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MORTGAGE LOAN RECEIVABLES (Tables)
 9 Months Ended
Sep. 30, 2019
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Abstract]  
Schedule of mortgage loan receivables
 
Outstanding
Face Amount
 
Carrying
Value
 
Weighted
Average
Yield (1)
 
Remaining
Maturity
(years)
 
 
 
 
 
 
 
 
Mortgage loan receivables held for investment, net, at amortized cost:
 
 
 
 
 
 
 
Mortgage loans held by consolidated subsidiaries:
 
 
 
 
 
 
 
First mortgage loans(2)
$
3,192,160

 
$
3,170,788

 
7.70
%
 
1.18
Mezzanine loans
148,221

 
147,602

 
10.89
%
 
4.35
Total mortgage loans held by consolidated subsidiaries
3,340,381

 
3,318,390

 
7.84
%
 
1.32
Provision for loan losses
N/A

 
(17,900
)
 
 
 
 
Total mortgage loan receivables held for investment, net, at amortized cost
3,340,381

 
3,300,490

 
 
 
 
Mortgage loan receivables held for sale:
 
 
 
 
 
 
 
First mortgage loans
181,905

 
182,439

 
5.46
%
 
9.75
Total
$
3,522,286

 
$
3,482,929

 
7.76
%
 
1.77
 
(1)
December 31, 2018 LIBOR rates are used to calculate weighted average yield for floating rate loans.
(2)
Includes amounts relating to consolidated variable interest entities. See Note 10.
 
Outstanding
Face Amount
 
Carrying
Value
 
Weighted
Average
Yield (1)
 
Remaining
Maturity
(years)
 
 
 
 
 
 
 
 
Mortgage loan receivables held for investment, net, at amortized cost:
 
 
 
 
 
 
 
Mortgage loans held by consolidated subsidiaries:
 
 
 
 
 
 
 
First mortgage loans(2)
$
3,116,050

 
$
3,098,241

 
7.14
%
 
1.27
Mezzanine loans
133,661

 
133,202

 
10.87
%
 
3.76
Total mortgage loans held by consolidated subsidiaries
3,249,711

 
3,231,443

 
7.29
%
 
1.37
Provision for loan losses
N/A

 
(18,500
)
 
 
 
 
Total mortgage loan receivables held for investment, net, at amortized cost
3,249,711

 
3,212,943

 
 
 
 
Mortgage loan receivables held for sale:
 
 
 
 
 
 
 
First mortgage loans
173,957

 
174,214

 
4.59
%
 
9.68
Total
$
3,423,668

 
$
3,387,157

 
7.19
%
 
1.81
 
(1)
September 30, 2019 London Interbank Offered Rate (“LIBOR”) rates are used to calculate weighted average yield for floating rate loans.
(2)
Includes amounts relating to consolidated variable interest entities. See Note 10.
Summary of mortgage loan receivables by loan type
For the nine months ended September 30, 2019 and 2018, the activity in our loan portfolio was as follows ($ in thousands):
 
Mortgage loan receivables held for investment, net, at amortized cost:
 
 
 
Mortgage loans held by consolidated subsidiaries
 
Mortgage loans transferred but not considered sold
 
Provision for loan losses
 
Mortgage loan 
receivables held
for sale
 
 
 
 
 
 
 
 
Balance, December 31, 2018
$
3,318,390

 
$
—

 
$
(17,900
)
 
$
182,439

Origination of mortgage loan receivables
985,825

 
—

 
—

 
554,115

Purchases of mortgage loan receivables
—

 
—

 
—

 
9,934

Repayment of mortgage loan receivables
(1,105,506
)
 
—

 
—

 
(620
)
Proceeds from sales of mortgage loan receivables(1)
—

 
(15,504
)
 
—

 
(558,799
)
Non-cash disposition of loans via foreclosure(2)
(17,611
)
 
—

 
—

 
—

Sale of loans, net
—

 
—

 
—

 
38,589

Transfer between held for investment and held for sale(1)
35,940

 
15,504

 
—

 
(51,444
)
Accretion/amortization of discount, premium and other fees
14,405

 
—

 
—

 
—

Provision for loan losses
—

 
—

 
(600
)
 
—

Balance, September 30, 2019
$
3,231,443

 
$
—

 
$
(18,500
)
 
$
174,214

 
(1)
During the three months ended March 31, 2019, the Company reclassified from mortgage loan receivables held for sale to mortgage loan receivables held for investment, net, at amortized cost, one loan with an outstanding face amount of $15.4 million, a book value of $15.5 million (fair value at the date of reclassification) and a remaining maturity of 9.8 years, which was sold to the WFCM 2019-C49 securitization trust. Subsequently, the controlling loan interest was sold to the UBS 2019-C16 securitization trust, and as a result, the loan previously sold during the three months ended March 31, 2019 was accounted for as a sale during the six months ended June 30, 2019.
(2)
Refer to Note 5 Real Estate and Related Lease Intangibles, Net for further detail on foreclosure of real estate.

 
Mortgage loan receivables held for investment, net, at amortized cost:
 
 
 
Mortgage loans held by consolidated subsidiaries
 
Provision for loan losses
 
Mortgage loan
receivables held
for sale
 
 
 
 
 
 
Balance, December 31, 2017
$
3,282,462

 
$
(4,000
)
 
$
230,180

Origination of mortgage loan receivables
1,240,894

 
—

 
1,115,218

Repayment of mortgage loan receivables
(787,167
)
 
—

 
(1,324
)
Proceeds from sales of mortgage loan receivables
—

 
—

 
(926,402
)
Sale of loans, net(1)
—

 
—

 
12,893

Transfer between held for investment and held for sale(2)
55,403

 
—

 
(55,403
)
Accretion/amortization of discount, premium and other fees
13,795

 
—

 
—

Provision for loan losses(3)
—

 
(13,600
)
 
—

Balance, September 30, 2018
$
3,805,387

 
$
(17,600
)
 
$
375,162

 
(1)
Includes $0.5 million of realized losses on loans related to lower of cost or market adjustments for the nine months ended September 30, 2018.
(2)
During the nine months ended September 30, 2018, the Company reclassified from mortgage loan receivables held for sale to mortgage loan receivables held for investment, net, at amortized cost, three loans with a combined outstanding face amount of $57.6 million, a combined book value of $55.4 million (fair value at date of reclassification) and a remaining maturity of 2.5 years. The loans had been recorded at lower of cost or market prior to their reclassification. The discount to fair value is the result of an increase in market interest rates since the loans’ origination and not a deterioration in credit of the borrowers or collateral coverage and the Company expects to collect all amounts due under the loans.
(3)
As further discussed below, during the three and nine months ended September 30, 2018, the Company recorded asset-specific provisions on collateral dependent loans of $10.0 million and $12.7 million, respectively. In addition. the Company records a portfolio-based, general loan loss provision to provide reserves for expected losses over the remaining portfolio of mortgage loan receivables held for investment. During the three and nine months ended September 30, 2018, the Company recorded an additional general reserve of $0.3 million and $0.9 million, respectively.
Schedule of provision for loan losses
Provision for Loan Losses and Non-Accrual Status ($ in thousands)

 
Three Months Ended September 30,
 
Nine Months Ended September 30,
 
2019
 
2018
 
2019
 
2018
 
 
 
 
 
 
 
 
Allowance for loan losses at beginning of period
$
18,500

 
$
7,300

 
$
17,900

 
$
4,000

Provision for loan losses
—

 
10,300

 
600

 
13,600

Allowance for loan losses at end of period
$
18,500

 
$
17,600

 
$
18,500

 
$
17,600

 
 
 
 
 
 
 
 
 
 
 
 
 
September 30, 2019
 
December 31, 2018
 
 
 
 
 
 
 
 
Principal balance of loans on non-accrual status(1)
 
 
 
 
$
37,161

 
$
36,850


 
(1)
Represents two of the Company’s loans, which were originated simultaneously as part of a single transaction and had a carrying value of $26.9 million and one loan with a carrying value of $45.0 million, as further discussed below.