Note 12 – Notes Payable

In September 2016, Aurora and QRS III entered into a loan and security agreement (the “MSR Financing Facility”), pursuant to which Aurora and QRS III pledged their respective rights in all existing and future MSRs for loans owned or securitized by Fannie Mae to secure borrowings up to a maximum of $25.0 million outstanding at any one time, subsequently amended to $100 million with the revolving period extended to December 20, 2020. During the revolving period, borrowings bear interest at a rate equal to a spread over one-month LIBOR subject to a floor. At the end of the revolving period, the outstanding amount will be converted to a three-year term loan that will bear interest at a rate calculated at a spread over the rate for one-year interest rate swaps. The revolving period may be further extended by agreement. The Company has previously guaranteed repayment of all indebtedness under the MSR Financing Facility. There was no outstanding balance under the MSR Financing Facility at September 30, 2019. Approximately $96.5 million was outstanding under the MSR Financing Facility at December 31, 2018. The MSR Financing Facility and the related acknowledgement agreement with Fannie Mae were terminated as of September 30, 2019.

In May 2017, the Company, Aurora and QRS IV obtained a $20.0 million loan (the “MSR Term Facility”) secured by the pledge of Aurora’s Ginnie Mae MSRs and the Company’s ownership interest in QRS IV. The loan bears interest at a fixed rate of 6.18% per annum, amortizes on a ten-year amortization schedule and is due on May 18, 2022.

In July 2018, the Company, Aurora and QRS V (collectively with Aurora and the Company, the “Borrowers”) entered into a $25.0 million revolving credit facility (the “MSR Revolver”) pursuant to which Aurora pledged all of its existing and future MSRs on loans owned or securitized by Freddie Mac. The term of the MSR Revolver is 364 days with the Borrowers’ option for two renewals for similar terms followed by a one-year term out feature with a 24-month amortization schedule. The MSR Revolver was upsized to $45 million in September 2018. The Company also has the ability to request up to an additional $5.0 million of borrowings. On April 2, 2019, the Borrowers entered into an amendment that increased the maximum amount of the MSR Revolver to $100.0 million. On June 5, 2019, the term of the MSR Revolver was renewed to July 30, 2020. Amounts borrowed bear interest at an adjustable rate equal to a spread above one-month LIBOR. Approximately $58.5 million and $45.0 million was outstanding under the MSR Revolver at September 30, 2019 and December 31, 2018, respectively.

In September 2019, Aurora and QRS III entered into a loan and security agreement (the “Fannie Mae MSR Financing Facility”), to replace the MSR Financing Facility. Under the Fannie Mae MSR Facility, Aurora and QRS III pledged their respective rights in all existing and future MSRs for loans owned or securitized by Fannie Mae to secure borrowings outstanding from time to time. The maximum credit amount outstanding at any one time under the facility is $200 million of which $100 million is committed. Borrowings bear interest at a rate equal to a spread over one-month LIBOR subject to a floor. The term of the facility is 24 months subject to extension for an additional 12 months if the lender agrees beginning in the 20th month. The Company has guaranteed repayment of all indebtedness under the Fannie Mae MSR Financing Facility. Approximately $84.4 million was outstanding under the Fannie Mae MSR Financing Facility at September 30, 2019. No balance was outstanding under the Fannie Mae MSR Financing Facility at December 31, 2018.

The outstanding long-term borrowings had the following remaining maturities as of the dates indicated (dollars in thousands):

Long-Term Borrowings Repayment Characteristics

As of September 30, 2019

	2019		2020		2021		2022		2023		2024		Total
MSR Term Facility
Borrowings under MSR Term Facility	$	500	$	2,000	$	2,000	$	10,996	$	-	$	-	$	15,496
MSR Revolver
Borrowings under MSR Revolver Facility	$	-	$	-	$	58,500	$	-	$	-	$	-	$	58,500
Fannie Mae MSR Financing Facility
Borrowings under Fannie Mae MSR Financing Facility	$	-	$	-	$	84,390	$	-	$	-	$	-	$	84,390
Total	$	500	$	2,000	$	144,890	$	10,996	$	-	$	-	$	158,386

As of December 31, 2018

	2019		2020		2021		2022		2023		2024		Total
MSR Term Facility
Borrowings under MSR Term Facility	$	2,000	$	2,000	$	2,000	$	10,996	$	-	$	-	$	16,996
MSR Financing Facility
Borrowings under MSR Financing Facility	$	-	$	6,195	$	90,305	$	-	$	-	$	-	$	96,500
MSR Revolver
Borrowings under MSR Revolver Facility	$	-	$	-	$	45,000	$	-	$	-	$	-	$	45,000
Total	$	2,000	$	8,195	$	137,305	$	10,996	$	-	$	-	$	158,496