But we certainly are not exploring anything, we don’t have any plans for that and we’re committed to the company. We’ve continued to add capital. And we think that many, many different ways that this company can generate the kind of earnings when it was much smaller it was generating, look, made over $30 million just a few years ago. There are regulatory changes that could happen that would completely change the landscape as well in a positive way. So there’s just — there’s a lot of option value here. And even more than option value, just actual opportunity that looks like it’s coming in earnings that are growing pretty soon.
Matthew Howlett: Yes. That’s what the HECM program indeed. The originations, the decline is just due to seasonal factors and obviously higher rates and slow housing. So there’s been no change with HECM and is that nothing big — nothing ominous in HECM, you said the program actually could be changing…
Laurence Penn: Well, yes. There’s been no — right. So there haven’t been any major regulatory changes recently, but there could be some positive ones coming, it’s very possible. So — and I’ll just say, those stemmed from — there was a bankruptcy pretty notable at the end of 2022 of a very large reverse mortgage originator. And since then the regulators have been thinking well. Is it possible that we can make things a little easier on the originators and servicer? So it’s — these are things that again we’re not counting on them, but they are just add I think additional option value to the whole franchise and proposition.
Matthew Howlett: Great. And then just a final question on the non-QM. I think you said your home prices have risen. Love to hear just sort of why that is? And then you envision going back to sort of getting the securitization at some point or you’ll just take these cash of home loan prices and you just keep it going. I mean, obviously, LendSure, American Heritage are doing great. Just talk about the outlook on the non-QM gain on sale?
Laurence Penn: Yes. Look, we continue to buy non-QM at originated. We’re very flexible in terms of what we do with the product. And whether it’s hold it, it’s been quite a while actually since we did a securitization. So we’ve been holding loans for a long time and earnings spread while they’re on repo. That’s certainly we could hold loans forever that way. We can also securitize them. But we’re only going to take that step to securitize them when we think that the securitization spreads are the best outcome securitizing and locking in that long-term cost of funds at attractive levels. And then of course the third one, which again, we haven’t historically done so much, but there’s a very strong bid especially from insurance companies that’s been in the market recently.
And we just decided seeing one of those bids that that was at the time the right thing to do was to sell, take the gain on sale and potentially reload later at wider spreads. These are decisions that we make as portfolio managers kind of all the time. It’s great to have space to be able to hold these long-term if we need to and just earn that spread, that’s the business we’re in. Obviously, there are lot of originators that can do that, they have to sell.
Matthew Howlett: It gives you plenty of optionality. I appreciate it. Thanks a lot.
Laurence Penn: Thanks.
JR Herlihy: Thanks, Matt.
Operator: That was our final question for today. We thank you for participating in the Ellington Financial fourth quarter and full-year 2023 earnings conference call. You may disconnect your line at this time and have a wonderful day.
