EOS Preferred Corp Series D Pfd (fka EOSPN)

[Enterprising Investor]

Liquidation is likely.

The current balance structure cannot generate income sufficient to cover the annual dividends.

There are other options. It could grow the loan portfolio.

Aurora FSB rolled out a jumbo product this week in its Correspondent channel. Yes, I said "jumbo". The program highlights include a 15- and 30-year terms with fixed rates and 5/1, 7/1, 10/1 Hybrid ARMS. The maximum loan amount is $2,000,000 for owner occupied 1-2 units. Loans at 80% LTV available at 700 Fico for a maximum of $1,000,000 loan amount. Cash-out loans allowed up to 60% LTV.

Since the GSE's will not buy non-conforming loans, Aurora will either have to hold them in its portfolio or find a buyer. I could envision the REIT buying the loans just like Thornburg Mortgage once did.