component							9,962,000		$ 9,962,000
Interest expense				4,500,000	4,800,000		14,100,000	14,800,000
Interest expense related to cash coupon				3,100,000	3,300,000		9,700,000	10,000,000.0
Debt discount				800,000	800,000		2,400,000	2,500,000
Deferred fees expensed as interest expense				$ 600,000	$ 700,000		$ 2,000,000.0	$ 2,300,000
Cost of the notes (as a percent)				6.71%			6.71%		6.75%
8.00% Convertible Notes
Debt Obligations
Junior subordinated notes				$ 70,750,000			$ 70,750,000		$ 70,750,000
Interest rate (as a percent)						8.00%			8.00%
4.50% Convertible Notes
Debt Obligations
Junior subordinated notes	$ 270,000,000.0			270,000,000			270,000,000
Proceeds from issued debt	$ 265,800,000
Interest rate (as a percent)	4.50%					4.50%			4.50%
5.25% Convertible Notes
Debt Obligations
Junior subordinated notes		$ 14,300,000
Interest rate (as a percent)		5.25%								5.25%
Cash paid for the exchange of convertible notes		$ 14,300,000					$ 233,100,000			$ 228,700,000
Common stock exchanged (in shares) | shares		386,459					4,478,315
4.75% Convertible Notes
Debt Obligations
Junior subordinated notes				$ 1,000			$ 1,000			$ 264,000,000.0
Interest rate (as a percent)				4.75%			4.75%			4.75%
Proceeds received, net of estimated issuance costs										$ 256,500,000
Conversion rate of the notes to common stock, per $1,000 principal amount of notes							56.6847
Conversion price per share of common stock | $ / shares				$ 17.64			$ 17.64
4.75% Convertible Notes | First Offering
Debt Obligations
Junior subordinated notes										$ 1,000
Conversion rate of the notes to common stock, per $1,000 principal amount of notes										56.1695
Conversion price per share of common stock | $ / shares										$ 17.80
5.75% Convertible Notes
Debt Obligations
Junior subordinated notes				$ 90,000,000			$ 90,000,000		$ 90,000,000
Interest rate (as a percent)						5.75%			5.75%
5.00% Convertible Notes
Debt Obligations
Junior subordinated notes				175,000,000			175,000,000
Proceeds from issued debt			$ 172,300,000
Interest rate (as a percent)						5.00%			5.00%
Junior subordinated notes
Debt Obligations
Junior subordinated notes				$ 154,336,000			$ 154,336,000		$ 154,336,000
Deferred fees expensed as interest expense						$ 1,800,000			$ 1,800,000

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Debt Obligations, Junior Subordinated Notes (Details) - USD ($) $ in Thousands	6 Months Ended	12 Months Ended
	Jun. 30, 2021	Dec. 31, 2020	Sep. 30, 2021
Debt Obligations
Debt carrying value		$ 141,656	$ 142,192
Weighted average note rate (as a percent)			2.18%
Junior subordinated notes
Debt Obligations
Debt carrying value		141,700	$ 142,200
Deferred amount Due at maturity		10,800	$ 10,400
Deferred fees expensed as interest expense	$ 1,800	$ 1,800
Weighted average note rate (as a percent)		3.06%	2.95%
Weighted average note rate including certain fees and costs (as a percent)		3.15%	3.03%

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Debt Obligations, Debt Covenants (Details) - USD ($)	1 Months Ended					9 Months Ended
	Oct. 31, 2021	Jul. 31, 2021	Apr. 30, 2021	Jan. 31, 2021	Oct. 31, 2020	Sep. 30, 2021
CLO 10
Debt Covenants
Current overcollateralization ratio (as a percent)	126.98%	126.98%	126.98%	126.98%	126.98%	126.98%
Limit overcollateralization ratio (as a percent)						125.98%
Current interest coverage ratio (as a percent)						350.15%
Limit interest coverage ratio (as a percent)						120.00%
CLO 11
Debt Covenants
Current overcollateralization ratio (as a percent)	121.95%	121.95%	121.95%	121.95%	121.95%	121.95%
Limit overcollateralization ratio (as a percent)						120.95%
Current interest coverage ratio (as a percent)						400.85%
Limit interest coverage ratio (as a percent)						120.00%
CLO 12
Debt Covenants
Current overcollateralization ratio (as a percent)	118.87%	118.87%	118.87%	118.87%	118.87%	118.87%
Limit overcollateralization ratio (as a percent)						117.87%
Current interest coverage ratio (as a percent)						302.20%
Limit interest coverage ratio (as a percent)						120.00%
CLO 13
Debt Covenants
Current overcollateralization ratio (as a percent)	119.76%	119.76%	119.76%	119.76%	119.76%	119.76%
Limit overcollateralization ratio (as a percent)						118.76%
Current interest coverage ratio (as a percent)						391.59%
Limit interest coverage ratio (as a percent)						120.00%
CLO 14
Debt Covenants
Current overcollateralization ratio (as a percent)	119.76%	119.76%	119.76%			119.76%
Limit overcollateralization ratio (as a percent)						118.76%
Current interest coverage ratio (as a percent)						368.75%
Limit interest coverage ratio (as a percent)						120.00%
CLO 15
Debt Covenants
Current overcollateralization ratio (as a percent)	120.85%	120.85%				120.85%
Limit overcollateralization ratio (as a percent)						119.85%
Current interest coverage ratio (as a percent)						334.86%
Limit interest coverage ratio (as a percent)						120.00%
CLO 16
Debt Covenants
Current overcollateralization ratio (as a percent)	121.21%					121.21%
Limit overcollateralization ratio (as a percent)						120.21%
Current interest coverage ratio (as a percent)						472.24%
Limit interest coverage ratio (as a percent)						120.00%
Junior subordinated notes
Debt Covenants
Amount payable on default of senior debt						$ 0

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Allowance for Loss-Sharing Obligations (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended		12 Months Ended
	Sep. 30, 2021	Sep. 30, 2020	Sep. 30, 2021	Sep. 30, 2020	Dec. 31, 2020
Roll forward of loss contingency accrual
Provisions for loss sharing	$ (3,272)	$ (2,227)	$ (1,070)	$ 21,706
Guarantee obligations	34,400	33,200	34,400	33,200
Fannie Mae
Roll forward of loss contingency accrual
Allowance for loss sharing obligations	28,400		$ 28,400		$ 30,300
Loss-sharing obligations (as a percent)			0.15%		0.17%
Loss-Sharing Obligation
Roll forward of loss contingency accrual
Outstanding advances under the Fannie Mae DUS program	100		$ 100		$ 100
Loss-Sharing Obligation | Fannie Mae
Roll forward of loss contingency accrual
Beginning balance of the period	65,645	73,220	64,303	34,648	34,648
Provisions for loss sharing	(3,022)	(2,031)	(557)	22,538
Provisions reversal for loan repayments	(250)	(196)	(513)	(832)
Recoveries (charge-offs) , net	455	167	(405)	400
Ending balance of the period	62,828	$ 71,160	62,828	71,160	64,303
Maximum quantifiable liability	$ 3,620,000		$ 3,620,000		3,410,000
Loss-Sharing Obligation | Fannie Mae | Impact of adopting CECL
Roll forward of loss contingency accrual
Beginning balance of the period				$ 14,406	$ 14,406

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Derivative Financial Instruments, Agency Business (Details) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2021 USD ($) item	Sep. 30, 2020 USD ($)	Sep. 30, 2021 USD ($) item	Sep. 30, 2020 USD ($)	Dec. 31, 2020 USD ($) item
Derivative Financial Instruments
Net (losses) gains from changes in the fair value of derivatives	$ (8,600)	$ (900)	$ 7,500	$ 3,300
(Loss) gain on derivative instruments	(1,492)	(753)	(7,320)	(58,852)
Other Income
Derivative Financial Instruments
(Loss) gain on derivative instruments	32,500	42,400	95,700	96,700
Rate lock commitments
Derivative Financial Instruments
Notional value	68,797		68,797
Forward Sale Commitments
Derivative Financial Instruments
Notional value	527,480		$ 527,480
Swaps
Derivative Financial Instruments
Derivative, maturity term			3 months
Derivative swap default credit.			5 years
Swaps | Minimum
Derivative Financial Instruments
Derivative Swap Rate Period			5 years
Swaps | Maximum
Derivative Financial Instruments
Derivative Swap Rate Period			10 years
Swaps | Agency Business | Other Income
Derivative Financial Instruments
Realized gain (loss) on derivatives	(5,400)	(100)		(57,300)
Unrealized gain (loss) on derivatives	(1,900)	100		(1,500)
Swaps | Structured Business | Other Income
Derivative Financial Instruments
Realized gain (loss) on derivatives		(200)	$ 1,100	(3,000)
Unrealized gain (loss) on derivatives		$ 400	(1,500)	$ (100)
Non-Qualifying | Agency Business
Derivative Financial Instruments
Notional value	790,777		790,777		$ 1,230,417
Fair Value, classified in Other Assets	2,196		2,196		3,892
Fair Value, classified in Other Liabilities	$ (8,253)		$ (8,253)		$ (1,221)
Non-Qualifying | Rate lock commitments | Agency Business
Derivative Financial Instruments
Count | item	12		12		7
Notional value	$ 68,797		$ 68,797		$ 136,354
Fair Value, classified in Other Assets	707		707		1,967
Fair Value, classified in Other Liabilities	$ (1,369)		$ (1,369)		$ (231)
Non-Qualifying | Forward Sale Commitments | Agency Business
Derivative Financial Instruments
Count | item	45		45		114
Notional value	$ 527,480		$ 527,480		$ 1,048,763
Fair Value, classified in Other Assets	1,489		1,489		1,925
Fair Value, classified in Other Liabilities	$ (6,884)		$ (6,884)		$ (990)
Non-Qualifying | Swaps | Agency Business
Derivative Financial Instruments
Count | item	1,945		1,945		453
Notional value	$ 194,500		$ 194,500		$ 45,300

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Fair Value, Carrying Value and Estimated Fair Value (Details) - USD ($) $ in Thousands	9 Months Ended
	Sep. 30, 2021	Dec. 31, 2020
Financial assets:
Loans and investments, net - Principal/Notional Amount	$ 9,169,007	$ 5,475,082
Loans and investments, net	8,993,790	5,285,868
Loans held-for-sale, net - Principal/Notional Amount	1,259,287	968,595
Loans held-for-sale, net	1,259,287	968,595
Securities, held-to-maturity, net - Principal/Notional Amount	167,005	140,124
Securities held-to-maturity, net	112,735	95,524
Derivative financial instruments - Principal/Notional Amount	77,242	865,975
Financial liabilities:
Credit and repurchase facilities, Principal/Notional Amount	3,405,232	2,238,722
Credit and repurchase facilities, Carrying value	3,399,711	2,234,883
Collateralized loan obligations	4,715,804	2,517,309
Senior unsecured notes	1,102,578	662,843
Convertible senior unsecured notes, net	258,001	267,973
Junior subordinated notes	142,192	141,656
Debt instrument - Principal/Notional Amount	1,115,750	670,750
Derivative financial instruments - Principal/Notional Amount	$ 519,035	319,142
Minimum
Financial liabilities:
Period of loans held for sale sold	60 days
Maximum
Financial liabilities:
Period of loans held for sale sold	180 days
Carrying Value
Financial assets:
Loans and investments, net	$ 8,993,790	5,285,868
Loans held-for-sale, net	1,274,234	986,919
Capitalized mortgage servicing rights, net	417,283	379,974
Securities held-to-maturity, net	112,735	95,524
Derivative financial instruments	2,196	3,892
Financial liabilities:
Credit and repurchase facilities, Carrying value	3,399,711	2,234,883
Collateralized loan obligations	4,715,804
Senior unsecured notes	1,102,578
Convertible senior unsecured notes, net	258,001
Junior subordinated notes	142,192
Derivative financial instruments	8,253	1,221
Fair Value
Financial assets:
Loans and investments, net	9,202,924	5,428,141
Loans held-for-sale, net	1,309,556	1,007,294
Capitalized mortgage servicing rights, net	473,679	415,495
Securities held-to-maturity, net	122,131	94,128
Derivative financial instruments	2,196	3,892
Financial liabilities:
Credit and repurchase facilities, Carrying value	3,399,579	2,235,668
Collateralized loan obligations	4,744,351
Senior unsecured notes	1,134,816
Convertible senior unsecured notes, net	296,472
Junior subordinated notes	101,169
Derivative financial instruments	8,253	1,221
CLOs
Financial liabilities:
Collateralized loan obligations	4,715,804	2,517,309
Debt instrument - Principal/Notional Amount	4,743,580	2,532,343
Collateralized Debt Obligations | Carrying Value
Financial liabilities:
Collateralized loan obligations	4,715,804	2,517,309
Collateralized Debt Obligations | Fair Value
Financial liabilities:
Collateralized loan obligations	4,744,351	2,495,195
Senior Unsecured Notes
Financial liabilities:
Debt instrument - Principal/Notional Amount	1,115,750	670,750
Senior Unsecured Notes | Carrying Value
Financial liabilities:
Debt instrument - Principal/Notional Amount	1,102,578	662,843
Senior Unsecured Notes | Fair Value
Financial liabilities:
Debt instrument - Principal/Notional Amount	1,134,816	670,117
Convertible Senior Unsecured Notes
Financial liabilities:
Debt instrument - Principal/Notional Amount	264,000	278,300
Convertible Senior Unsecured Notes | Carrying Value
Financial liabilities:
Debt instrument - Principal/Notional Amount	258,001	267,973
Convertible Senior Unsecured Notes | Fair Value
Financial liabilities:
Debt instrument - Principal/Notional Amount	296,472	280,636
Junior subordinated notes
Financial liabilities:
Junior subordinated notes	142,200	141,700
Debt instrument - Principal/Notional Amount	154,336	154,336
Junior subordinated notes | Carrying Value
Financial liabilities:
Debt instrument - Principal/Notional Amount	142,192	141,656
Junior subordinated notes | Fair Value
Financial liabilities:
Debt instrument - Principal/Notional Amount	$ 101,169	$ 99,594

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Fair Value, Measurement on Recurring and Nonrecurring Basis (Details) $ in Thousands, shares in Millions	Sep. 30, 2021 USD ($) item shares	Dec. 31, 2020 USD ($)
Financial assets:
Impaired loans, net	$ 161,012	$ 254,938
Allowance for credit losses on impaired loans	$ 94,886	106,265
Number of impaired loans | item	8
Aggregate carrying value, before reserves | shares	161.0
Carrying Value
Financial assets:
Derivative financial instruments	$ 2,196	3,892
Financial liabilities:
Derivative financial instruments	8,253	1,221
Fair Value
Financial assets:
Derivative financial instruments	2,196	3,892
Financial liabilities:
Derivative financial instruments	8,253	$ 1,221
Recurring basis | Carrying Value
Financial assets:
Derivative financial instruments	2,196
Financial liabilities:
Derivative financial instruments	8,253
Recurring basis | Fair Value
Financial assets:
Derivative financial instruments	2,196
Financial liabilities:
Derivative financial instruments	8,253
Nonrecurring basis | Carrying Value
Financial assets:
Impaired loans, net	66,126
Nonrecurring basis | Fair Value
Financial assets:
Impaired loans, net	66,126
Level 2 | Recurring basis
Financial assets:
Derivative financial instruments	1,489
Financial liabilities:
Derivative financial instruments	8,253
Level 3 | Recurring basis
Financial assets:
Derivative financial instruments	707
Level 3 | Nonrecurring basis
Financial assets:
Impaired loans, net	$ 66,126

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Fair Value, Level 3 Inputs (Details) - Level 3 $ in Thousands	Sep. 30, 2021 USD ($) item
Land
Quantitative information about Level 3 fair value measurements
Impaired loans, fair value | $	$ 50,000
Land | Discount rate
Quantitative information about Level 3 fair value measurements
Impaired loans, measurement input	21.50
Land | Revenue growth rate
Quantitative information about Level 3 fair value measurements
Impaired loans, measurement input	3.00
Retail
Quantitative information about Level 3 fair value measurements
Impaired loans, fair value | $	$ 15,530
Retail | Discount rate
Quantitative information about Level 3 fair value measurements
Impaired loans, measurement input	10.15
Retail | Capitalization rate
Quantitative information about Level 3 fair value measurements
Impaired loans, measurement input	9.25
Retail | Revenue growth rate
Quantitative information about Level 3 fair value measurements
Impaired loans, measurement input	1.68
Office
Quantitative information about Level 3 fair value measurements
Impaired loans, fair value | $	$ 596
Office | Discount rate
Quantitative information about Level 3 fair value measurements
Impaired loans, measurement input	11.00
Office | Capitalization rate
Quantitative information about Level 3 fair value measurements
Impaired loans, measurement input	9.00
Office | Revenue growth rate
Quantitative information about Level 3 fair value measurements
Impaired loans, measurement input	2.50
Rate lock commitments
Quantitative information about Level 3 fair value measurements
Derivative financial instruments | $	$ 707
Derivative Asset, Valuation Technique [Extensible List]	us-gaap:ValuationTechniqueDiscountedCashFlowMember
Derivative Asset, Measurement Input [Extensible List]	Discount rate
Rate lock commitments | Discount rate
Quantitative information about Level 3 fair value measurements
Derivative financial instruments measurement input	9.56

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Fair Value, Level 3 Derivative Instruments (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2021	Sep. 30, 2020	Sep. 30, 2021	Sep. 30, 2020
Derivative assets
Beginning balance	$ 124	$ 549	$ 1,967	$ 1,066
Settlements	(23,412)	(40,746)	(81,486)	(95,614)
Realized gains recorded in earnings	23,288	40,197	79,519	94,548
Unrealized gains recorded in earnings	707	2,160	707	2,160
Ending balance	$ 707	$ 2,160	$ 707	$ 2,160

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Fair Value, Components of fair value and other relevant information (Details) $ in Thousands	9 Months Ended
	Sep. 30, 2021 USD ($)
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Fair Value of Servicing Rights	$ 19,858
Total Fair Value Adjustment	19,858
Rate lock commitments
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Notional/Principal Amount	68,797
Fair Value of Servicing Rights	707
Interest Rate Movement Effect	(1,369)
Total Fair Value Adjustment	(662)
Forward Sale Commitments
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Notional/Principal Amount	527,480
Interest Rate Movement Effect	1,369
Total Fair Value Adjustment	1,369
Loans held-for-sale, net
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Notional/Principal Amount	1,259,287
Fair Value of Servicing Rights	19,151
Total Fair Value Adjustment	$ 19,151

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Fair Value, Financial Assets and Liabilities (Details) - USD ($) $ in Thousands	Sep. 30, 2021	Dec. 31, 2020
Financial assets:
Loans and investments, net	$ 8,993,790	$ 5,285,868
Loans held-for-sale, net	1,259,287	968,595
Securities held-to-maturity, net	112,735	95,524
Financial liabilities:
Credit and repurchase facilities, Carrying value	3,399,711	2,234,883
Collateralized loan obligations	4,715,804	2,517,309
Senior unsecured notes	1,102,578	662,843
Convertible senior unsecured notes, net	258,001	267,973
Junior subordinated notes	142,192	141,656
Level 1
Financial liabilities:
Senior unsecured notes	1,134,816
Level 2
Financial assets:
Loans held-for-sale, net	1,290,405
Financial liabilities:
Credit and repurchase facilities, Carrying value	1,102,486
Convertible senior unsecured notes, net	296,472
Level 3
Financial assets:
Loans and investments, net	9,202,924
Loans held-for-sale, net	19,151
Capitalized mortgage servicing rights, net	473,679
Securities held-to-maturity, net	122,131
Financial liabilities:
Credit and repurchase facilities, Carrying value	2,297,093
Collateralized loan obligations	4,744,351
Junior subordinated notes	101,169
Carrying Value
Financial assets:
Loans and investments, net	8,993,790	5,285,868
Loans held-for-sale, net	1,274,234	986,919
Capitalized mortgage servicing rights, net	417,283
Securities held-to-maturity, net	112,735	95,524
Financial liabilities:
Credit and repurchase facilities, Carrying value	3,399,711	2,234,883
Collateralized loan obligations	4,715,804
Senior unsecured notes	1,102,578
Convertible senior unsecured notes, net	258,001
Junior subordinated notes	142,192
Fair Value
Financial assets:
Loans and investments, net	9,202,924	5,428,141
Loans held-for-sale, net	1,309,556	1,007,294
Capitalized mortgage servicing rights, net	473,679
Securities held-to-maturity, net	122,131	94,128
Financial liabilities:
Credit and repurchase facilities, Carrying value	3,399,579	$ 2,235,668
Collateralized loan obligations	4,744,351
Senior unsecured notes	1,134,816
Convertible senior unsecured notes, net	296,472
Junior subordinated notes	$ 101,169

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Commitments and Contingencies, Contractual Commitments (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2021	Sep. 30, 2020	Sep. 30, 2021	Sep. 30, 2020	Dec. 31, 2020	Dec. 31, 2019
Agency Business Commitments
Cash collateral	$ 569,928	$ 110,263	$ 569,928	$ 110,263	$ 197,470	$ 210,875
Debt Obligations
2021 (three months ending December 31, 2021)	1,426,798		1,426,798
2022	2,991,831		2,991,831
2023	1,652,679		1,652,679
2024	1,178,993		1,178,993
2025	497,701		497,701
2026	1,473,359		1,473,359
Thereafter	461,537		461,537
Total	9,682,898		9,682,898
Minimum Annual Operating Lease Payments
2021 (three months ending December 31, 2021)	2,127		2,127
2022	8,257		8,257
2023	8,031		8,031
2024	7,926		7,926
2025	7,978		7,978
2026	8,282		8,282
Thereafter	26,098		26,098
Total	68,699		68,699
Total
2021	1,428,925		1,428,925
2022	3,000,088		3,000,088
2023	1,660,710		1,660,710
2024	1,186,919		1,186,919
2025	505,679		505,679
2026	1,481,641		1,481,641
Thereafter	487,635		487,635
Total	9,751,597		9,751,597
Operating lease expense	2,400	$ 1,500	7,000	$ 4,600
Unfunded CLO Commitments
Unfunded commitments related to structured loans and investments	638,100		638,100		$ 353,800
Fannie Mae
Agency Business Commitments
Minimum liquid assets to be maintained to meet operational liquidity requirements	19,000		$ 19,000
Period of funding for collateral requirement			48 months
Forward Contracts
Agency Business Commitments
Period of contractual commitment			60 days
Restricted liquidity arrangement - loans sold under the Fannie Mae DUS program | Fannie Mae
Agency Business Commitments
Letter of credit assigned	45,000		$ 45,000
Cash collateral	17,000		17,000
Reserve required to fund additional restricted liquidity over the next 48 months	46,100		$ 46,100
Period of additional funding for collateral requirement			48 months
Cash collateral arrangement - purchase and loss obligations under Freddie Mac's SBL Program
Agency Business Commitments
Cash collateral per securitization	5,000		$ 5,000
Outstanding letters of credit	$ 5,000		$ 5,000

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Commitments and Contingencies, Litigation (Details) $ in Millions		1 Months Ended
	Jun. 15, 2011 USD ($) lawsuit defendant	Aug. 31, 2020 USD ($) defendant lawsuit	Jun. 30, 2013 USD ($) lawsuit defendant	Jun. 30, 2011 defendant lawsuit
Arbor ESH II, LLC
Litigation
Investments in the Series A1 Preferred Units of a holding company of Extended Stay, Inc. | $	$ 115.0
Lawsuits filed by Extended Stay Litigation Trust (the Trust)
Litigation
Number of lawsuits or complaints filed | lawsuit				3
Number of lawsuits filed in United States Bankruptcy Court | lawsuit				2
Number of defendants				73
Number of defendants who are corporate and partnership entities				55
Number of defendants named in a legal action who are individuals				18
Number of counts dismissed | lawsuit		9
Number of counts dismissed against defendant entities		4
Total LIBOR Floor Certificate transfers | $		$ 74.0
Total possible liability against directors | $		$ 139.0
Lawsuits filed by Extended Stay Litigation Trust (the Trust) | Fiduciary Duty Claims
Litigation
Number of lawsuits or complaints filed | lawsuit	2
Number of defendants	2
Lawsuits filed by Extended Stay Litigation Trust (the Trust) | Motion to amend the lawsuits
Litigation
Number of lawsuits consolidated | lawsuit			1
Number of defendants who are corporate and partnership entities			16
Number of defendants named in a legal action who are individuals			10
Number of defendants removed due to consolidation of lawsuits			47
Number of defendants related to the entity			0
Number of defendants remaining due to consolidation of lawsuits			26
Number of lawsuits before amendment | lawsuit			100
Number of lawsuits after amendment | lawsuit			17
Aggregate amount which the Trust would be seeking from the affiliates of the entity | $			$ 139.0
Lawsuits filed by Extended Stay Litigation Trust (the Trust) | Arbor ESH II, LLC
Litigation
Number of lawsuits or complaints filed | lawsuit	1

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Variable Interest Entity (Details) $ in Thousands	9 Months Ended
	Sep. 30, 2021 USD ($) item	Jun. 30, 2021 USD ($)	Dec. 31, 2020 USD ($)	Sep. 30, 2020 USD ($)	Jun. 30, 2020 USD ($)	Dec. 31, 2019 USD ($)
Assets:
Restricted cash	$ 569,928		$ 197,470	$ 110,263		$ 210,875
Loans and investments, net	8,993,790		5,285,868
Other assets	214,441		183,529
Total assets	12,169,584		7,660,986
Liabilities:
Collateralized loan obligations	4,715,804		2,517,309
Other liabilities	255,135		197,644
Total liabilities	10,034,177		6,178,301
Loan loss reserves related to VIEs	131,534	$ 138,447	148,329	$ 146,745	$ 152,811
Consolidated variable interest entities
Assets:
Total assets	5,706,553		3,134,447
Liabilities:
Total liabilities	$ 4,721,526		2,520,064
Unconsolidated VIEs
Liabilities:
Number of VIEs where the reporting entity is not VIE's primary beneficiary and VIEs have variable interest | item	29
Carrying amount of loans and investments before reserves related to VIEs	$ 612,283
Exposure to real estate debt	4,010,000
CLOs | Consolidated variable interest entities
Assets:
Restricted cash	552,705		188,226
Loans and investments, net	5,119,520		2,923,634
Other assets	34,328		22,587
Total assets	5,706,553		3,134,447
Liabilities:
Collateralized loan obligations	4,715,804		2,517,309
Other liabilities	5,722		2,755
Total liabilities	4,721,526		$ 2,520,064
Loans | Unconsolidated VIEs
Liabilities:
Carrying amount of loans and investments before reserves related to VIEs	482,495
Carrying amount of loans and investments related to VIE's	130,000
Loan loss reserves related to VIEs	79,400
APL certificates | Unconsolidated VIEs
Liabilities:
Carrying amount of loans and investments before reserves related to VIEs	63,727
B Piece bonds | Unconsolidated VIEs
Liabilities:
Carrying amount of loans and investments before reserves related to VIEs	50,769
Equity investments | Unconsolidated VIEs
Liabilities:
Carrying amount of loans and investments before reserves related to VIEs	14,644
Agency interest only strips | Unconsolidated VIEs
Liabilities:
Carrying amount of loans and investments before reserves related to VIEs	$ 648

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Equity (Details) $ / shares in Units, $ in Thousands											1 Months Ended						3 Months Ended			9 Months Ended		12 Months Ended
	Oct. 30, 2026	Oct. 29, 2026	Oct. 27, 2021 $ / shares	Oct. 01, 2021 $ / shares	Jul. 28, 2021 $ / shares	Jul. 02, 2021 $ / shares	May 05, 2021 $ / shares	Apr. 30, 2021 $ / shares	Feb. 17, 2021 $ / shares	Feb. 01, 2021 $ / shares	Oct. 31, 2021 USD ($) shares	Aug. 31, 2021 USD ($) $ / shares shares	Jul. 31, 2021 USD ($) shares	Jun. 30, 2021 USD ($) $ / shares shares	Apr. 30, 2021 USD ($) shares	Mar. 31, 2021 USD ($) $ / shares shares	Sep. 30, 2021 Vote $ / shares shares	Mar. 31, 2021 $ / shares shares	Sep. 30, 2020 $ / shares shares	Sep. 30, 2021 USD ($) Vote item $ / shares shares	Sep. 30, 2020 USD ($) $ / shares shares	Dec. 31, 2020 $ / shares	Oct. 31, 2026 $ / shares	Dec. 31, 2019
Common stock
Proceeds from issuance of shares under public offering																				$ 342,618	$ 78,550
Repurchase of common stock																				(23,460)	(12,761)
Redemption of operating partnership units																				$ 21,110	$ 31,255
Noncontrolling Interest
Preferred stock, par value (in dollars per share) | $ / shares																	$ 0.01			$ 0.01		$ 0.01
Distributions
Cash dividend declared (in dollars per share) | $ / shares																	$ 0.35		$ 0.31	$ 1.02	$ 0.91
Preferred Stock
Proceeds from issuance of preferred stock																				$ 361,471	$ 0
Chief Executive Officer | 2021 Annual incentive agreement
Subsequent event
Annual base salary															$ 1,200
Annual cash payment															800
Annual performance cash bonus at target performance															2,900
Annual performance cash bonus at threshold performance															1,500
Annual performance cash bonus at maximum performance.															4,400
Additional annual performance cash bonus in the event of extraordinary performance															700
Restricted common stock
Deferred Compensation
Shares withheld for taxes | shares																				183,144
Restricted common stock | Board of Directors | 2020 Plan
Deferred Compensation
Grants during the period (in shares) | shares																				27,864
Restricted common stock | Employees
Deferred Compensation
Grants during the period (in shares) | shares																				351,807
Total grant date fair value																				$ 5,800
Restricted common stock | Employees | 2020 Plan
Deferred Compensation
Grants during the period (in shares) | shares																				115,047
Total grant date fair value																				$ 1,900
Vesting percentage																33.00%
Restricted common stock | Employees | First anniversaries | 2020 Plan
Deferred Compensation
Grants during the period (in shares) | shares																				99,952
Total grant date fair value																				$ 1,700
Restricted common stock | Employees | Second anniversaries | 2020 Plan
Deferred Compensation
Grants during the period (in shares) | shares																				87,265
Total grant date fair value																				$ 1,400
Restricted common stock | Employees | Third anniversaries | 2020 Plan
Deferred Compensation
Grants during the period (in shares) | shares																				25,479
Total grant date fair value																				$ 400
Restricted common stock | Employees | Fourth anniversaries | 2020 Plan
Deferred Compensation
Grants during the period (in shares) | shares																				24,064
Total grant date fair value																				$ 400
Performance-based restricted stock | Chief Executive Officer
Deferred Compensation
Restricted stock vested during period (in shares) | shares																		448,980
Number of shares issued in net settlement | shares																		229,083
Acquisition Related Grant | Chief Executive Officer | 2021 Annual incentive agreement
Subsequent event
Grant value															$ 3,000
Acquisition Related Grant | Chief Executive Officer | Third anniversaries | 2021 Annual incentive agreement
Deferred Compensation
Vesting percentage															100.00%
Time Based Vesting Equity Award | Chief Executive Officer | 2021 Annual incentive agreement
Deferred Compensation
Grants during the period (in shares) | shares													165,746		184,729
Total grant date fair value													$ 3,000		$ 3,100
Vesting period (in years)															3 years
Restricted stock vested during period (in shares) | shares																	294,985
Restricted stock vested during period, net settled (in shares) | shares																	150,530
Subsequent event
Grant value															$ 3,000
Performance Based TSR Equity Award | Chief Executive Officer | 2021 Annual incentive agreement
Deferred Compensation
Vesting period (in years)															5 years
Subsequent event
Grant value															$ 12,000
8.25% Series A preferred stock
Preferred Stock
Return on the preferred shares issued to third parties by its subsidiary REIT (as a percent)																				8.25%		8.25%
7.75% Series B preferred stock
Preferred Stock
Return on the preferred shares issued to third parties by its subsidiary REIT (as a percent)																				7.75%		7.75%
8.50% Series C preferred stock
Preferred Stock
Return on the preferred shares issued to third parties by its subsidiary REIT (as a percent)																				8.50%		8.50%
6.25% Series E preferred stock
Preferred Stock
Return on the preferred shares issued to third parties by its subsidiary REIT (as a percent)																	6.25%			6.25%		6.25%
Common Stock
Common stock
Issued price per share (in dollars per share) | $ / shares														$ 18.46		$ 15.48		$ 15.48
Number of common stock sold (in shares) | shares																	800,000		3,579,266	20,222,879	6,887,274
Proceeds from issuance of shares under public offering																$ 12,400
Number of shares purchased | shares														600,000						1,399,999	1,625,777
Repurchase of common stock														$ 11,100						$ (14)	$ (16)
Distributions
Cash dividend declared (in dollars per share) | $ / shares			$ 0.36		$ 0.35		$ 0.34		$ 0.33
Common Stock | Chief Executive Officer
Common stock
Number of shares purchased | shares																800,000
Common Stock | Board of Directors | 2020 Plan
Deferred Compensation
Total grant date fair value																				$ 400
Common Stock | 6.25% Series E preferred stock
Common stock
Number of common stock sold (in shares) | shares																	0
Preferred Stock | 8.25% Series A preferred stock
Distributions
Cash dividend declared on redeemable preferred stock (in dollars per share) | $ / shares								$ 0.515625		$ 0.515625
Preferred Stock | 7.75% Series B preferred stock
Distributions
Cash dividend declared on redeemable preferred stock (in dollars per share) | $ / shares								0.484375		0.484375
Preferred Stock | 8.50% Series C preferred stock
Distributions
Cash dividend declared on redeemable preferred stock (in dollars per share) | $ / shares								$ 0.53125		$ 0.53125
Preferred Stock | 6.375% Series D preferred stock
Distributions
Cash dividend declared on redeemable preferred stock (in dollars per share) | $ / shares				$ 0.3984375		$ 0.256771
Preferred Stock
Preferred stock, redemption amount														$ 93,300
Preferred Stock | 6.25% Series E preferred stock
Common stock
Number of common stock sold (in shares) | shares																	5,750,000			5,750,000
Distributions
Cash dividend declared on redeemable preferred stock (in dollars per share) | $ / shares				$ 0.34288
Total Arbor Realty Trust, Inc. Stockholders' Equity
Common stock
Repurchase of common stock																				$ (23,460)	$ (12,761)
Operating Partnership Units
Noncontrolling Interest
Conversion ratio for operating partnership units to common stock shares																				1
Operating Partnership Units | Special voting preferred shares
Noncontrolling Interest
Preferred stock, par value (in dollars per share) | $ / shares																	$ 0.01			$ 0.01
Number of vote per share of Special Voting Preferred Shares | Vote																	1			1
OP units outstanding (in shares) | shares																	16,325,095			16,325,095
Voting power of outstanding stock (as a percent)																				10.20%
5.25% Convertible Notes
Common stock
Interest rate (as a percent)													5.25%											5.25%
Public offering | Common Stock
Common stock
Number of common stock sold (in shares) | shares														6,000,000		7,000,000
Proceeds from issuance of shares under public offering														$ 110,600		$ 108,200
Public offering | Preferred Stock | 6.375% Series D preferred stock
Preferred Stock
Issuance of preferred stock (in shares) | shares														9,200,000
Return on the preferred shares issued to third parties by its subsidiary REIT (as a percent)														6.375%
Preferred stock, liquidation preference (in dollars per share) | $ / shares														$ 25.00
Proceeds from issuance of preferred stock														$ 222,600
Public offering | Preferred Stock | 6.25% Series E preferred stock
Preferred Stock
Issuance of preferred stock (in shares) | shares												5,750,000
Return on the preferred shares issued to third parties by its subsidiary REIT (as a percent)												6.25%
Preferred stock, liquidation preference (in dollars per share) | $ / shares												$ 25.00
Proceeds from issuance of preferred stock												$ 139,100
Public offering | Subsequent Event | Preferred Stock
Preferred Stock
Issuance of preferred stock (in shares) | shares											8,050,000
Public offering | Subsequent Event | Preferred Stock | 6.25% Series F preferred stock
Preferred Stock
Return on the preferred shares issued to third parties by its subsidiary REIT (as a percent)											6.25%
Preferred stock, liquidation preference (in dollars per share) | $ / shares																							$ 25.00
Preferred stock dividend, fixed rate		6.25%
Preferred stock dividend, spread on Floating rate	5.442%
Proceeds from issuance of preferred stock											$ 194,800
Percentage of dividend paid to common stock and preferred stock shareholders represented ordinary income to our stockholders	6.125%
At-The-Market | Common Stock
Common stock
Number of shares available under an "At-The-Market" equity offering with JMP Securities LLC | shares																	19,200,000			19,200,000
Number of common stock sold (in shares) | shares												20,000,000								7,222,879
Proceeds from issuance of shares under public offering																				$ 123,800
Redemption of operating partnership units																				$ 21,100
Number of ACM's members from whom the OP units redeemed | item																				2

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Equity, Earnings Per Share ("EPS") (Details) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2021	Sep. 30, 2020	Sep. 30, 2021	Sep. 30, 2020
Basic
Net income attributable to common stockholders (1)	$ 72,804	$ 81,997	$ 211,409	$ 66,778
Net income attributable to common stockholders and noncontrolling interest	$ 72,804	$ 81,997	$ 211,409	$ 66,778
Weighted average shares outstanding (in shares)	142,624,300	113,766,446	134,437,663	111,775,436
Weighted average shares outstanding (in shares)	142,624,300	113,766,446	134,437,663	111,775,436
Net income per common share (in dollars per share)	$ 0.51	$ 0.72	$ 1.57	$ 0.60
Diluted
Net income attributable to common stockholders	$ 72,804	$ 81,997	$ 211,409	$ 66,778
Net income attributable to noncontrolling interest	8,347	13,836	26,806	11,012
Net income attributable to common stockholders and noncontrolling interest	$ 81,151	$ 95,833	$ 238,215	$ 77,790
Weighted average shares outstanding (in shares)	142,624,300	113,766,446	134,437,663	111,775,436
Dilutive effect of OP Units (in shares)	16,351,643	19,196,660	16,985,073	19,993,983
Dilutive effect of restricted stock units (in shares)	940,045	1,029,668	927,542	600,648
Dilutive effect of convertible notes (in shares)	354,917	4,313	341,183	31,248
Weighted average shares outstanding ( in shares)	160,270,905	133,997,087	152,691,461	132,401,315
Net income per common share (in dollars per share)	$ 0.51	$ 0.72	$ 1.56	$ 0.59
Mr. Ivan Kaufman | Performance-based restricted stock
Diluted
Vesting period (in years)	4 years	4 years	4 years	4 years

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Income Taxes (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2021	Sep. 30, 2020	Sep. 30, 2021	Sep. 30, 2020
Income Tax Contingency [Line Items]
Provision for (benefit) from income taxes	$ 9,905	$ 17,785	$ 33,356	$ 15,493
Deferred tax provision (benefit)		3,900	10,692	(5,172)
Current tax provision	3,600	$ 13,900	$ 22,700	$ 20,700
Maximum
Income Tax Contingency [Line Items]
Deferred tax provision (benefit)	$ (6,300)
Minimum
Income Tax Contingency [Line Items]
Federal income tax rate (as a percent)			90.00%

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Agreements and Transactions with Related Parties - Shared Services Agreement (Details) - USD ($) $ in Millions	3 Months Ended		9 Months Ended
	Sep. 30, 2021	Sep. 30, 2020	Sep. 30, 2021	Sep. 30, 2020
Former manager | Support Services and Seconded Employees
Agreements and transactions with related parties
Costs for services to related party	$ 0.8	$ 0.6	$ 2.4	$ 1.8

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Agreements and Transactions with Related Parties - Other Related Party (Details) $ in Thousands	1 Months Ended									3 Months Ended		9 Months Ended		12 Months Ended
	Mar. 31, 2021 USD ($)	Jan. 31, 2021	Dec. 31, 2020 USD ($)	Oct. 31, 2020 USD ($)	Aug. 31, 2020 USD ($)	Mar. 31, 2020 USD ($) property	Sep. 30, 2019 USD ($)	Jan. 31, 2019 USD ($)	Jun. 30, 2018 USD ($) property loan	Sep. 30, 2021 USD ($) item shares	Sep. 30, 2020 USD ($)	Sep. 30, 2021 USD ($) item shares	Sep. 30, 2020 USD ($)	Dec. 31, 2019 USD ($) loan	Dec. 31, 2018 USD ($)	Dec. 31, 2017 USD ($) item loan property	Dec. 31, 2016 USD ($) property shares	Dec. 31, 2015 USD ($)	Jul. 31, 2019 USD ($)	Jun. 30, 2019 USD ($)
Agreements and transactions with related parties
Due to related party			$ 2,365							$ 4,384		$ 4,384
Due from related parties			12,449							12,664		12,664
Investment made												$ 5,174,313	$ 1,425,051
Indirect ownership percentage												9.20%
(Income) loss from equity affiliates										(5,086)	$ (32,358)	$ (32,095)	(56,758)
Single-Family Rental
Agreements and transactions with related parties
Investment made			3,500
Operating Partnership Units | Special voting preferred shares
Agreements and transactions with related parties
Number of preferred stock shares paired with each OP units | shares												1
Preferred equity investments
Agreements and transactions with related parties
Equity investment										7,800		$ 7,800
Preferred equity investments | Single-Family Rental
Agreements and transactions with related parties
Investment made				$ 4,600
Bridge loans
Agreements and transactions with related parties
Principal amount										35,000		35,000
Bridge loans | Single-Family Rental
Agreements and transactions with related parties
Loan committed			$ 32,500	$ 30,500								2,300
Bridge loans | Preferred equity interest financing agreement
Agreements and transactions with related parties
Interest income recorded										300	300	1,000	1,700
Bridge Loan Several Multifamily Properties [Member]
Agreements and transactions with related parties
Principal amount															$ 37,500
Percentage of ownership interest of related party in the entity															85.00%
Bridge Loan Six Multifamily Properties [Member]
Agreements and transactions with related parties
UPB converted to a mezzanine loan								$ 2,000
Bridge Loan Six Multifamily Properties [Member] | Maturity Date September 2019 [Member]
Agreements and transactions with related parties
Principal amount																	$ 12,900
Lexford Portfolio | Maturity date of March 2030 | Private Label
Agreements and transactions with related parties
Principal amount						$ 34,600
Fixed rate of interest (as a percent)						3.30%
Lexford Portfolio | Bridge loans | Maturity Date Of June 2021 [Member]
Agreements and transactions with related parties
Paydowns of principal made by borrower														$ 250,000
Base spread (as a percent)									4.00%
Unsecured financing provided by an unsecured lender to certain parent entities of the property owners										50,000		50,000
ACM, Certain executives and Consortium of independent outside investors | Mature date of April 2030 | Private Label
Agreements and transactions with related parties
Principal amount						$ 14,800
Fixed rate of interest (as a percent)						3.10%
ACM, Certain executives and Consortium of independent outside investors | Mezzanine loans | Mature date of April 2030
Agreements and transactions with related parties
Number of properties owned | property						2
Percentage of ownership interest of related party in the entity						50.00%
Interest income recorded										100
Equity investment						$ 3,400
Fixed rate of interest (as a percent)						9.00%
ACM, Certain executives and Consortium of independent outside investors | Mezzanine loans | Mature date of April 2030 | Maximum
Agreements and transactions with related parties
Interest income recorded											100		300
ACM, Certain executives and Consortium of independent outside investors | Mezzanine loans | Maturity date of March 2030
Agreements and transactions with related parties
Interest income recorded												200
ACM, Certain executives and Consortium of independent outside investors | AMAC III
Agreements and transactions with related parties
Amount invested										16,200		16,200								$ 30,000
Ownership interest (as a percent)																				18.00%
Interest income recorded										300		900	1,600
Loss on investment										400	100	900	600
ACM, Certain executives and Consortium of independent outside investors | AMAC III | Private Label
Agreements and transactions with related parties
Percentage of ownership interest of related party in the entity														100.00%
Fixed rate of interest (as a percent)														3.735%
Amount of loan to related party														$ 15,600
ACM / Our "Former Manager" | Residential Mortgage Banking Company
Agreements and transactions with related parties
Interest income recorded										5,400	32,300	32,700	56,100
Noncontrolling interest in equity method investment acquired (as a percent)																		50.00%
Indirect ownership percentage		12.30%																22.50%
Acquisition purchase price																		$ 9,600
Cash distribution received										$ 4,700		$ 23,400
ACM / Our "Former Manager" | ACM Acquisition
Agreements and transactions with related parties
Number of preferred stock shares paired with each OP units | shares																	1
Number of shares held by related party | shares										2,828,629		2,828,629
OP units hold as part of acquisition | shares												10,665,530
Aggregate percentage of voting power held by related party										8.50%		8.50%
Consortium of investors including other unaffiliated investors, certain of officers and chief executive officer | Bridge Loan Several Multifamily Properties [Member]
Agreements and transactions with related parties
Principal amount															$ 19,500
Base spread (as a percent)															4.00%
Interest income recorded												$ 900
Consortium of investors including other unaffiliated investors, certain of officers and chief executive officer | Bridge Loan Several Multifamily Properties [Member] | LIBOR
Agreements and transactions with related parties
Base spread (as a percent)															2.125%
Consortium of investors including other unaffiliated investors, certain of officers and chief executive officer | Bridge Loan Several Multifamily Properties [Member] | Multifamily
Agreements and transactions with related parties
Interest income recorded											300
Consortium of investors including other unaffiliated investors, certain of officers and chief executive officer | Bridge Loan One Multifamily Property [Member]
Agreements and transactions with related parties
Principal amount										$ 34,000		34,000
Consortium of investors including other unaffiliated investors, certain of officers and chief executive officer | Bridge Loan One Multifamily Property [Member] | Maturity Date Of August 2022
Agreements and transactions with related parties
Principal amount					$ 35,400					34,000		34,000
Consortium of investors including other unaffiliated investors, certain of officers and chief executive officer | Bridge Loan One Multifamily Property [Member] | Maturity Date Of August 2022 | LIBOR
Agreements and transactions with related parties
Variable rate, spread (as a percent)					3.50%
Consortium of investors including an immediate family member of our officers | Multifamily | Fannie Mae
Agreements and transactions with related parties
Percentage of maximum loss-sharing obligation unpaid principal balance																5.00%
Principal amount																$ 46,900
Percentage of ownership interest of related party in the entity																17.60%
Consortium of investors including an immediate family member of our officers | Maximum | Multifamily | Fannie Mae
Agreements and transactions with related parties
Interest income recorded												100
Consortium of investors including an immediate family member of our officers | Bridge Loan Several Multifamily Properties [Member] | Multifamily
Agreements and transactions with related parties
Interest income recorded													900
Consortium of investors including an immediate family member of our officers | Bridge Loan One Multifamily Property [Member]
Agreements and transactions with related parties
Principal amount																			$ 7,000
Certain certain officers, chief executive officer, and other unaffiliated investors | Bridge Loan Several Multifamily Properties [Member] | Maturity Date Of January 2021 [Member]
Agreements and transactions with related parties
Due to related party															$ 9,400
Percentage of ownership interest of related party in the entity															75.00%
Interest income recorded											100	300	400
Certain certain officers, chief executive officer, and other unaffiliated investors | Bridge Loan Several Multifamily Properties [Member] | Maturity Date Of January 2021 [Member] | LIBOR
Agreements and transactions with related parties
Base spread (as a percent)															5.00%
Certain certain officers, chief executive officer, and other unaffiliated investors | Bridge Loan Several Multifamily Properties [Member] | Maturity Date Of January 2021 [Member] | Minimum | LIBOR
Agreements and transactions with related parties
Base spread (as a percent)															1.25%
Certain certain officers, chief executive officer, and other unaffiliated investors | Bridge Loan One Multifamily Property [Member] | Maturity Date Of June 2021 [Member]
Agreements and transactions with related parties
Principal amount															$ 21,700
Percentage of ownership interest of related party in the entity															75.00%
Interest income recorded										300	300	1,000	1,000
Certain certain officers, chief executive officer, and other unaffiliated investors | Bridge Loan One Multifamily Property [Member] | Maturity Date Of June 2021 [Member] | LIBOR
Agreements and transactions with related parties
Base spread (as a percent)															4.75%
Certain certain officers, chief executive officer, and other unaffiliated investors | Bridge Loan One Multifamily Property [Member] | Maturity Date Of June 2021 [Member] | Minimum | LIBOR
Agreements and transactions with related parties
Base spread (as a percent)															1.25%
Certain certain officers, chief executive officer, and other unaffiliated investors | Bridge Loan Two Multifamily Properties [Member] | Maturity date of October 2021
Agreements and transactions with related parties
Principal amount																$ 31,100
Certain certain officers, chief executive officer, and other unaffiliated investors | Bridge Loan Two Multifamily Properties [Member] | Maturity date of October 2021 | LIBOR
Agreements and transactions with related parties
Base spread (as a percent)																4.00%
Certain certain officers, chief executive officer, and other unaffiliated investors | Bridge Loan Two Multifamily Properties [Member] | Maturity date of October 2021 | Minimum
Agreements and transactions with related parties
Base spread (as a percent)																1.80%
Certain certain officers, chief executive officer, and other unaffiliated investors | Bridge Loan Two Multifamily Properties [Member] | Maturity Date Of Fourth Quarter 2020 [Member]
Agreements and transactions with related parties
Principal amount																$ 28,000
Number of properties owned | property																2
Percentage of ownership interest of related party in the entity																45.00%
Base spread (as a percent)																5.25%
Interest income recorded										$ 500	500	$ 1,400	1,400
Number of bridge loans originated | item																2
Certain certain officers, chief executive officer, and other unaffiliated investors | Bridge Loan Two Multifamily Properties [Member] | Maturity Date Of Fourth Quarter 2020 [Member] | Minimum
Agreements and transactions with related parties
LIBOR floor (as a percentage)																1.24%
Certain certain officers, chief executive officer, and other unaffiliated investors | Bridge Loan Two Multifamily Properties [Member] | Maturity Date Of Fourth Quarter 2020 [Member] | Maximum
Agreements and transactions with related parties
LIBOR floor (as a percentage)																1.54%
Chief executive officer | Minimum
Agreements and transactions with related parties
Ownership interest limit of our common stock under company charter (as a percent)										5.00%		5.00%
Mr. Ivan Kaufman
Agreements and transactions with related parties
Percentage of our Former Manager's outstanding membership interest of related party in another related party										35.00%		35.00%
Board of Directors
Agreements and transactions with related parties
Number of portfolios of multifamily properties | item										2		2
Board of Directors | Ginkgo Investment Company LLC [Member]
Agreements and transactions with related parties
Percentage of managing member																33.00%
Immediate family member of chief executive officer | Matures in October 2023 [Member] | Preferred equity interest financing agreement
Agreements and transactions with related parties
Interest income recorded										$ 100		$ 400
Immediate family member of chief executive officer | Matures in May 2023 [Member] | Preferred equity interest financing agreement
Agreements and transactions with related parties
Interest income recorded										100		400
Immediate family member of chief executive officer | Preferred equity investments | Matures in October 2023 [Member]
Agreements and transactions with related parties
Fixed rate of interest (as a percent)			12.00%
Immediate family member of chief executive officer | Preferred equity investments | Matures in May 2023 [Member]
Agreements and transactions with related parties
Fixed rate of interest (as a percent)				12.00%
Immediate family member of chief executive officer | Bridge loans
Agreements and transactions with related parties
Equity participation interest (as a percentage)			21.80%	18.90%
Immediate family member of chief executive officer | Bridge loans | Land
Agreements and transactions with related parties
Principal amount															$ 17,700
Paydowns of principal made by borrower							$ 4,700
Percentage of ownership interest of related party in the entity															10.80%
Interest income recorded													100
Fixed rate of interest (as a percent)															10.00%
Immediate family member of chief executive officer | Bridge loans | Matures in October 2023 [Member] | LIBOR
Agreements and transactions with related parties
Base spread (as a percent)			5.50%
LIBOR floor (as a percentage)			0.75%
Immediate family member of chief executive officer | Bridge loans | Matures in May 2023 [Member]
Agreements and transactions with related parties
Base spread (as a percent)				5.50%
LIBOR floor (as a percentage)				0.75%
Immediate family member of chief executive officer | Bridge Loan Several Multifamily Properties [Member]
Agreements and transactions with related parties
Percentage of ownership interest of related party in the entity														23.90%
LIBOR floor (as a percentage)														2.375%
Interest income recorded													1,400
Immediate family member of chief executive officer | Bridge Loan Several Multifamily Properties [Member] | LIBOR
Agreements and transactions with related parties
Base spread (as a percent)														4.25%
Lexford Portfolio | Preferred equity investments
Agreements and transactions with related parties
(Income) loss from equity affiliates												1,100
Lexford Portfolio | Bridge loans | Maturity Date Of June 2021 [Member]
Agreements and transactions with related parties
Principal amount									$ 280,500
Interest income recorded												500
Maximum exposure under guaranty										607,400		607,400
Number of bridge loans originated | loan									12
Number of multifamily properties renovated | property									72
Entity controlled by our chief executive officer
Agreements and transactions with related parties
Reimbursement for flights chartered by the company's executives												100	400
Certain Officers And Managers [Member] | Mezzanine loans | Maturity Date January 2024 [Member]
Agreements and transactions with related parties
Fixed rate of interest (as a percent)								10.00%
Certain Officers And Managers [Member] | Bridge Loan Six Multifamily Properties [Member] | Maturity Date September 2019 [Member]
Agreements and transactions with related parties
Principal amount																	$ 48,000
Number of properties owned | property																	6
Base spread (as a percent)																	4.50%
Interest income recorded										100	$ 100	$ 200	$ 200
Number of bridge loans paid off | loan														4		1
Proceeds from repayment in full								$ 10,900						$ 28,300		$ 6,800
Certain Officers And Managers [Member] | Bridge Loan Six Multifamily Properties [Member] | Maturity Date September 2019 [Member] | Minimum
Agreements and transactions with related parties
Percentage of ownership interest of related party in the entity																	10.50%
Base spread (as a percent)																	0.25%
Certain Officers And Managers [Member] | Bridge Loan Six Multifamily Properties [Member] | Maturity Date September 2019 [Member] | Maximum
Agreements and transactions with related parties
Percentage of ownership interest of related party in the entity																	12.00%
Ginkgo Investment Company LLC [Member] | Fannie Mae
Agreements and transactions with related parties
Loan purchased a multifamily apartment complex which assumed																$ 8,300
Percentage of maximum loss-sharing obligation unpaid principal balance																20.00%
Percentage of loan assumption fee																1.00%
Percentage of ownership after transaction												3.60%
Ginkgo Investment Company LLC [Member] | Maximum | Fannie Mae
Agreements and transactions with related parties
Servicing revenue												$ 100
Consortium Of Affiliated Investors [Member] | Lexford Portfolio
Agreements and transactions with related parties
Management fee, percentage of gross revenues of underlying properties												4.75%
Real estate investment fund sponsored and managed by Chief executive officer and immediate family member of chief executive officer | Bridge loans | Maturity date of March 2024
Agreements and transactions with related parties
Principal amount	$ 63,400
Interest income recorded										$ 700		$ 1,400
Real estate investment fund sponsored and managed by Chief executive officer and immediate family member of chief executive officer | Bridge loans | Maturity date of March 2024 | LIBOR
Agreements and transactions with related parties
Base spread (as a percent)	3.75%
LIBOR floor (as a percentage)	0.25%

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Segment Information - Statements of Income (Details) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2021 USD ($)	Sep. 30, 2020 USD ($)	Sep. 30, 2021 USD ($) item	Sep. 30, 2020 USD ($)
Segment Information
Interest income	$ 125,480	$ 81,701	$ 321,772	$ 253,307
Interest expense	55,560	37,888	144,122	129,172
Net interest income	69,920	43,813	177,650	124,135
Other revenue:
Gain on sales, including fee-based services, net	16,334	19,895	86,102	60,566
Mortgage servicing rights	32,453	42,357	95,688	96,708
Servicing revenue	34,960	25,764	94,683	76,285
Amortization of MSRs	(14,872)	(12,416)	(43,744)	(36,129)
Property operating income		1,033		3,976
Loss on derivative instruments, net	(1,492)	(753)	(7,320)	(58,852)
Other income, net	2,195	1,050	4,140	3,404
Total other revenue	69,578	76,930	229,549	145,958
Other expenses:
Employee compensation and benefits	41,973	32,962	128,647	101,652
Selling and administrative	11,757	9,356	33,707	29,013
Property operating expenses	149	1,300	421	4,778
Depreciation and amortization	1,807	1,922	5,349	5,830
Provision for loss sharing (net of recoveries)	(3,272)	(2,227)	(1,070)	21,706
Provision for credit losses (net of recoveries)	(3,799)	(7,586)	(12,689)	59,510
Total other expenses	48,615	35,727	154,365	222,489
Income before extinguishment of debt, sale of real estate, income from equity affiliates and income taxes	90,883	85,016	252,834	47,604
Loss on extinguishment of debt		(1,868)	(1,370)	(3,546)
(Loss) Gain on sale of real estate		(1,868)	1,228	(1,868)
Income from equity affiliates	5,086	32,358	32,095	56,758
Provision for income taxes	(9,905)	(17,785)	(33,356)	(15,493)
Net income	86,064	97,721	251,431	83,455
Preferred stock dividends	4,913	1,888	13,216	5,665
Net income attributable to noncontrolling interest	8,347	13,836	26,806	11,012
Net income attributable to common stockholders	72,804	81,997	$ 211,409	66,778
Reporting segments | item			2
Operating segments | Structured Business
Segment Information
Interest income	114,710	75,471	$ 294,418	228,243
Interest expense	50,823	35,252	131,795	115,390
Net interest income	63,887	40,219	162,623	112,853
Other revenue:
Property operating income		1,033		3,976
Loss on derivative instruments, net		118		(3,176)
Other income, net	2,168	1,050	4,105	3,347
Total other revenue	2,168	2,201	4,105	4,147
Other expenses:
Employee compensation and benefits	14,082	8,873	37,566	28,880
Selling and administrative	5,718	4,665	15,477	12,647
Property operating expenses	149	1,300	421	4,778
Depreciation and amortization	634	598	1,832	1,845
Provision for credit losses (net of recoveries)	(3,445)	(6,065)	(12,807)	58,383
Total other expenses	17,138	9,371	42,489	106,533
Income before extinguishment of debt, sale of real estate, income from equity affiliates and income taxes	48,917	33,049	124,239	10,467
Loss on extinguishment of debt		(1,868)	(1,370)	(3,546)
(Loss) Gain on sale of real estate				(1,868)
Income from equity affiliates	5,086	32,358	32,095	56,758
Provision for income taxes	(622)	(6,494)	(6,288)	(9,337)
Net income	53,381	57,045	148,676	52,474
Preferred stock dividends	4,913	1,888	13,216	5,665
Net income attributable to common stockholders	48,468	55,157	135,460	46,809
Operating segments | Agency Business
Segment Information
Interest income	10,770	6,230	27,354	25,064
Interest expense	4,737	2,636	12,327	13,782
Net interest income	6,033	3,594	15,027	11,282
Other revenue:
Gain on sales, including fee-based services, net	16,334	19,895	86,102	60,566
Mortgage servicing rights	32,453	42,357	95,688	96,708
Servicing revenue	34,960	25,764	94,683	76,285
Amortization of MSRs	(14,872)	(12,416)	(43,744)	(36,129)
Loss on derivative instruments, net	(1,492)	(871)	(7,320)	(55,676)
Other income, net	27		35	57
Total other revenue	67,410	74,729	225,444	141,811
Other expenses:
Employee compensation and benefits	27,891	24,089	91,081	72,772
Selling and administrative	6,039	4,691	18,230	16,366
Depreciation and amortization	1,173	1,324	3,517	3,985
Provision for loss sharing (net of recoveries)	(3,272)	(2,227)	(1,070)	21,706
Provision for credit losses (net of recoveries)	(354)	(1,521)	118	1,127
Total other expenses	31,477	26,356	111,876	115,956
Income before extinguishment of debt, sale of real estate, income from equity affiliates and income taxes	41,966	51,967	128,595	37,137
(Loss) Gain on sale of real estate			1,228
Provision for income taxes	(9,283)	(11,291)	(27,068)	(6,156)
Net income	32,683	40,676	102,755	30,981
Net income attributable to common stockholders	32,683	40,676	102,755	30,981
Other / Eliminations
Other expenses:
Net income attributable to noncontrolling interest	8,347	13,836	26,806	11,012
Net income attributable to common stockholders	$ (8,347)	$ (13,836)	$ (26,806)	$ (11,012)

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Segment Information - Balance Sheet (Details) - USD ($) $ in Thousands	Sep. 30, 2021	Dec. 31, 2020	Sep. 30, 2020	Dec. 31, 2019
Assets:
Cash and cash equivalents	$ 380,730	$ 339,528	$ 192,204	$ 299,687
Restricted cash	569,928	197,470	$ 110,263	$ 210,875
Loans and investments, net	8,993,790	5,285,868
Loans held-for-sale, net	1,274,234	986,919
Capitalized mortgage servicing rights, net	417,283	379,974
Securities held-to-maturity, net	112,735	95,524
Investments in equity affiliates	91,846	74,274
Goodwill and other intangible assets	101,933	105,451
Other assets	227,105	195,978
Total assets	12,169,584	7,660,986
Liabilities:
Debt obligations	9,618,286	5,824,664
Allowance for loss-sharing obligations	62,828	64,303
Other liabilities	353,063	289,334
Total liabilities	10,034,177	6,178,301
Structured Business | Operating segments
Assets:
Cash and cash equivalents	162,870	172,568
Restricted cash	552,706	188,226
Loans and investments, net	8,993,790	5,285,868
Investments in equity affiliates	91,846	74,274
Goodwill and other intangible assets	12,500	12,500
Other assets	136,653	142,844
Total assets	9,950,365	5,876,280
Liabilities:
Debt obligations	8,515,801	4,872,626
Other liabilities	225,088	203,554
Total liabilities	8,740,889	5,076,180
Agency Business | Operating segments
Assets:
Cash and cash equivalents	217,860	166,960
Restricted cash	17,222	9,244
Loans held-for-sale, net	1,274,234	986,919
Capitalized mortgage servicing rights, net	417,283	379,974
Securities held-to-maturity, net	112,735	95,524
Goodwill and other intangible assets	89,433	92,951
Other assets	90,452	53,134
Total assets	2,219,219	1,784,706
Liabilities:
Debt obligations	1,102,485	952,038
Allowance for loss-sharing obligations	62,828	64,303
Other liabilities	127,975	85,780
Total liabilities	$ 1,293,288	$ 1,102,121

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Segment Information - Origination Data (Details)	3 Months Ended		9 Months Ended
	Sep. 30, 2021 USD ($) loan	Sep. 30, 2020 USD ($)	Sep. 30, 2021 USD ($) loan	Sep. 30, 2020 USD ($) loan
Segment Information
Origination Volumes	$ 1,856,474,000	$ 1,528,551,000	$ 4,510,953,000	$ 4,002,492,000
Loan Sales Data:
Loan Sales	$ 1,006,958,000	$ 1,219,462,000	$ 4,330,959,000	$ 4,169,411,000
Sales margin (fee-based services as a % of loan sales)	1.62%	1.63%	1.99%	1.45%
MSR rate (MSR income as a % of loan commitments)	1.75%	2.77%	2.12%	2.42%
Structured Business
Segment Information
Total new loan originations	$ 2,474,653,000	$ 291,758,000	$ 5,401,524,000	$ 1,448,468,000
Loan payoffs / paydowns	567,858,000	206,028,000	1,463,826,000	640,494,000
Structured Business | Bridge loans
Segment Information
Total new loan originations	2,383,346,000	286,993,000	5,189,722,000	1,371,049,000
Structured Business | Mezzanine loans
Segment Information
Total new loan originations	62,657,000	1,000,000	156,914,000	16,722,000
Structured Business | Preferred equity investments
Segment Information
Total new loan originations	$ 28,650,000		28,650,000	23,500,000
Structured Business | Other loans
Segment Information
Total new loan originations		3,765,000	$ 26,238,000	$ 37,197,000
Structured Business | SFR - Fixed Rate | Bridge loans
Segment Information
Number of loans committed by Entity | loan	1		5
Loans committed	$ 17,600,000		$ 156,000,000.0
Number of loans under the loan portfolio	25		68
Total loan commitment	$ 105,300,000		$ 219,500,000
Structured Business | SFR - Fixed Rate | Other loans
Segment Information
Number of loans under the loan portfolio | loan			1	9
Total loan commitment			$ 26,200,000	$ 37,200,000
Agency Business
Segment Information
Origination Volumes	1,804,227,000	1,475,878,000	4,515,212,000	3,958,406,000
Agency Business | SFR - Fixed Rate
Segment Information
Origination Volumes	67,227,000		79,223,000
Loan Sales Data:
Loan Sales	29,197,000		104,491,000
Agency Business | Fannie Mae
Segment Information
Origination Volumes	719,730,000	1,117,679,000	2,421,206,000	2,839,833,000
Loan Sales Data:
Loan Sales	660,693,000	1,038,053,000	2,820,558,000	2,856,020,000
Agency Business | Private Label
Segment Information
Origination Volumes	625,176,000	5,840,000	1,154,814,000	337,307,000
Loan Sales Data:
Loan Sales			449,890,000	727,154,000
Agency Business | Freddie Mac
Segment Information
Origination Volumes	307,664,000	252,014,000	578,295,000	587,445,000
Loan Sales Data:
Loan Sales	238,880,000	116,628,000	647,827,000	468,019,000
Agency Business | FHA
Segment Information
Origination Volumes	84,430,000	100,345,000	281,674,000	193,821,000
Loan Sales Data:
Loan Sales	$ 78,188,000	$ 64,781,000	$ 308,193,000	$ 118,218,000

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Segment Information - Key Servicing Metrics (Details) - Agency Business - MSRs - USD ($) $ in Thousands	9 Months Ended	12 Months Ended
	Sep. 30, 2021	Dec. 31, 2020
Segment Information
UPB of Servicing Portfolio	$ 26,212,118	$ 24,628,456
Wtd. Avg. Servicing Fee Rate (basis points)	0.457%	45.40%
Wtd. Avg. Life of Servicing Portfolio (in years)	9 years 1 month 6 days	8 years 10 months 24 days
SFR - Fixed Rate
Segment Information
UPB of Servicing Portfolio	$ 104,094
Wtd. Avg. Servicing Fee Rate (basis points)	20.00%
Wtd. Avg. Life of Servicing Portfolio (in years)	5 years 8 months 12 days
Fannie Mae
Segment Information
UPB of Servicing Portfolio	$ 19,271,527	$ 18,268,268
Wtd. Avg. Servicing Fee Rate (basis points)	53.20%	52.30%
Wtd. Avg. Life of Servicing Portfolio (in years)	8 years 4 months 24 days	8 years 2 months 12 days
Freddie Mac
Segment Information
UPB of Servicing Portfolio	$ 4,726,587	$ 4,881,080
Wtd. Avg. Servicing Fee Rate (basis points)	28.10%	27.90%
Wtd. Avg. Life of Servicing Portfolio (in years)	9 years 9 months 18 days	9 years 10 months 24 days
Private Label
Segment Information
UPB of Servicing Portfolio	$ 1,176,391	$ 726,992
Wtd. Avg. Servicing Fee Rate (basis points)	20.00%	20.00%
Wtd. Avg. Life of Servicing Portfolio (in years)	8 years 9 months 18 days	8 years 8 months 12 days
FHA
Segment Information
UPB of Servicing Portfolio	$ 933,519	$ 752,116
Wtd. Avg. Servicing Fee Rate (basis points)	15.60%	16.30%
Wtd. Avg. Life of Servicing Portfolio (in years)	21 years 4 months 24 days	20 years 3 months 18 days