Cherry Hill Mortgage Investment Corporation (CHMI): History, Ownership, Mission, How It Works & Makes Money

As a hybrid mortgage real estate investment trust (mREIT), how has Cherry Hill Mortgage Investment Corporation (CHMI) managed to deliver a compelling yield while navigating the Federal Reserve's 2025 rate-cutting cycle?

They do this by strategically balancing their portfolio of Agency Residential Mortgage-Backed Securities (RMBS) and Mortgage Servicing Rights (MSRs), which had an Unpaid Principal Balance (UPB) of $16.2 billion as of September 30, 2025. Despite market challenges, the company maintained a significant dividend yield of 17% based on the Q3 2025 closing price and a Book Value per Share of $3.36, showing a clear focus on shareholder returns. If you want to understand the mechanics behind this high-yield strategy, especially with $1.5 billion in Investable Assets, and see if this model can defintely sustain its returns, you need to know how their history and ownership structure drive their profit engine.

Cherry Hill Mortgage Investment Corporation (CHMI) History

You're looking for the foundational story of Cherry Hill Mortgage Investment Corporation, a company that has navigated the choppy waters of the residential mortgage market since the post-financial crisis era. The direct takeaway is this: Cherry Hill Mortgage Investment Corporation was built on a hybrid strategy, combining the stability of Agency Residential Mortgage-Backed Securities (RMBS) with the high-yield potential of Mortgage Servicing Rights (MSRs), and its most recent, critical pivot was becoming an internally managed Real Estate Investment Trust (REIT) in late 2024.

Given Company's Founding Timeline

Year established

The company was incorporated in Maryland on October 31, 2012, but its operations officially commenced on October 9, 2013, following its Initial Public Offering (IPO). This is a key distinction; the corporate structure was ready a year before the investment engine actually started running.

Original location

The principal executive offices have been consistently located in Tinton Falls, New Jersey.

Founding team members

The initial structure was externally managed by Cherry Hill Mortgage Management, LLC, an entity established by Stanley Middleman, who also served as the Chairman of the Board. The initial executive leadership team included:

• Jeffrey B. Lown II: President, Chief Executive Officer, and Director.
• Julian B. Evans, C.F.A.: Chief Investment Officer.

Initial capital/funding

The company raised gross proceeds of a substantial $150 million on October 9, 2013, through its IPO and a concurrent private placement. This capital was raised by selling 7,500,000 shares of common stock-6,500,000 in the IPO and 1,000,000 in the private placement-all priced at $20.00 per share. That's a strong start for a specialized REIT.

Given Company's Evolution Milestones

Given Company's Transformative Moments

The most significant shift in Cherry Hill Mortgage Investment Corporation's trajectory was the move from an externally managed structure to a fully internal one. This is a defintely a game-changer for a REIT.

• The 2024 Internalization: The transition, completed on November 14, 2024, was a direct response to a strategic review aimed at enhancing shareholder value. By eliminating the external management agreement and its associated fees, the company expects to reduce operating expenses and improve its earnings profile, which is a clear benefit to shareholders. The company's Q1 2025 results were the first full quarter reflecting this new, lower-cost operating model [cite: 4 from first search].
• Strategic Portfolio Balance: From its inception, the company's core strategy has been the balanced investment in both Agency RMBS and Mortgage Servicing Rights (MSRs) [cite: 11 from first search]. MSRs typically increase in value when interest rates rise, while Agency RMBS generally perform better when rates fall. This hybrid approach is designed to provide more consistent returns across different interest rate cycles. As of Q3 2025, the company had approximately $1.5 billion in Investable Assets, with a significant MSR UPB of $16.2 billion, showing a continued commitment to this dual-asset model [cite: 11 from first search].
• Capital Management in 2025: Navigating the interest rate environment of 2025 required caution. The company's Q3 2025 dividend was set at $0.10 per share, a move that, while a reduction, was framed as a capital preservation strategy [cite: 3 from first search, 8 from first search]. This decision, alongside maintaining a prudent aggregate portfolio leverage of 5.3x, shows a trend-aware realism in managing risk and preserving capital for future opportunities [cite: 3 from first search, 8 from first search].

To understand the forward-looking strategy that underpins these decisions, you should review the Mission Statement, Vision, & Core Values of Cherry Hill Mortgage Investment Corporation (CHMI).

Cherry Hill Mortgage Investment Corporation (CHMI) Ownership Structure

Cherry Hill Mortgage Investment Corporation's ownership structure is dominated by retail investors and major institutions, a common profile for a publicly traded real estate investment trust (REIT). The company is externally managed by Cherry Hill Mortgage Management, LLC, which influences its strategic direction and operations.

Cherry Hill Mortgage Investment Corporation's Current Status

Cherry Hill Mortgage Investment Corporation (CHMI) is a publicly traded company, listed on the New York Stock Exchange (NYSE: CHMI). As a residential mortgage REIT (Real Estate Investment Trust), it is required to distribute at least 90% of its taxable income to shareholders, which explains its attractive dividend yield, reported at an annualized 17.0% based on the closing stock price on November 5, 2025. The company's market capitalization stood at approximately $85.98 million as of November 14, 2025.

This public status means the company is subject to rigorous regulatory oversight by the U.S. Securities and Exchange Commission (SEC), ensuring transparency through regular filings like the 13F and 8-K reports. To understand the risk-adjusted returns driving this structure, you should read Breaking Down Cherry Hill Mortgage Investment Corporation (CHMI) Financial Health: Key Insights for Investors.

Cherry Hill Mortgage Investment Corporation's Ownership Breakdown

The ownership breakdown for Cherry Hill Mortgage Investment Corporation as of the 2025 fiscal year highlights a significant retail presence, but with a substantial portion held by large financial institutions. This balance means the stock can be volatile, but the larger institutional stakes provide a measure of stability and professional oversight.

The institutional holdings, totaling 18.49%, are concentrated among a few key players. For example, some of the largest institutional shareholders include Vanguard Group Inc., Citadel Advisors LLC, and Renaissance Technologies LLC, all reporting significant positions in 2025. BlackRock, Inc. is also a top holder. This heavy institutional involvement defintely signals professional conviction in the company's hybrid mortgage investment strategy.

Cherry Hill Mortgage Investment Corporation's Leadership

The company is steered by a seasoned management team with deep experience in the residential mortgage and financial services industries. The executive team, which includes the President and CEO, is central to managing the portfolio of mortgage servicing rights (MSRs) and residential mortgage-backed securities (RMBS).

• Jeffrey Lown (Jay Lown): President, Chief Executive Officer (CEO), and Director. Mr. Lown has over two decades of combined experience in financial services and residential mortgage markets, providing continuity since his appointment as President in 2012 and CEO in 2017.
• Julian Evans: Chief Investment Officer (CIO). Mr. Evans leads the investment strategy, bringing over 20 years of experience, including a role as a Senior Portfolio Manager at Deutsche Asset Management.
• Apeksha Patel: Chief Financial Officer (CFO), Controller, Treasurer, and Secretary. Ms. Patel manages the company's financial operations and reporting, having served as Controller since 2019.
• Susan Healey: General Counsel.
• Raymond Slater: Senior Vice President of Mortgage Servicing.

The average tenure for the management team is about five years, which is a good sign for consistent strategy execution in a complex sector. Their compensation is primarily tied to performance, aligning their interests with maximizing shareholder returns.

Cherry Hill Mortgage Investment Corporation (CHMI) Mission and Values

Cherry Hill Mortgage Investment Corporation's core purpose is to deliver superior, risk-adjusted returns to stockholders, focusing on stable dividend income and capital growth. This mission is grounded in a strategic, hybrid investment model that prioritizes proactive portfolio management and capital preservation across volatile interest rate cycles.

You're looking for what Cherry Hill Mortgage Investment Corporation stands for beyond the quarterly earnings report, and honestly, it boils down to a disciplined, long-term focus on the shareholder. The company's culture is built around navigating a complex market-mortgage-backed securities (RMBS) and mortgage servicing rights (MSRs)-to ensure consistent payout, even as the Federal Reserve's actions shift the landscape.

Given Company's Core Purpose

The company's cultural DNA is about managing market risk to sustain a high-yield investment vehicle, which is defintely a challenge in the current environment. Their focus is on the mechanics of a real estate investment trust (REIT), ensuring they distribute at least 90% of their taxable income to stockholders to maintain their tax status.

Official mission statement

The official mission statement for Cherry Hill Mortgage Investment Corporation is precise and shareholder-centric, mapping directly to its business model as a mortgage REIT.

• Consistently generate attractive current yields and risk-adjusted total returns for our stockholders over the long term.
• Achieve this primarily through dividend distributions and secondarily through capital appreciation.
• Selectively construct and actively manage a targeted portfolio of Excess MSRs, Agency RMBS, and other cashflowing residential mortgage assets.

Here's the quick math: with a Q3 2025 common stock dividend of $0.10 per share, maintaining an annualized yield of around 17.0% based on the September 30, 2025 closing price, the mission is clearly centered on that dividend payout.

Vision statement

While not a formal, separate statement, the company's vision is clearly articulated in its strategic focus-to maximize shareholder returns by maintaining a strong, flexible balance sheet. They see themselves as an agile manager of mortgage assets.

• Proactively managing the portfolio to preserve book value in multiple interest rate environments.
• Maintaining a strong balance sheet and liquidity position to nimbly expand and hedge the portfolio.
• Positioning to thrive in a lower interest rate environment, as evidenced by Q3 2025 comprehensive income of $4.5 million, or $0.12 per share, which exceeded GAAP net income of $0.05 per diluted share.
• Growing the portfolio of Mortgage Servicing Rights (MSRs), which had an Unpaid Principal Balance (UPB) of $16.2 billion as of September 30, 2025.

The vision is about strategic agility; they want to be the resilient mortgage REIT. You can learn more about the shareholder base and their motivations in Exploring Cherry Hill Mortgage Investment Corporation (CHMI) Investor Profile: Who's Buying and Why?

Given Company slogan/tagline

The most prominent, unifying phrase used by Cherry Hill Mortgage Investment Corporation to summarize its value proposition is simple and direct.

• Consistently performing for our shareholders.

This tagline captures the essence of their mission: the consistent delivery of attractive yields, even as their Book Value per Share saw a slight increase to $3.36 as of September 30, 2025, up from the prior quarter, signaling confidence in their capital preservation strategies.

Cherry Hill Mortgage Investment Corporation (CHMI) How It Works

Cherry Hill Mortgage Investment Corporation (CHMI) operates as a real estate investment trust (REIT) that generates income by actively managing a diversified portfolio of residential mortgage assets, primarily capitalizing on the spread between the interest earned on its assets and its cost of borrowing.

The company functions as a money manager in the mortgage market, not a direct lender, making its profit by strategically investing in two core asset classes: Mortgage Servicing Rights (MSRs) and Residential Mortgage-Backed Securities (RMBS).

Cherry Hill Mortgage Investment Corporation's Product/Service Portfolio

Cherry Hill Mortgage Investment Corporation's Operational Framework

CHMI's operational framework is built on active portfolio management and risk mitigation, with a focus on optimizing the mix of MSRs and RMBS to navigate interest rate cycles. The goal is to generate Earnings Available for Distribution (EAD) for shareholders, which was $3.2 million, or $0.10 per diluted share, in Q2 2025. Here's the quick math on how they manage risk:

• Financing Assets: They use short-term repurchase agreements (repo financing) to fund the purchase of RMBS, which creates leverage. The aggregate portfolio leverage stood at 5.3x as of Q3 2025.
• Hedging Interest Rate Risk: The company uses a variety of derivative instruments-like interest rate swaps, Treasury futures, and To-Be-Announced (TBA) securities-to defintely mitigate the risk of rising interest rates on their debt and asset values.
• Value Creation: The MSR portfolio, with a Q3 2025 market value of approximately $219 million, acts as a natural hedge because its value typically rises when interest rates increase, offsetting potential losses on the RMBS portfolio.

You can learn more about who is investing in this strategy at Exploring Cherry Hill Mortgage Investment Corporation (CHMI) Investor Profile: Who's Buying and Why?

Cherry Hill Mortgage Investment Corporation's Strategic Advantages

The company's ability to sustain returns in a volatile market comes down to two key strategic advantages: its internally managed structure and its portfolio composition, which allows for strategic agility in response to Federal Reserve policy.

• Counter-Cyclical Portfolio: The combination of MSRs and Agency RMBS creates a portfolio where the two main assets move in opposite directions during interest rate changes. MSRs are a liability-side hedge, and RMBS are a duration-risk asset.
• Internal Management: CHMI transitioned to an internally managed mortgage REIT, which eliminated external management fees, directly resulting in lower operating expenses.
• Prudent Liquidity: The company ended Q3 2025 with $55.4 million in unrestricted cash, providing crucial liquidity to seize accretive investment opportunities as market conditions shift.
• Digital Innovation: The strategic partnership with Real Genius LLC positions CHMI to benefit from digital transformation in the mortgage industry, potentially leading to lower operational costs and the ability to generate their own Excess MSRs over the long term.

Cherry Hill Mortgage Investment Corporation (CHMI) How It Makes Money

Cherry Hill Mortgage Investment Corporation, a real estate investment trust (REIT), primarily generates income by managing a portfolio of mortgage-related assets, specifically earning the spread between the interest income earned on its assets and the cost of its funding. Its financial engine is a dual-core model, relying heavily on the fee income from Mortgage Servicing Rights (MSRs) and the net interest margin from its Agency Residential Mortgage-Backed Securities (RMBS) portfolio.

Given Company's Revenue Breakdown

For the third quarter of 2025, the company's core operating revenue-Net Servicing Income plus Net Interest Income-totaled approximately $11.8 million, which is the clearest picture of its recurring revenue streams.

The Net Servicing Income stream, derived from the fees collected for servicing mortgages, remains the dominant revenue source at roughly 72% of core income in Q3 2025, though it saw a slight quarter-over-quarter dip from $9.0 million to $8.5 million. The Net Interest Income from the Agency RMBS portfolio, which is the classic mortgage REIT play of borrowing short and lending long, is growing, rising from $2.6 million in Q2 2025 to $3.3 million in Q3 2025.

Business Economics

The business model is built on maximizing the spread between asset yields and funding costs while managing the risk inherent in a leveraged portfolio.

• MSR Pricing: Mortgage Servicing Rights (MSRs) are a valuable asset because their value generally moves inversely to interest rates. When rates fall, the MSR value decreases because homeowners refinance faster, cutting off the servicing fee stream. Cherry Hill Mortgage Investment Corporation's MSR portfolio had an Unpaid Principal Balance (UPB) of $16.2 billion and a market value of approximately $219 million as of September 30, 2025.
• Net Interest Spread: The core of the RMBS income is the net interest spread, which was approximately 2.87% for the RMBS portfolio in Q3 2025. This spread is the difference between the interest earned on the RMBS and the cost of the financing (like repurchase agreements) used to acquire them.
• Hedging Strategy: To protect against interest rate volatility, a major risk for a mortgage REIT, the company uses derivatives like interest rate swaps, TBA (To-Be-Announced) securities, and Treasury futures. This hedging is crucial for stabilizing the value of both the MSRs and the RMBS portfolio.
• Strategic Growth: A new layer of economics is the strategic partnership with Real Genius LLC, a digital mortgage technology company, which is expected to benefit from a lower mortgage rate environment by accelerating growth for its platform.

You can dive deeper into who is betting on this model in Exploring Cherry Hill Mortgage Investment Corporation (CHMI) Investor Profile: Who's Buying and Why?

Given Company's Financial Performance

While the company focuses on Earnings Available for Distribution (EAD) as a key measure for its dividend-paying capacity, a full financial picture requires looking at both GAAP and non-GAAP metrics.

• Book Value: The Book Value Per Common Share increased slightly to $3.36 as of September 30, 2025, up from $3.34 the previous quarter, largely due to unrealized gains on the RMBS portfolio from lower interest rates and spread tightening.
• Earnings: GAAP Net Income applicable to common stockholders for Q3 2025 was $2 million, or $0.05 per diluted share. More relevant for a REIT, Earnings Available for Distribution (EAD) was $3.3 million, or $0.09 per diluted share.
• Leverage and Liquidity: The aggregate portfolio leverage stood at 5.3x as of Q3 2025, which is a key risk metric. The company reported a solid liquidity position with $55 million in unrestricted cash at the end of the quarter.
• Dividend: The company declared a quarterly common dividend of $0.10 per share for Q3 2025, which was paid on October 31, 2025. This is an important consideration, as the dividend payout ratio has been extremely high, signaling to be defintely unsustainable based on recent GAAP earnings.

To be fair, the shift to a fully integrated, internally managed company in late 2024 is expected to lower operating expenses over time, which should help the bottom line.

Cherry Hill Mortgage Investment Corporation (CHMI) Market Position & Future Outlook

Cherry Hill Mortgage Investment Corporation is a micro-cap player in the mortgage real estate investment trust (mREIT) sector, facing significant headwinds as evidenced by a forecasted annual revenue of only $9.77 million for 2025 and a projected decline in revenue over the near term. Still, the firm is actively trying to offset these pressures by investing in technology and focusing on its Mortgage Servicing Rights (MSR) portfolio.

Competitive Landscape

To understand Cherry Hill Mortgage Investment Corporation's position, you have to look at the giants it competes with. The firm is a niche player, which is clear when you compare its market capitalization to the industry leaders like Annaly Capital Management.

Opportunities & Challenges

The mREIT space is tricky, and Cherry Hill Mortgage Investment Corporation's strategy maps both clear opportunities and defintely serious risks in the current environment.

Industry Position

Cherry Hill Mortgage Investment Corporation is positioned as a micro-cap, hybrid mREIT, meaning it invests in both Agency Residential Mortgage-Backed Securities (RMBS) and Mortgage Servicing Rights (MSRs). This hybrid model is the core of its risk management strategy, but its small size is a constant factor.

• The firm's total market capitalization of approximately $86.27 million places it at a significant scale disadvantage to industry leaders whose market caps are in the billions.
• Its aggregate portfolio leverage of 5.3x (Q3 2025) is a prudent level for the sector, reflecting disciplined financial oversight.
• The focus on MSRs, which gain value when interest rates rise and prepayment risk drops, is a smart defensive move against the current high-rate environment.
• Analyst ratings suggest an 'Outperform' status with an average brokerage recommendation of 2.5, but the stock's price target has seen recent decreases, showing market skepticism about its near-term growth prospects.
• For a deeper dive into the numbers, check out Breaking Down Cherry Hill Mortgage Investment Corporation (CHMI) Financial Health: Key Insights for Investors.

The challenge for Cherry Hill Mortgage Investment Corporation is generating enough net interest spread to overcome the drag of high financing costs and the forecasted decline in revenue, all while maintaining its compelling dividend yield.