ANWORTH MORTGAGE ASSET CORPORATION (NYSE:ANH) Files An 8-K Material Modification to Rights of Security Holders

Item 3.03

On December 30, 2016, Anworth Mortgage Asset Corporation
(Anworth) announced that, in accordance with the terms of
Anworths 6.25% Series B Cumulative Convertible Preferred Stock
(the Series B Preferred Stock), the conversion rate of the Series
B Preferred Stock will increase from 4.7329 shares of Anworths
common stock to 4.7932 shares of its common stock effective
January 3, 2017.

As previously announced, the board of directors of Anworth
declared, on December 16, 2016, a quarterly common stock dividend
of $0.15 per share, which is payable on January 30, 2017 to
holders of record of Anworths common stock as of the close of
business on December 30, 2016. When Anworth pays a cash dividend
during any quarterly fiscal period to its holders of common stock
in an amount that results in an annualized common stock dividend
yield greater than 6.25% (the dividend yield on the Series B
Preferred Stock), the conversion rate on the Series B Preferred
Stock is adjusted based on a formula specified in the Articles
Supplementary Establishing and Fixing the Rights and Preferences
of the Series B Preferred Stock. As a result of this dividend,
the conversion rate of the Series B Preferred Stock will increase
from 4.7329 shares of Anworths common stock to 4.7932 shares of
its common stock effective January 3, 2017.

On December 30, 2016, Anworth issued a press release (the Press
Release) announcing that in accordance with the terms of Anworths
6.25% Series B Cumulative Convertible Preferred Stock (Series B
Preferred Stock), the conversion rate of the Series B Preferred
Stock will increase from 4.7329 shares of Anworths common stock
to 4.7932 shares of its common stock effective January 3, 2017.

A copy of the Press Release is filed as Exhibit 99.1 to this
Current Report on Form 8-K.

As discussed therein, the Press Release contains forward-looking
statements within the meaning of Section 27A of the Securities
Act and Section 21E of the Exchange Act and, as such, may involve
known and unknown risks, uncertainties and assumptions. These
forward-looking statements relate to Anworths current
expectations and are subject to the limitations and
qualifications set forth in the press release as well as in
Anworths other documents filed with the U.S. Securities and
Exchange Commission, including, without limitation, that actual
events and/or results may differ materially from those projected
in such forward-looking statements.

About ANWORTH MORTGAGE ASSET CORPORATION (NYSE:ANH)

Anworth Mortgage Asset Corporation is a real estate investment trust (REIT). The Company’s investment objective is to provide risk-adjusted total returns to its stockholders over the long-term through dividends and through capital appreciation. Its strategy is to invest in residential mortgage-backed securities (MBS) and residential mortgage loans. Its principal business objective is to generate net income for distribution to its stockholders based upon the spread between the interest income on its mortgage assets and its borrowing costs to finance its acquisition of those assets. It finances residential mortgage loans through asset-backed securities issued by the consolidated securitization trusts. It also has a small portfolio of residential real estate properties. The Company is engaged in investing in, financing and managing a portfolio of residential mortgage-backed securities and residential mortgage loans. It is managed and advised by Anworth Management, LLC (Manager).

ANWORTH MORTGAGE ASSET CORPORATION (NYSE:ANH) Recent Trading Information

ANWORTH MORTGAGE ASSET CORPORATION (NYSE:ANH) closed its last trading session down -0.03 at 5.17 with 448,649 shares trading hands.