4. Mortgage Loans

During the six months ended June 30, 2014 and year ended December 31, 2013, the Company's acquisition of mortgage loans were as follows:

	Aggregate Unpaid		Loan Repurchase
	Principal Balance		Facility Used
Acquisition Date	(in millions)		(in millions)
Year ended December 31, 2013:
March 22, 2013	$	17.7	$	-
May 30, 2013		-		-	⁽¹⁾
May 31, 2013		134.5		78.5
July 25, 2013		162.4		98.7
August 28, 2013		98.2		54.8
Six months ended June 30, 2014:
March 27, 2014		100.4		60.6

____________________

(1)

On May 30, 2013, the Company entered into the Loan Repurchase Facility and utilized $10.6 million of the Loan Repurchase Facility to finance its then existing residential mortgage loan portfolio.

The following table sets forth certain information regarding the Company's mortgage loan portfolio at June 30, 2014:

	Unpaid
	Principal		Premium					Gross Unrealized⁽¹⁾							Weighted Average
	Balance		(Discount)			Amortized Cost		Gains		Losses			Fair Value		Coupon		Yield⁽²⁾
Mortgage Loans
Performing
Fixed	$	282,361,337	$	(54,730,082	)	$	227,631,255	$	24,102,606	$	(1,640,726	)	$	250,093,135	4.51	%	7.03	%
ARM		176,654,287		(23,903,555	)		152,750,732		10,012,628		(830,771	)		161,932,589	3.68		6.94
Total performing		459,015,624		(78,633,637	)		380,381,987		34,115,234		(2,471,497	)		412,025,724	4.19		7.00
Non-performing⁽³⁾		30,948,785		(7,564,059	)		23,384,726		1,013,933		(2,870,663	)		21,527,996	5.09		7.65
Total Mortgage Loans	$	489,964,409	$	(86,197,696	)	$	403,766,713	$	35,129,167	$	(5,342,160	)	$	433,553,720	4.25	%	7.03	%

____________________

(1)		The Company has elected the fair value option pursuant to ASC 825 for its mortgage loans. The Company recorded a gain of $22.0 million and a gain of $1.6 million for the three months ended June 30, 2014 and June 30, 2013, respectively, and $22.7 million and $1.6 million for the six months ended June 30, 2014 and June 30, 2013, respectively, as change in unrealized gain or loss on mortgage loans in the consolidated statements of operations.
(2)		Unleveraged yield.
(3)		Loans that are delinquent for 60 days or more are considered non-performing.

The following table sets forth certain information regarding the Company's mortgage loan portfolio at December 31, 2013:

	Unpaid
	Principal		Premium					Gross Unrealized⁽¹⁾							Weighted Average
	Balance		(Discount)			Amortized Cost		Gains		Losses			Fair Value		Coupon		Yield⁽²⁾
Mortgage Loans
Performing
Fixed	$	212,701,494	$	(43,530,581	)	$	169,170,913	$	7,842,598	$	(3,558,171	)	$	173,455,340	4.56	%	7.05	%
ARM		170,178,466		(25,617,563	)		144,560,903		5,088,302		(1,556,430	)		148,092,775	3.76		6.67
Total performing		382,879,960		(69,148,144	)		313,731,816		12,930,900		(5,114,601	)		321,548,115	4.20		6.88
Non-performing⁽³⁾		15,948,537		(5,031,293	)		10,917,244		456,024		(1,135,841	)		10,237,427	5.06		8.03
Total Mortgage Loans	$	398,828,497	$	(74,179,437	)	$	324,649,060	$	13,386,924	$	(6,250,442	)	$	331,785,542	4.24	%	6.91	%

____________________

(1)		The Company has elected the fair value option pursuant to ASC 825 for its mortgage loans.
(2)		Unleveraged yield.
(3)		Loans that are delinquent for 60 days or more are considered non-performing.

The following table presents the difference between the fair value and the aggregate unpaid principal balance of the Company's mortgage loan portfolio at June 30, 2014 and December 31, 2013:

	June 30, 2014							December 31, 2013
			Unpaid							Unpaid
			Principal							Principal
	Fair Value		Balance		Difference			Fair Value		Balance		Difference
Loan Type
Performing loans:
Fixed	$	250,093,135	$	282,361,337	$	(32,268,202	)	$	173,455,340	$	212,701,494	$	(39,246,154	)
ARM		161,932,589		176,654,287		(14,721,698	)		148,092,775		170,178,466		(22,085,691	)
Total performing loans		412,025,724		459,015,624		(46,989,900	)		321,548,115		382,879,960		(61,331,845	)
Non-performing loans		21,527,996		30,948,785		(9,420,789	)		10,237,427		15,948,537		(5,711,110	)
Total	$	433,553,720	$	489,964,409	$	(56,410,689	)	$	331,785,542	$	398,828,497	$	(67,042,955	)

At June 30, 2014 and December 31, 2013, the Company's mortgage loan portfolio consisted of mortgage loans on residential real estate located throughout the United States. The following is a summary of certain concentrations of credit risk in the mortgage loan portfolio at June 30, 2014 and December 31, 2013:

	June 30, 2014		December 31, 2013
Concentration
Percentage of fair value of mortgage loans with unpaid principal balance to current property value
in excess of 100%	65.5	%	73.6	%
Percentage of fair value of mortgage loans secured by properties in the following states:
Each representing 10% or more of fair value:
California	25.4	%	25.6	%
Florida	16.5	%	17.8	%
Additional state representing more than 5% of fair value:
Georgia	6.4	%	6.8	%

At June 30, 2014, the interest rates on the Company's mortgage loan portfolio ranged from 1.75% - 12.20% and the contractual maturities ranged from 1 - 46 years.

The following table presents the change in accretable yield for the six months ended June 30, 2014:

Accretable yield, January 1, 2014	$	223,401,697
Acquisitions		55,532,098
Accretion		(12,469,507	)
Reclassifications from nonaccretable difference		9,851,517
Accretable yield, June 30, 2014	$	276,315,805