NOTE 12 - MSRs

During the six months ended June 30, 2015, the Company retained the servicing rights associated with an aggregate principal balance of $538,643,377 of residential mortgage loans that the Company had previously transferred to three residential mortgage loan securitization trusts. The Company’s MSRs are held and managed at the Company’s TRS, and the Company employs one or more licensed sub-servicers to perform the related servicing activities. To the extent that the Company determines it is the primary beneficiary of a residential mortgage loan securitization trust into which it has sold loans, any associated MSRs are eliminated on the consolidation of the trust. The trust is contractually obligated to pay a portion of the interest payments from the associated residential mortgage loans for the direct servicing of the loans, and after deduction of sub-servicing fees payable to contracted sub-servicers, the net amount, excess servicing rights, represents a liability of the trust. Upon consolidation of the trust, the fair value of the excess servicing rights is equal to the related MSRs held at our TRS. As the result of the Company’s determination that it is not the primary beneficiary of OAKS Mortgage Trust 2015-1, it does not consolidate this trust, and as a consequence, MSRs associated with this trust are recorded on the Company’s condensed consolidated balance sheet at June 30, 2015.

The following table presents the Company’s MSR activity for the three months ended June 30, 2015.

	Three Months Ended June 30, 2015
Balance at beginning of period	$	-
MSRs retained from sales to securitizations		2,457,373
Balance at end of year	$	2,457,373

Loans associated with MSRs ⁽¹⁾	$	252,297,973
MSR values as percent of loans ⁽²⁾		0.97	%

(1)

Amounts represent the principal balance of loans associated with MSRs outstanding at June 30, 2015

(2)

Amounts represent the carrying value of MSRs at June 30, 2015 divided by the outstanding balance of the loans associated with these MSRs

The following table presents the components of servicing income recorded on the Company’s condensed consolidated statement of operations for the three months ended June 30, 2015:

	Three Months Ended June 30, 2015
Servicing income, net	$	65,770
Income from MSRs, net	$	65,770