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Note 3 - Mortgage Loans Held in Securitization Trusts and Real Estate Owned
 12 Months Ended
Dec. 31, 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 at December 31, 2011 and 2010, respectively (dollar amounts in thousands):

   
December 31,
 
   
2011
   
2010
 
Mortgage loans principal amount
 
$
208,934
   
$
229,323
 
Deferred origination costs – net
   
1,317
     
1,451
 
Reserve for loan losses
   
(3,331)
     
(2,589)
 
Total
 
$
206,920
   
$
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 years ended December 31, 2011 and 2010, respectively (dollar amounts in thousands):  

   
Years ended December 31,
 
   
2010
   
2010
 
Balance at beginning of period
 
$
2,589
   
$
2,581
 
Provisions for loan losses
   
1,380
     
1,560
 
Transfer to real estate owned
   
(192)
     
(564)
 
Charge-offs
   
(446)
     
(988)
 
Balance at the end of period
 
$
3,331
   
$
2,589
 

On an ongoing basis, the Company evaluates the adequacy of its allowance for loan losses.  The Company’s allowance for loan losses at December 31, 2011 was $3.3 million, representing 159 basis points of the outstanding principal balance of loans held in securitization trusts as of December 31, 2011, as compared to 113 basis points as of December 31, 2010.  As part of the Company’s allowance for loan 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, 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 years ended December 31, 2011 and 2010, respectively (dollar amounts in thousands):

   
December 31,
 
   
2011
   
2010
 
Balance at beginning of period
 
$
740
   
$
546
 
Write downs
   
(87)
     
(193
) 
Transfer from mortgage loans held in securitization trusts
   
698
     
1,398
 
Disposal
   
(897)
     
(1,011
) 
Balance at the end of period
 
$
454
   
$
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 CDOs issued by the Company.  As of December 31, 2011 and 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 $7.6 million and $8.9 million, respectively.

Delinquency Status of Our Mortgage Loans Held in Securitization Trusts

As of December 31, 2011, we had 38 delinquent loans with an aggregate principal amount outstanding of approximately $21.0 million categorized as Mortgage Loans Held in Securitization Trusts (net).  Of the $21.0 million in delinquent loans, $18.0 million, or 86%, are currently under some form of modified payment plan.  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, 2011 (dollar amounts in thousands):

December 31, 2011

Days Late
 
Number of Delinquent 
Loans
 
Total
Dollar Amount
 
% of Loan
Portfolio
 
30-60
 
2
 
$
517
 
0.25
%
61-90
 
1
 
$
378
 
0.18
%
90+
 
35
 
$
20,138
 
9.61
%
Real estate owned through foreclosure
 
3
 
$
656
 
0.31
%

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, $17.8 million, or 71%, are currently under some form of modified payment plan.  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):

December 31, 2010

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
%