In the following video, Motley Fool financial analyst Matt Koppenheffer takes a deep look at Annaly Capital 's earnings report. While a lot of the report initially seemed very positive, Matt highlights one factor he found somewhat worrying: prepayments. When mortgage borrowers pay back their loans early, mortgage-backed security investors like Annaly suffer because they don't get to collect the interest that was expected over the life of the loan. As of Q4, Annaly continues to struggle with a relatively high prepayment rate in its MBSes. Matt details this headwind for Annaly and also gives some of the more positive takeaways from the company's earnings. Annaly has a history of paying huge dividends to shareholders. But there are some crucial issues that investors have to understand about Annaly's business model before buying the stock.