6. Loan Repurchase Facility

The Loan Repurchase Facility is used to fund purchases of the Company's mortgage loans. The Loan Repurchase Facility closed on May 30, 2013 with a borrowing capacity of $250.0 million, and was committed for a period of 364 days from inception. On March 27, 2014, the Company entered into an amendment of the Loan Repurchase Facility providing it with an additional $75.0 million of uncommitted borrowing capacity. On May 23, 2014 the Company entered into an amendment with Citi extending the termination date of the facility to May 22, 2015. The obligations are fully guaranteed by the Company.

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 at June 30, 2014 and December 31, 2013, by remaining maturity:

	June 30, 2014				December 31, 2013
			Weighted Average				Weighted Average
	Balance		Rate		Balance		Rate
Loan Repurchase Facility borrowings maturing within
91-180 days	$	-	-	%	$	236,058,976	2.92	%
Greater than 180 days to 1 year		293,609,481	2.90			-	-
Total/weighted average	$	293,609,481	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 at June 30, 2014 and December 31, 2013:

	June 30, 2014		December 31, 2013
Loan Repurchase Facility secured by mortgage loans	$	293,609,481	$	236,058,976
Fair value of Trust Certificates pledged as collateral under Loan Repurchase Facility		433,299,627		331,522,165
Fair value of mortgage loans not pledged as collateral under Loan Repurchase Facility		254,093		263,377
Cash pledged as collateral under Loan Repurchase Facility		-		-
Unused Amount⁽¹⁾		31,390,519		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						Six Months Ended
	June 30, 2014			June 30, 2013			June 30, 2014			June 30, 2013
Weighted average interest rate		2.93	%		2.94	%		2.92	%		2.94	%
Average balance of loans sold under
agreements to repurchase	$	-		$	266,499		$	192,380		$	266,499
Maximum daily amount outstanding	$	297,401,891		$	89,112,325		$	297,401,891		$	89,112,325
Total interest expense	$	2,260,080		$	289,296		$	4,090,987		$	289,296