CNSREIT-AR-2024 Final - Flipbook - Page 60
If we invest in RMBS, which may include government mortgage pass-through securities and non-agency RMBS, these
investments are subject to certain other risks that may adversely affect our results of operations and financial condition.
If we invest in RMBS, these investments are subject to the risks of defaults, foreclosure timeline extension, fraud,
home price depreciation and unfavorable modification of loan principal amount, interest rate and amortization of principal
accompanying the underlying residential mortgage loans. To the extent that assets underlying our investments are
concentrated geographically, by property type or in certain other respects, we may be subject to certain of the foregoing
risks to a greater extent. In the event of defaults on the residential mortgage loans that underlie our investments in RMBS
and the exhaustion of any underlying or any additional credit support, we may not realize our anticipated return on our
investments and we may incur a loss on these investments. At any one time, a portfolio of RMBS may be backed by
residential mortgage loans with disproportionately large aggregate principal amounts secured by properties in only a few
states or regions in the U.S. or in only a few foreign countries. As a result, the residential mortgage loans may be more
susceptible to geographic risks relating to such areas, such as adverse economic conditions, adverse political changes,
adverse events affecting industries located in such areas and natural hazards affecting such areas, than would be the case
for a pool of mortgage loans having more diverse property locations. We may also acquire non-agency RMBS, which are
backed by residential property but, in contrast to agency RMBS, their principal and interest are not guaranteed by federally
chartered entities such as the Fannie Mae and Freddie Mac and, in the case of the Government National Mortgage
Association (
