MORTGAGE LOANS RECEIVABLE

9 Months Ended

Sep. 30, 2023

Genesis specializes in originating and managing a portfolio of primarily short-term mortgage loans to fund the construction and development of, or investment in, residential properties.

On August 24, 2023 Rithm Capital acquired a portfolio of loans from Morgan Stanley Bank, N.A. with a face value of $148.4 million. The portfolio consists of fixed rate bridge and renovation loans and is master serviced by Genesis.

The following table summarizes mortgage loans receivable outstanding by loan purpose as of September 30, 2023:


	Carrying Value(A)		% of Portfolio		Loan Count	% of Portfolio		Weighted Average Yield		Weighted Average Original Life (Months)	Weighted Average Committed Loan Balance to Value(B)
Construction	$	947,754	44.3	%	422	30.0	%	9.8	%	16.1	75.0% / 63.3%
Bridge	925,859		43.4	%	682	48.6	%	9.3	%	25.1	69.9%
Renovation	261,811		12.3	%	300	21.4	%	9.9	%	14.0	79.4% / 68.2%
	$	2,135,424	100.0	%	1,404	100.0	%	9.6	%	19.7	N/A

(A)Mortgage loans receivable are carried at fair value. See Note 19 regarding fair value measurements.

(B)Weighted by commitment loan-to-value (“LTV”) for bridge loans, loan-to-cost (“LTC”) and loan-to-after-repair-value (“LTARV”) for construction and renovation loans.

The following table summarizes the activity for mortgage loans receivable:


Balance at December 31, 2022	$	2,064,028
Purchases	146,631
Initial loan advances	975,677
Construction holdbacks and draws	491,370
Paydowns and payoffs	(1,542,459)
Purchased loans discount amortization	177



Balance at September 30, 2023	$	2,135,424

The Company is subject to credit risk in connection with its investments in mortgage loans. The two primary components of credit risk are default risk, which is the risk that a borrower fails to make scheduled principal and interest payments, and severity risk, which is the risk of loss upon a borrower default on a mortgage loan or other secured or unsecured loan. Severity risk includes the risk of loss of value of the property or other asset, if any, securing the loan, as well as the risk of loss associated with taking over the property or other asset, if any, including foreclosure costs.

The following table summarizes the past due status and difference between the aggregate unpaid principal balance and the aggregate carrying value of mortgage loans receivable:


	September 30, 2023						December 31, 2022
Days Past Due	UPB		Carrying Value		Carrying Value Over (Under) UPB		UPB		Carrying Value		Carrying Value Over (Under) UPB
Current	$	2,105,989	$	2,104,383	$	(1,606)	$	2,064,028	$	2,064,028	$	—
90+	31,045		31,041		(4)		—		—		—

The following table summarizes the geographic distribution of the underlying mortgage loans receivable as of September 30, 2023:


State Concentration	Percentage of Total Loan Commitment
California	49.2	%
Washington	8.7	%
New York	7.0	%
Colorado	5.6	%
Florida	5.2	%
Arizona	4.2	%
Virginia	3.8	%
North Carolina	2.5	%
Illinois	2.4	%
Texas	2.3	%
Other U.S.	9.1	%
	100.0	%

See Note 18 regarding the financing of mortgage loans receivable.