Residential mortgage investments classified by collateral type and interest rate characteristics were as follows as of the indicated dates (dollars in thousands):

	Unpaid Principal Balance		Investment Premiums		Amortized Cost Basis		Carrying Amount ^(a)		Net WAC ^(b)			Average Yield^(b⁾
December 31, 2013
Agency Securities:
Fannie Mae/Freddie Mac:
Fixed-rate	$	2,158	$	6	$	2,164	$	2,167		6.67	%		6.40	%
ARMs		10,675,620		343,452		11,019,072		11,231,057		2.58			1.59
Ginnie Mae ARMs		2,145,639		74,396		2,220,035		2,233,495		2.64			1.57
		12,823,417		417,854		13,241,271		13,466,719		2.59			1.59
Residential mortgage loans:
Fixed-rate		2,633		3		2,636		2,636		6.99			5.62
ARMs		4,244		18		4,262		4,262		3.81			3.46
		6,877		21		6,898		6,898		5.03			4.27
Collateral for structured financings		2,220		37		2,257		2,257		8.09			7.34
	$	12,832,514	$	417,912	$	13,250,426	$	13,475,874		2.59			1.59
December 31, 2012
Agency Securities:
Fannie Mae/Freddie Mac:
Fixed-rate	$	3,194	$	9	$	3,203	$	3,208		6.70			6.52
ARMs		11,547,954		356,646		11,904,600		12,198,922		2.69			1.91
Ginnie Mae ARMs		1,566,749		48,248		1,614,997		1,647,119		2.77			2.11
		13,117,897		404,903		13,522,800		13,849,249		2.70			1.94
Residential mortgage loans:
Fixed-rate		3,007		5		3,012		3,012		7.01			6.54
ARMs		5,031		20		5,051		5,051		3.87			3.75
		8,038		25		8,063		8,063		5.04			4.78
Collateral for structured financings		2,799		47		2,846		2,846		8.12			7.47
	$	13,128,734	$	404,975	$	13,533,709	$	13,860,158		2.71			1.94

(a)	Includes unrealized gains and losses for residential mortgage investments classified as available-for-sale (see NOTE 9).

(b)

Net WAC, or weighted average coupon, is the weighted average interest rate of the mortgage loans underlying the indicated investments net of servicing and other fees as of the indicated balance sheet date. Net WAC is expressed as a percentage calculated on an annualized basis on the unpaid principal balances of the mortgage loans underlying these investments. Average yield is presented for the year then ended, and is based on the cash component of interest income expressed as a percentage calculated on an annualized basis on average amortized cost basis (the “cash yield”) less the effects of amortizing investment premiums. Investment premium amortization is determined using the interest method and incorporates actual and anticipated future mortgage prepayments.