Exhibit 10.6

Termination Agreement

This TERMINATION AGREEMENT (this “ Agreement ”) is entered into as of December 31, 2011, by and between Anworth Mortgage Asset Corporation, a Maryland corporation (the “ Company ”), and Joseph Lloyd McAdams (the “ Executive ”).  The above parties are referred to collectively herein as the “ Parties ” and individually as a “ Party ”.

RECITALS

WHEREAS, the Executive and Anworth Mortgage Advisory Corporation have entered into an employment agreement dated as of January 1, 2002, which was subsequently assumed by the Company, and the Company and the Executive have since entered into a number of addendums to such agreement (as amended to date, the “ Employment Agreement ”);

WHEREAS, the Company and Anworth Management, LLC (the “ Manager ”) have entered into a Management Agreement dated as of December 31, 2011 (the “ Management Agreement ”), and in connection therewith, the Company is now externally managed by the Manager, with the Company’s day-to-day operations conducted by the Manager through the authority delegated to it under the Management Agreement and pursuant to the policies established by the Company’s board of directors (the “ Externalization ”); and

WHEREAS, in connection with the Externalization, the Parties desire to terminate the Employment Agreement because the Company will operate as an ent