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RESIDENTIAL MORTGAGE LOAN SECURITIZATION TRUSTS
 12 Months Ended
Dec. 31, 2016
Residential Mortgage [Member]  
Balance Sheet  
Variable Interest Entity Disclosure [Text Block]
NOTE 7 – RESIDENTIAL MORTGAGE LOAN SECURITIZATION TRUSTS
 
The Company has elected the fair value option on the assets and liabilities of the CSMC 2014-OAK1 Trust, which requires that changes in valuations of the trust be reflected in the Company’s statements of operations. The Company’s net investment in the trust is limited to the Non-Agency RMBS comprised of subordinated and first loss securities, IO securities and excess servicing rights acquired by the Company in 2014 with an aggregate net carrying value of $6,374,821 at December 31, 2016 and $31,535,741 at December 31, 2015. The Company previously consolidated the assets and liabilities of the JPMMT 2014-OAK4 Trust, but based on the sale of subordinated and first loss securities during the second quarter of 2016, has determined that it is no longer the primary beneficiary of the trust, and accordingly no longer consolidates the assets and liabilities of this trust.
 
The consolidated balance sheets of the residential mortgage loan securitization trusts at December 31, 2016 and December 31, 2015 are set out below:
 
Balance Sheets
 
December 31, 2016
 
 
December 31, 2015
 
Assets
 
 
 
 
 
 
 
 
Residential mortgage loans held in securitization trusts
 
$
141,126,720
 
 
$
411,881,097
 
Receivables
 
 
471,146
 
 
 
1,446,120
 
 
 
 
 
 
 
 
 
 
Total assets
 
$
141,597,866
 
 
$
413,327,217
 
 
 
 
 
 
 
 
 
 
Liabilities and Equity
 
 
 
 
 
 
 
 
Residential securitized debt obligations
 
$
134,846,348
 
 
$
380,638,423
 
Payables
 
 
376,697
 
 
 
1,153,053
 
 
 
$
135,223,045
 
 
$
381,791,476
 
Equity
 
 
6,374,821
 
 
 
31,535,741
 
 
 
 
 
 
 
 
 
 
Total liabilities and equity
 
$
141,597,866
 
 
$
413,327,217
 
 
The residential mortgage loans held in securitization trusts had an unpaid principal balance of $140,690,705 at December 31, 2016 and $411,650,561 at December 31, 2015. The residential mortgage loan securitized debt obligations had an unpaid principal balance of $140,690,705 at December 31, 2016 and $411,650,561 at December 31, 2015. As of March 31, 2016, the most recent quarterly reporting date prior to deconsolidation of the JPMMT 2014-OAK4 Trust, the residential mortgage loans held in the trust and the residential securitized debt obligations issued by the trust both had an unpaid principal balance of $202,911,543.
 
The consolidated statements of operations of the residential mortgage loan securitization trusts for the years ended December 31, 2016 and December 31, 2015 and for the period from date of consolidation to December 31, 2014 are set out below:
 
Statements of Operations
 
December 31, 2016
 
 
December 31, 2015
 
 
For the period from

date of consolidation to

December 31, 2014*
 
Interest income
 
$
10,585,191
 
 
$
19,986,204
 
 
$
4,438,633
 
Interest expense
 
 
(8,117,402
)
 
 
(13,156,912
)
 
 
(3,575,168
)
Net interest income
 
$
2,467,789
 
 
$
6,829,292
 
 
$
863,465
 
General and administrative fees
 
 
(266,957
)
 
 
(635,547
)
 
 
(44,267
)
Unrealized gain (loss) on residential mortgage loans held in securitization trusts
 
 
404,720
 
 
 
(8,153,474
)
 
 
3,059,647
 
Net income (loss)
 
$
2,605,552
 
 
$
(1,959,729
)
 
$
3,878,845
 
 
* The Company consolidated the first trust in October, 2014, and the second trust in December, 2014.
 
The geographic concentrations of credit risk exceeding 5% of the total loan balances related to the residential mortgage loan securitization trusts as at December 31, 2016 are as follows:
 
 
 
December 31, 2016
 
 
December 31, 2015
 
California
 
 
37.6
%
 
 
45.5
%
Washington
 
 
15.4
%
 
 
13.3
%
Massachusetts
 
 
8.4
%
 
 
6.4
%
Florida
 
 
5.7
%
 
 
-
 
Tennessee
 
 
4.8
%
 
 
-