INTERVIEW OF WILLIAM S. GORIN, DATED 11/26/2003

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Questioning Market Leaders For Long Term Investors

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WILLIAM GORIN - MFA MORTGAGE INVESTMENTS INC (MFA)
CEO Interview - published 11/26/2003

DOCUMENT # SAB254

WILLIAM S. GORIN is Chief Financial Officer and Executive Vice President of MFA
Mortgage Investments, Inc. Previously, he was Executive Vice President of the
America First Companies. Prior to joining America First, Mr. Gorin was First
Vice President in the equity research department of Paine Webber Incorporated.
Prior to that, he served as an investment banker at Kidder Peabody and E.F.
Hutton. Mr. Gorin holds an MBA from the Stanford University Graduate School of
Business. He graduated form Brandeis University with a BA in Economics.

Sector: REITS

TWST: Could you give us an overview of MFA Mortgage Investments' operations?

Mr. Gorin: MFA Mortgage Investments, Inc., is a real estate investment trust
with the objective of generating distributable net income primarily from
investment in high quality, hybrid, and adjustable rate mortgage-backed
securities. Currently, approximately 99% of assets are mortgage-backed
securities issued or guaranteed by Fannie Mae, Freddie Mac or Ginnie Mae,
securities rated AAA by S&P and cash. MFA also owns interests in three
multifamily apartment properties. MFA utilizes leverage in the form of
repurchase agreements in the acquisition of its mortgage-backed securities. MFA
maintains an asset to equity ratio of less than 11 times. We believe this ratio
is conservative relative to other financial institutions that hold a comparable
percentage of assets in high-grade mortgage-backed securities. MFA invests in
hybrid and adjustable rate mortgage-backed securities. The hybrid
mortgage-backed securities that MFA owns are adjustable rate mortgage-backed
securities for which the initial interest rate is fixed for a period of time,
typically three to five years, converting to an adjustable rate for the
remaining term. MFA completed two equity offerings in 2003. The first offering
occurred in May, at which time we raised about $67 million, and the second
occurred in August and generated net proceeds of approximately $53 million. Year
to date, MFA continues to generate strong financial results reflecting a 13.9%
return on equity in the first nine months of this year. As previously mentioned,
MFA has approximately 99% of its assets in high quality securities and cash.
With extremely low levels of credit risk, the company has been able to generate
very attractive quarterly dividends. For the first three quarters of 2003, MFA's
dividends totaled $0.84 per share, and the stock is trading near $9.75. The
strength of MFA's asset strategy is owning high quality assets that are liquid
and easy to finance. The portfolio consists of one-year and hybrid 3/1 and 5/1
securities. Our assets have coupons that reset based on short-term interest
rates, so they do react to interest rate changes. Due to the fact that the
coupons of our assets reset, our assets face less price risk than fixed-rate
securities.


TWST: Could you give us the total assets that you have at this point?

Mr. Gorin: As of the end of the third quarter of 2003, our assets were
approximately $4.3 billion, with an asset to equity ratio of approximately
9.2:1.

TWST: Could you tell us how the current interest rate situation is impacting
your portfolio? I'm specifically talking about the accelerated prepayment rate
we saw in the third quarter and of course the subsequent rise in long-term
rates.

Mr. Gorin: We see some significant positives in the current interest rate
environment. The first of these is the positive slope of the yield curve.
Short-term interest rates are lower than long-term interest rates, and therefore
adjustable rate mortgages make sense for homeowners. As a result, there is an
ample supply of adjustable rate and hybrid mortgage-backed securities today. For
example, recent data shows that a 30-year fixed-rate mortgage might bear an
interest rate cost of approximately 6% if you are a homeowner, but an adjustable
rate mortgage might cost a much lower 3.75%. So there is a very large incentive
for a homeowner to take out an adjustable rate mortgage rather than a fixed rate
mortgage. The second significant positive is that while earlier in the year,
interest rates declined to historic lows resulting in very high mortgage
prepayment rates, we do not anticipate that interest rates will continue this
decline (in fact they have increased) and we therefore expect that prepayment
rates will trend down. In our third quarter conference call, we indicated that
while we do not expect that prepayment rates will fall off the table, we do
expect them to trend down. A period of a continued slowdown in mortgage
prepayments should have a positive impact over the next couple of quarters.

TWST: As far as the adjustable rate interest rates are concerned, what is that
interest rate tied to and what would happen if short-term rates do rise?

Mr. Gorin: Adjustable rate mortgages are primarily based on Libor and the
one-year Constant Maturity Treasury. To a lesser extent, some adjustable-rate
mortgages are based on COFI and other indices. If interest rates change, the
coupon on the adjustable-rate mortgages will reset, albeit with a lag. If it is
an adjustable rate mortgage the coupon will reset within twelve months. If it is
a hybrid mortgage, where the initial coupon is set for three to five years, you
would have to wait that period of time before the coupon adjusts to then current
interest rates.

TWST: When you reported your earnings on October 29, MFA's CEO Stewart Zimmerman
talked about how prepayment has impacted your net margin interest. Could you
comment on that?

Mr. Gorin: As you correctly point out, during the third quarter of 2003 our
yield and interest-earnings assets were negatively impacted by high prepayment
speeds in the mortgage-backed securities portfolio, which resulted in
accelerated amortization of purchase premium. While the gross yield on MFA's
interest earning assets was approximately 4.36%, the net yield on interest
earning assets was reduced to 2.61% due primarily to premium amortization. Our
spread, which is the difference between our interest earning asset yield of
2.61% and our 1.46% cost of funds was 1.15% for the third quarter. The main
difference between the 4.36% coupon and the 2.61% yield was premium amortization
due to the very rapid prepayment rate. The prepayment speed for the quarter was
41% constant prepayment rate or CPR. With average equity in the quarter of
approximately $440 million and an average debt to equity ratio of 8.28x, MFA
generated a 10.74% return on average equity in the quarter.


TWST: As you look ahead, what is your strategy for success? Is it more of the
same?

Mr. Gorin: Our strategy for success has been to run the company conservatively.
We focus on high credit quality assets. 99% of our assets are guaranteed by
Fannie Mae, Freddie Mac or Ginnie Mae, are rated AAA or are cash. Our strategy
has been to invest in adjustable rate and hybrid ARMS, not fixed rate mortgage
securities, so we have less interest rate risk. We maintain a conservative
leverage ratio of less than 11 times, we limit our leverage by discipline, and
like to be less levered so we have the opportunity to take advantage of market
conditions. For now, our strategy is to continue doing what we have been doing,
which is to run a conservative company with the goal of generating double digit
return on equity.

TWST: Could you share with us your short-term financial outlook?

Mr. Gorin: For the third quarter we earned $0.21, and our spread was 1.15%. We
do anticipate that prepayments will trend down as mortgage rates no longer test
historic lows. We therefore expect that fourth quarter results will reflect some
of this anticipated slowdown in prepayments.

TWST: What about your long-term financial goals?

Mr. Gorin: Our long-term financial goals are to maintain a conservative leverage
ratio and a high quality liquid asset base. We aim to continue to generate
attractive spreads resulting in double-digit returns on equity.

TWST: What worries you the most?

Mr. Gorin: We are a very efficient owner and holder of adjustable rate
mortgage-backed securities, so when adjustable rate mortgages are attractive to
the consumer, we generate strong returns. Adjustable rate mortgages are
attractive when short-term interest rates are lower than long-term interest
rates, which is the norm. In an inverted yield curve environment, adjustable
rate mortgages do not necessarily make sense to homeowners. If short-term rates
are higher than long-term rates, a homeowner can take out a 30-year mortgage
with a lower interest rate than an adjustable rate mortgage, in which case most
adjustable rate mortgages will prepay and there will be very few new ones
originated.

TWST: Do you have the management team in place to accomplish all of your goals?

Mr. Gorin: Our management team has three key players and I think a strong bench
behind it. Certainly the most important officer is Stewart Zimmerman, who is the
President and CEO. Stewart has close to 40 years of mortgage trading, sales, and
finance experience. He has previously served as head of the mortgage trading
and/or sales desk at Lehman, E.F. Hutton, and Security Pacific. I am the
Executive VP and CFO. I have approximately 20 years of Wall Street experience as
both an investment banker and a research analyst. Ron Freydberg is Executive
Vice President. He also has close to 20 years of experience in mortgage sales,
quantitative analysis and securitization. Ron is the main interface with the
Street for mortgage assets and reverse repurchase agreements. Supporting us is a
strong team of officers with broad experience in mortgage-backed securities and
finance.

TWST: Do you expect any near-term significant changes to your balance sheet
structure?

Mr. Gorin: We expect to continue running the leverage ratio of assets to equity
of less than 11 times, and primarily invest in AAA assets. So there will be no
significant changes to the way our balance sheet will appear.

TWST: What is your current dividend policy?

Mr. Gorin: Our current dividend policy as a REIT is to distribute at least 90%
of our taxable income.

TWST: What do you think of your current stock price?

Mr. Gorin: Basically MFA's strategy is straightforward, which is very important
in today's environment. We earn a spread on agency mortgage securities. Many
investors prefer that clarity and find our share price very attractive,
particularly on a p/e basis relative to banks and S&Ls.


TWST: If you were speaking directly to a shareholder, what would be some of the
key investment messages that you would like to convey?

Mr. Gorin: The first thing I would want to emphasize is we focus on high quality
assets. These assets are liquid and easy to refinance. Second, we invest in
hybrid and adjustable rate mortgage-backed securities. The coupons of these
assets reset based on short-term interest rates, so there is less price risk due
to the fact that we have adjustable coupons. And third, we maintain a
conservative asset-to-equity ratio of less than 11 times. We use discipline to
set our leverage levels, and we maintain extra buying power to take advantage of
investment opportunities.

TWST: Thank you. (WT)

WILLIAM S. GORIN
Executive Vice President & CFO
MFA Mortgage Investments, Inc.
350 Park Avenue
21st Floor
New York, NY 10022
(212) 207-6400
(212) 207-6420 - FAX
www.mfa-reit.com
e-mail: contact@mfa-reit.com

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