1. March 2013 Marc Bell General Partner, Barbican Capital Co-Founder and Board Member, Armour Residential REIT Inc. Co-Founder and Board Member, Javelin Mortgage Investment Corp.

2. Overview of REITs 2 REITs (Real Estate Investment Trusts) are companies that either own or finance real estate Tax status allows smaller investors to participate in real estate Requirements 75% of total assets in real estate 75% of gross income from real property or interest from mortgages 90% of ordinary taxable income distributed annually as dividends No corporate tax

3. Asset Focus 3 Equity REIT Own and operate real estate properties Collect rent Mortgage REIT Finance real estate - issuing mortgages - buying mortgages - buying MBS Collect interest payments Hybrid REIT Engage in both kinds of activities

4. Growth of Mortgage REITs 4

5. Mortgage REITs Structure 5 Loans MBS Repo Agreements MBS Publicly Traded Shares

6. Mortgage REITs: Types and Risks 6 Agency Non-Agency Residential Invest primarily in MBS guaranteed by GSEs Risks Interest Rate Prepayment NO Credit Risk Annaly Capital Management (NLY) ARMOUR Residential REIT, Inc. (ARR) Residential Invest in loans and privately issued MBS Risks Interest Rate Prepayment Credit/Default Redwood Trust (RWT) PennyMac (PMT) Hybrid Commercial Residential Features of agency and non-agency MREITs Risks Interest Rate Prepayment Credit/Default Chimera Investment Corp. (CIM) MFA Financial, Inc. (MFA) Commercial Invest in privately issued CMBS Risks Interest Rate Credit/Default Starwood Property Trust Inc. (STWD) Crexus Investment Corp. (CXS) iStar Financial Inc. (SFI)

7. Comparison of Recent Performance 7

8. Potential for MBS Private Market Growth 8 Goal: pave the way for a robust private mortgage market shortfall

9. Potential for Growth : Yield Curve 9 Mortgage REITs profit from differences between long- and short-term rates High dividend yield is attractive in a low yield environment

10. March 2013 Marc Bell General Partner, Barbican Capital Co-Founder and Board Member, Armour Residential REIT Inc. Co-Founder and Board Member, Javelin Mortgage Investment Corp.