Note 4 - Residential Mortgage Loans Held in Securitization Trusts (Net) and Real Estate Owned

9 Months Ended

Sep. 30, 2014

Mortgage Loans on Real Estate [Abstract]

Mortgage Loans on Real Estate, by Loan Disclosure [Text Block]

4.                Residential Mortgage Loans Held in Securitization Trusts (Net) and Real Estate Owned

Residential mortgage loans held in securitization trusts (net) consist of the following as of September 30, 2014 and December 31, 2013, respectively (dollar amounts in thousands):

	September 30, 2014			December 31, 2013
Unpaid principal balance	$	155,272		$	165,173
Deferred origination costs – net		984			1,053
Reserve for loan losses		(3,354	)		(2,989	)
Total	$	152,902		$	163,237

Allowance for Loan Losses - The following table presents the activity in the Company's allowance for loan losses on residential mortgage loans held in securitization trusts for the nine months ended September 30, 2014 and 2013, respectively (dollar amounts in thousands):  

	Nine months Ended September 30,
	2014			2013
Balance at beginning of period	$	2,989		$	2,978
Provisions for loan losses		654			568
Transfer to real estate owned		(289	)		(268	)
Charge-offs		—			(109	)
Balance at the end of period	$	3,354		$	3,169

On an ongoing basis, the Company evaluates the adequacy of its allowance for loan losses. The Company’s allowance for loan losses as of September 30, 2014 was $3.4 million, representing 216 basis points of the outstanding principal balance of residential loans held in securitization trusts as of September 30, 2014, as compared to 181 basis points as of December 31, 2013. As part of the Company’s allowance for loan loss adequacy analysis, management will assess an overall level of allowances while also assessing credit losses inherent in each non-performing residential 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 residential securitization trusts for the nine months ended September 30, 2014 and 2013, respectively (dollar amounts in thousands):

	Nine months Ended September 30,
	2014			2013
Balance at beginning of period	$	1,108		$	732
Write downs		(103	)		(209	)
Transfer from mortgage loans held in securitization trusts		241			621
Disposal		(577	)		(374	)
Balance at the end of period	$	669		$	770

Real estate owned held in residential securitization trusts are included in receivables and other assets on the accompanying condensed consolidated balance sheets and write downs are included in provision for loan losses in the accompanying condensed consolidated statements of operations for reporting purposes.

All of the Company’s mortgage loans and real estate owned held in residential securitization trusts are pledged as collateral for the Residential CDOs issued by the Company.  As of September 30, 2014 and December 31, 2013, the Company’s net investment in the residential securitization trusts, which is the maximum amount of the Company’s investment that is at risk to loss and represents the difference between (i) the carrying amount of the mortgage loans and real estate owned held in residential securitization trusts and (ii) the amount of Residential CDOs outstanding, was $5.8 million and $6.6 million, respectively.

Delinquency Status of Our Residential Mortgage Loans Held in Securitization Trusts

As of September 30, 2014, we had 33 delinquent loans with an aggregate principal amount outstanding of approximately $18.0 million categorized as Residential Mortgage Loans Held in Securitization Trusts (net). Of the $18.0 million in delinquent loans, $9.4 million, or 52%, are under some form of temporary modified payment plan. The table below shows delinquencies in our portfolio of residential mortgage loans held in securitization trusts, including real estate owned (“REO”) through foreclosure, as of September 30, 2014 (dollar amounts in thousands):

September 30, 2014

Days Late			Number of Delinquent Loans		Total Unpaid Principal		% of Loan Portfolio
30	-	60		1	$	234		0.15	%
61	-	90		2	$	492		0.31	%
	90 +			30	$	17,306		11.02	%
Real estate owned through foreclosure				5	$	1,799		1.15	%

As of December 31, 2013, we had 34 delinquent loans with an aggregate principal amount outstanding of approximately $18.9 million categorized as Residential Mortgage Loans Held in Securitization Trusts (net). Of the $18.9 million in delinquent loans, $9.1 million, or 48%, are under some form of modified payment plan. The table below shows delinquencies in our portfolio of residential mortgage loans held in securitization trusts, including real estate owned through foreclosure (REO), as of December 31, 2013 (dollar amounts in thousands):

December 31, 2013

Days Late			Number of Delinquent Loans		Total Unpaid Principal		% of Loan Portfolio
30	-	60		3	$	601		0.36	%
61	-	90		1	$	239		0.14	%
	90 +			30	$	18,036		10.76	%
Real estate owned through foreclosure				5	$	2,381		1.42	%

The geographic concentrations of credit risk exceeding 5% of the total loan balances in our residential mortgage loans held in securitization trusts and real estate owned held in residential securitization trusts as of September 30, 2014 and December 31, 2013 are as follows:

	September 30, 2014			December 31, 2013
New York		35.6	%		35.9	%
Massachusetts		24.8	%		24.6	%
New Jersey		10.8	%		10.4	%
Florida		6.1	%		5.8	%
Connecticut		5.9	%		5.6	%