1055160--2/16/2007--MFA_MORTGAGE_INVESTMENTS

related topics
{tax, income, asset}
{loan, real, estate}
{investment, property, distribution}
{loss, insurance, financial}
{regulation, change, law}
{condition, economic, financial}
{personnel, key, retain}
{provision, law, control}
{cost, regulation, environmental}
{debt, indebtedness, cash}
{acquisition, growth, future}
An increase in our borrowing costs relative to the interest we receive on our MBS may adversely affect our profitability. Changes in interest rates, cyclical or otherwise, may adversely affect our profitability. Hybrid MBS have fixed interest rates for an initial period which may reduce our profitability if short-term interest rates increase A flat or inverted yield curve may adversely affect ARM-MBS prepayment rates and supply Interest rate caps on the ARMs collateralizing our MBS may adversely affect our profitability if short-term interest rates increase. Adjustments of interest rates on our borrowings may not be matched to interest rate indexes on our MBS. Prepayment rates on the mortgage loans underlying our MBS may adversely affect our profitability. Our business strategy involves a significant amount of borrowing that exposes us to additional risks. Our profitability may be limited by a reduction in our leverage. If we are unable to renew our borrowings at favorable rates, it may force us to sell assets and our profitability may be adversely affected. A decline in the market value of our assets may result in margin calls that may force us to sell assets under adverse market conditions. Our use of repurchase agreements to borrow money may give our lenders greater rights in the event of bankruptcy. We may experience a decline in the market value of our assets. Our investment strategy may involve credit risk. Our use of derivatives to mitigate our interest rate risks may not be effective and may expose us to counterparty risks. Changes in accounting treatment may adversely affect our profitability. We may change our policies without stockholder approval. We have not established a minimum dividend payment level. We are dependent on our executives and employees. We may be subject to risks associated with our investments in real estate. Because of competition, we may not be able to acquire investment assets at favorable prices. Our qualification as a REIT. Compliance with securities laws and regulations could be costly. Loss of our Investment Company Act exemption would adversely affect us.

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