Commercial Mortgage and Other Loans Receivable

12 Months Ended

Jun. 30, 2019

Commercial Mortgage and Other Loans Receivable

Commercial Mortgage and Other Loans Receivable

5.Commercial Mortgage and Other Loans Receivable

We had $6,864,000 of commercial loan assets as of June 30, 2019, of which $4,114,000 are mortgage loans secured by real property in certain markets throughout the United States.  Mortgage loan activity for the fiscal year ended June 30, 2019 is as follows:

					Provision
Mortgage Loans	Principal		Deferred		for Loan		Carrying
	Balance		Fees		Loss		Value
	(Amounts in thousands)
Balance at July 1, 2018	$	3,005	$	—	$	—	$	3,005
Additions during the period:
New mortgage loans		4,110		(81)		—		4,029
Deductions during the period:
Collections of principal		(2,920)		—		—		(2,920)
Balance at June 30, 2019	$	4,195	$	(81)	$	—	$	4,114

On July 1, 2019, a commercial mortgage loan in the amount of $1,400,000 defaulted. We do not believe the value of this loan is impaired, as the appraised value of the underlying property exceeds the outstanding balance of the mortgage. We are currently pursuing foreclosure and sale of this property to settle the outstanding debt.

Commercial loan/credit facility activity for the period is as follows (amounts in thousands):

	Principal Balance and
	Carrying Value
Balance at July 1, 2018	$	—
Additions during the period:
Borrowings		5,623
Deductions during the period:
Collections of principal		(2,873)
Balance at June 30, 2019	$	2,750

During the second quarter of our fiscal year 2019, we originated a commercial line of credit (the “credit facility”) to support the working capital needs of a business (the “borrower”) with eligible borrowings of up to $3,000,000, based upon the borrower’s eligible accounts receivable.  All outstanding credit facility balances are due upon collection of the borrower’s accounts receivable and the credit facility expires on October 29, 2020.  The credit facility yields prime plus 5.0% on the outstanding balance of the credit facility, and a 1.2% fee is charged on the unused portion of the credit facility.  As of June 30, 2019, this credit facility had been repaid in full and is no longer available for use.

During our fiscal year 2019 we originated commercial loans in an aggregate principal amount of $2,750,000 to an MCA originator.  These commercial loans have two-year terms and interest is charged at a rate of 17.0% per annum on the outstanding balances.