THE FREMF TRUSTS

3 Months Ended

Mar. 31, 2016

Variable Interest Entity Disclosure [Text Block]

NOTE 6 – THE FREMF TRUSTS

The Company has elected the fair value option on the assets and liabilities of the FREMF 2011-K13 Trust and the FREMF 2012-KF01 Trust, which requires that changes in valuations of the trusts be reflected in the Company’s statements of operations. The Company’s net investment in the trusts is limited to the Multi-Family MBS comprised of first loss PO securities and IO securities acquired by the Company in 2014 with an aggregate net carrying value of $87,566,866 at March 31, 2016.

The condensed consolidated balance sheet of the FREMF trusts at March 31, 2016 and December 31, 2015 is set out below:

Balance Sheets	March 31, 2016		December 31, 2015
Assets
Multi-family mortgage loans held in securitization trusts	$	1,433,612,858	$	1,449,774,383
Receivables		5,251,586		5,380,956

Total assets	$	1,438,864,444	$	1,455,155,339

Liabilities and Equity
Multi-family securitized debt obligations	$	1,346,254,828	$	1,364,077,012
Payables		5,042,750		5,047,777
	$	1,351,297,578	$	1,369,124,789
Equity		87,566,866		86,030,550

Total liabilities and equity	$	1,438,864,444	$	1,455,155,339

The multi-family mortgage loans held in securitization trusts had an unpaid principal balance of $1,329,450,325 at March 31, 2016 and $1,371,258,074 at December 31, 2015. The multi-family securitized debt obligations had an unpaid principal balance of $1,329,450,325 at March 31, 2016 and $1,371,258,074 at December 31, 2015.

The condensed consolidated statements of operations of the FREMF trusts at March 31, 2016 and March 31, 2015 are as follows:

Statements of Operation	Three Months Ended March 31, 2016		Three Months Ended March 31, 2015
Interest income	$	15,437,804	$	17,635,476
Interest expense		14,112,709		16,135,460
Net interest income	$	1,325,095	$	1,500,016
General and administrative fees		(703,483)		(868,347)
Unrealized gain (loss) on multi-family loans held in securitization trusts		1,536,317		2,037,111
Net Income	$	2,157,929	$	2,668,780

The geographic concentrations of credit risk exceeding 5% of the total loan balances related to the FREMF trusts as of March 31, 2016:

	March 31, 2016
Texas		19.8	%
New York		13.6	%
California		12.5	%
Washington		7.3	%
Colorado		6.6	%