Real Estate Owned

3 Months Ended

Mar. 31, 2015

Real Estate [Abstract]

Real Estate Owned

Real Estate Owned

At March 31, 2015, the Company had 66 REO properties with an aggregate carrying value of $8.3 million. At December 31, 2014, the Company had 46 REO properties with an aggregate carrying value of $5.5 million. During the three months ended March 31, 2015, the Company did not acquire any residential properties in connection with the acquisition of residential whole loans.

During the three months ended March 31, 2015, the Company transferred 25 mortgage loans to REO at an aggregate fair value of $4.0 million. Such transfers occur when the Company takes possession of the property by foreclosing on the borrower or completes a “deed-in-lieu of foreclosure” transaction. At March 31, 2015 the aggregate carrying value of these assets based on management’s estimate of fair value less estimated selling costs was $3.4 million. In connection with these transfers, the Company recorded a net gain of approximately $285,000 in Net income on residential whole loans held at fair value on the Company’s consolidated statements of operations.

At March 31, 2015, $6.3 million of residential real estate property was held by the Company that was acquired either through a completed foreclosure proceeding or from completion of a deed in lieu of foreclosure or similar legal agreement. In addition, formal foreclosure proceedings were in process with respect to $9.8 million of residential whole loans at carrying value and $82.8 million of residential whole loans at fair value at March 31, 2015.

During the three months ended March 31, 2015, the Company sold five REO properties for consideration of $581,000, realizing a net loss of $26,000 which is included in Other, net on the Company’s consolidated statement of operations.

The following table presents the activity in the Company’s REO for the three months ended March 31, 2015. The Company did not have REO during the three months ended March 31, 2014.

(In Thousands)	Three Months Ended   March 31, 2015
Balance at beginning of period	$	5,492
Transfer from residential whole loans (1)	3,448
Disposals	(607		)
Balance at end of period	$	8,333

(1)  Includes gain recorded on transfer of approximately $285,000.

Real estate owned is included in Prepaid and other assets in the Company’s consolidated balance sheets.