XML 23 R9.htm IDEA: XBRL DOCUMENT  v2.3.0.11
Note 3 - Mortgage Loans Held in Securitization Trusts and Real Estate Owned
 3 Months Ended
Jun. 30, 2011
Mortgage Loans on Real Estate, by Loan Disclosure [Text Block]
3.  Mortgage Loans Held in Securitization Trusts and Real Estate Owned

Mortgage loans held in securitization trusts (net) consist of the following as of June 30, 2011 and December 31, 2010, respectively (dollar amounts in thousands):

  
 
June 30,
2011
   
December 31,
2010
 
Mortgage loans principal amount 
 
$
218,605
   
$
229,323
 
Deferred origination costs – net
   
1,377
     
1,451
 
Reserve for loan losses
   
(2,897)
     
(2,589)
 
Total
 
$
217,085
   
$
228,185
 

Allowance for Loan losses - The following table presents the activity in the Company's allowance for loan losses on mortgage loans held in securitization trusts for the six months ended June 30, 2011 and 2010, respectively (dollar amounts in thousands): 

   
Six Months Ended June 30,
 
   
2011
   
2010
 
Balance at beginning of period
 
$
2,589
   
$
2,581
 
Provisions for loan losses
   
769
     
493
 
Transfer to real estate owned
   
(16)
     
(383)
 
Charge-offs
   
(445)
     
(218)
 
Balance at the end of period
 
$
2,897
   
$
2,473
 

On an ongoing basis, the Company evaluates the adequacy of its allowance for loan losses.  The Company’s allowance for loan losses at June 30, 2011 was $2.9 million, representing 133 basis points of the outstanding principal balance of loans held in securitization trusts as of June 30, 2011, as compared to 113 basis points as of December 31, 2010.  As part of the Company’s allowance for loan losses adequacy analysis, management will assess an overall level of allowances while also assessing credit losses inherent in each non-performing mortgage loan held in securitization trusts. These estimates involve the consideration of various credit related factors, including but not limited to, current housing market conditions, current loan to value ratios, delinquency status, the borrower’s current economic and credit status and other relevant factors.

Real Estate Owned – The following table presents the activity in the Company’s real estate owned held in securitization trusts for the six months ended June 30, 2011 and the year ended December 31, 2010 (dollar amounts in thousands):

   
June 30,
2011
   
December 31,
2010
 
Balance at beginning of period
 
$
740
   
$
546
 
Write downs
   
(47)
     
(193)
 
Transfer from mortgage loans held in securitization trusts
   
218
     
1,398
 
Disposal
   
(175)
     
(1,011)
 
Balance at the end of period
 
$
736
   
$
740
 

Real estate owned held in securitization trusts are included in receivables and other assets on the balance sheet and write downs are included in provision for loan losses in the statement of operations for reporting purposes.

All of the Company’s mortgage loans and real estate owned held in securitization trusts are pledged as collateral for the collateralized debt obligations (“CDOs”) issued by the Company.  As of June 30, 2011 and December 31, 2010, the Company’s net investment in the securitization trusts, which is the maximum amount of the Company’s investment that is at risk to loss and represents the difference between the carrying amount of the loans and real estate owned held in securitization trusts and the amount of CDOs outstanding, was $8.1 million and $8.9 million, respectively.

Delinquency Status of Our Mortgage Loans Held in Securitization Trusts

As of June 30, 2011, we had 40 delinquent loans with an aggregate principal amount outstanding of approximately $22.1 million categorized as Mortgage Loans Held in Securitization Trusts (net).  Of the $22.1 million in delinquent loans, $18.3 million, or 83%, are currently under some form of modified payment plan.  As these borrowers are not current, they continue to be reported as delinquent even though they are working towards a credit resolution.  The table below shows delinquencies in our portfolio of loans held in securitization trusts, including real estate owned through foreclosure (REO), as of June 30, 2011 (dollar amounts in thousands):

Days Late
   
Number of
Delinquent
Loans
   
Total
Dollar
Amount
   
% of
Loan
Portfolio
 
30-60      
2
   
$
1,274
     
0.58
%
61-90      
2
     
3,255
     
1.48
%
90+      
36
     
17,552
     
7.99
%
Real estate owned through foreclosure
     
4
     
945
     
0.43
%

As of December 31, 2010, we had 46 delinquent loans with an aggregate principal amount outstanding of approximately $25.1 million categorized as Mortgage Loans Held in Securitization Trusts (net).  Of the $25.1 million in delinquent loans as of December 31, 2010, $17.8 million, or 71%, were under some form of modified payment plan.  Because these borrowers were not current as of December 31, 2010, they have been reported as delinquent even though they were working towards a credit resolution.  The table below shows delinquencies in our portfolio of loans held in securitization trusts, including real estate owned through foreclosure (REO), as of December 31, 2010 (dollar amounts in thousands):

Days Late
   
Number of
Delinquent
Loans
   
Total
Dollar
Amount
   
% of
Loan
Portfolio
 
30-60      
7
   
$
2,515
     
1.09
%
61-90      
4
     
4,362
     
1.89
%
90+      
35
     
18,191
     
7.90
%
Real estate owned through foreclosure
     
3
     
894
     
0.39
%