What Lument Finance Trust, Inc. told the SEC could break it.

LFT notes that US tariffs and retaliatory tariffs (e.g. from China), trade barriers and global trade disruption could trigger recession and a decline in real-estate values, impairing the value of its loans and collateral.

“Global trade disruption, significant introductions of trade barriers and bilateral trade frictions, together with any future downturns in the global economy, could result in an economic recession and a decline in real estate values that could impair the value of our loans a”

LFT must continuously satisfy technical REIT asset/income/organizational/distribution tests (even an inadvertent violation could jeopardize REIT status), and a CFTC no-action letter limits its Manager's hedging (commodity-interest margin ≤5% of assets) — constraining operations and tax status.

“Even a technical or inadvertent violation could jeopardize our REIT qualification. Our qualification as a REIT will depend on our satisfaction of certain asset, income, organizational, distribution, stockholder ownership and other requirements on a continuing basis.”

LFT's portfolio is concentrated in floating-rate multifamily/CRE bridge loans whose value depends on sponsors operating collateral properties; it has distressed risk-rated '5' loans (e.g. Dallas, TX) and recognized realized losses selling foreclosed San Antonio properties — significant credit-concentration risk.

“Our commercial mortgage loans and other investments are also subject to credit risk. The performance and value of our loans and other investments depend upon the sponsor's ability to operate properties that serve as our collateral so that they produce cash flows adequate”

Lument Finance Trust is externally managed and relies entirely on its Manager (Lument) for operations, paying management and incentive fees ($4.6M in 2025); it has no employees of its own and is exposed to the Manager's performance and potential conflicts of interest.

“We incurred management and incentive fees of $4,595,458 for the year ended December 31, 2025, representing amounts payable to our Manager under our Management Agreement.”