6. Loan Repurchase Facility

The Loan Repurchase Facility is used to fund purchases of the Company's mortgage loans, including the March 27, 2014 purchase of a residential mortgage loan portfolio with an unpaid principal balance of approximately $100.4 million at the time of acquisition. The Loan Repurchase Facility closed on May 30, 2013, and is committed for a period of 364 days from inception. The obligations are fully guaranteed by the Company. On March 27, 2014, the Company entered into an amendment of the Loan Repurchase Facility providing it with an additional $75 million of uncommitted borrowing capacity. As of March 31, 2014, the Company's total borrowing capacity is $325.0 million. The Company is in discussions with the lender and expects to renew the Loan Repurchase Facility for an additional 364 day commitment period prior to the expiration of the initial commitment period. However, the renewal is subject to the finalization of definitive agreements and there can be no assurance that the renewal will occur.

The principal amount paid by Citi under the Loan Repurchase Facility for the Trust Certificate, which represent interests in residential mortgage loans, is based on a percentage of the lesser of the market value or the unpaid principal balance of such mortgage loans backing the Trust Certificate. Upon the Company's repurchase of a Trust Certificate sold to Citi under the Loan Repurchase Facility, the Company is required to repay Citi a repurchase amount based on the purchase price plus accrued interest. The Company is also required to pay Citi a commitment fee for the Loan Repurchase Facility, as well as certain other administrative costs and expenses in connection with Citi's structuring, management and ongoing administration of the Loan Repurchase Facility. The commitment fee is included in interest expense in the consolidated statements of operations.

The Loan Repurchase Facility contains margin call provisions that provide Citi with certain rights in the event of a decline in the market value of the mortgage loans backing the purchased Trust Certificate, subject to a floor amount. Under these provisions, Citi may require the Company to transfer cash sufficient to eliminate any margin deficit resulting from such a decline.

The following table presents certain information regarding the Company's Loan Repurchase Facility as of March 31, 2014 and December 31, 2013, by remaining maturity:

	March 31, 2014				December 31, 2013
			Weighted				Weighted
	Balance		Average Rate		Balance		Average Rate
Loan Repurchase Facility borrowings maturing within
31-60 days	$	297,401,891	2.90	%		-	-
91 - 180 days		-	-		$	236,058,976	2.92	%
Total/weighted average	$	297,401,891	2.90	%	$	236,058,976	2.92	%

The following table presents information with respect to the Company's posting of mortgage loan collateral for the Loan Repurchase Facility as of March 31, 2014 and December 31, 2013:

	March 31, 2014		December 31, 2013
Loan Repurchase Facility secured by mortgage loans	$	297,401,891	$	236,058,976
Fair value of Trust Certificates pledged as collateral under Loan Repurchase Facility		415,348,056		331,522,165
Fair value of mortgage loans not pledged as collateral under Loan Repurchase Facility		265,655		263,377
Cash pledged as collateral under Loan Repurchase Facility		-		-
Unused Amount⁽¹⁾		27,598,109		13,941,024

____________________

(1)

The amount the Company is able to borrow under the Loan Repurchase Facility is tied to the fair value of unencumbered Trust Certificates eligible to secure those agreements and the Company's ability to fund the agreements' margin requirements relating to the collateral sold.

The following table presents additional information with respect to the Loan Repurchase Facility:

	Three Months Ended
	March 31, 2014			March 31, 2013
During the period:
Weighted average interest rate		2.91	%	-
Average balance of loans sold under agreements to repurchase	$	192,380		-
Maximum daily amount outstanding	$	297,524,403		-
Total interest expense	$	1,830,907		-