Business Context and Reporting Period
Company: Cherry Hill Mortgage Investment Corp
Filing Type: Form 8-K (Current Report)
Date of Report: October 9, 2013
Context: The filing discloses the entry into material definitive agreements immediately following the company's recently completed initial public offering (IPO). The primary counterparty for these agreements is Freedom Mortgage Corporation, an affiliate of Cherry Hill's manager.
Key Financial Metrics and Agreements
This filing details specific capital commitments rather than historical financial performance metrics (revenue, profit, cash flow). The filing does not provide current revenue, profit, or liquidity figures.
- Pool 1 Investment Commitment: Approximately $60.6 million to acquire an 85% participation interest in Excess Mortgage Servicing Rights (MSRs) related to fixed-rate, Ginnie Mae-eligible FHA and VA loans.
- Pool 2 Investment Commitment: Approximately $38.4 million to acquire a 50% participation interest in Excess MSRs related to Ginnie Mae-eligible VA hybrid ARMs.
- Total Disclosed Commitment: Approximately $99.0 million across two specific MSR pools.
Material Changes and Strategic Agreements
On October 9, 2013, Cherry Hill entered into four key agreements with Freedom Mortgage Corporation:
- Strategic Alliance Agreement: Designed to provide a consistent and predictable source of real estate assets from Freedom Mortgage.
- Flow and Bulk Excess MSR Acquisition Agreement: Grants Cherry Hill the option to acquire interests in excess MSRs on single-family residential loans originated or acquired in bulk by Freedom Mortgage.
- Pool 1 Excess MSR Acquisition and Recapture Agreement: Formalizes the $60.6 million investment commitment described above.
- Pool 2 Excess MSR Acquisition and Recapture Agreement: Formalizes the $38.4 million investment commitment described above.
Guidance, Outlook, and Risks
Management Commentary: The agreements are intended to secure a steady pipeline of assets post-IPO. The material terms were previously disclosed in the Form S-11 Registration Statement.
Risks and Contingencies: The filing does not explicitly list new risks beyond the standard nature of MSR investments. The agreements involve significant capital deployment ($99.0 million) contingent on the performance and availability of the underlying mortgage pools.
Unusual Items: None reported in this specific filing.
Investor Verification Checklist
- Verify the full text of the Form S-11 Registration Statement (No. 333-188214) for detailed terms of the agreements.
- Confirm the closing status and funding timeline for the $60.6 million (Pool 1) and $38.4 million (Pool 2) commitments.
- Review the specific underwriting criteria for the FHA, VA, and hybrid ARM loans underlying the MSR pools.
- Assess the related-party nature of the transaction with Freedom Mortgage Corporation (affiliate of the manager).