Investments In Loans

6 Months Ended

Jun. 30, 2011

Investments In Loans

Investments In Loans

NOTE 3: INVESTMENTS IN LOANS

Investments in Commercial Mortgages, Mezzanine Loans, Other Loans and Preferred Equity Interests

The following table summarizes our investments in commercial mortgages, mezzanine loans, other loans and preferred equity interests as of June 30, 2011:

	Unpaid Principal Balance			Unamortized (Discounts) Premiums			Carrying Amount			Number of Loans		Weighted- Average Coupon (1)			Range of Maturity Dates
Commercial Real Estate (CRE) Loans
Commercial mortgages	$	689,624		$	(4,021	)	$	685,603			42		6.7	%	Aug. 2011 to May 2021
Mezzanine loans		358,797			(5,292	)		353,505			99		9.2	%	Aug. 2011 to Nov. 2038
Preferred equity interests		74,477			(1,148	)		73,329			22		10.3	%	Nov. 2011 to Aug. 2025
Total CRE Loans		1,122,898			(10,461	)		1,112,437			163		7.7	%
Other loans		54,842			(707	)		54,135			4		6.4	%	Aug. 2011 to Oct. 2016
Total Loans	$	1,177,740		$	(11,168	)	$	1,166,572			167		7.7	%
Deferred fees		(1,409	)		0			(1,409	)
Total investments in loans	$	1,176,331		$	(11,168	)	$	1,165,163

(1) Weighted-average coupon is calculated on the unpaid principal amount of the underlying instruments, which does not necessarily correspond to the carrying amount.

In July 2011, we negotiated an agreement to sell $60.9 million in principal amount commercial mortgages to a CMBS securitization. We expect the sale to close during the three month period ended September 30, 2011.

During the six-month periods ended June 30, 2011 and 2010, we completed the conversion of three and five commercial real estate loans with a carrying value of $85,388 and $64,048 to real estate owned properties. During the six-month periods ended June 30, 2011 and 2010, we charged off $7,088 and $11,361, respectively, related to the conversion of commercial real estate loans to owned properties. See Note 5.

The following table summarizes the delinquency statistics of our commercial real estate loans as of June 30, 2011 and December 31, 2010:

Delinquency Status	As of June 30, 2011		As of December 31, 2010
30 to 59 days	$	1,230	$	27,978
60 to 89 days		0		0
90 days or more		52,434		55,450
In foreclosure or bankruptcy proceedings		41,084		46,578
Total	$	94,748	$	130,006

As of June 30, 2011 and December 31, 2010, approximately $94,117 and $122,306, respectively, of our commercial real estate loans were on non-accrual status and had a weighted-average interest rate of 9.7% and 8.8%, respectively. As of June 30, 2011 and December 31, 2010, approximately $19,500 and $20,908 of other loans were on non-accrual status and had a weighted-average interest rate of 7.2%.

Allowance For Losses And Impaired Loans

The following table provides a roll-forward of our allowance for losses for our commercial mortgages, mezzanine loans, and other loans for the three-month periods ended June 30, 2011 and 2010:

	For the Three-Month Period Ended June 30, 2011			For the Three-Month Period Ended June 30, 2010
Beginning balance	$	66,769		$	76,823
Provision		950			7,644
Charge-offs, net of recoveries		(9,853	)		(5,795	)
Ending balance	$	57,866		$	78,672

The following table provides a roll-forward of our allowance for losses for our commercial mortgages, mezzanine loans, and other loans for the six-month periods ended June 30, 2011 and 2010:

	For the Six-Month Period Ended June 30, 2011			For the Six-Month Period Ended June 30, 2010
Beginning balance	$	69,691		$	86,609
Provision		2,900			24,994
Charge-offs, net of recoveries		(14,725	)		(32,931	)
Ending balance	$	57,866		$	78,672

As of June 30, 2011 and December 31, 2010, we identified 22 and 27 commercial mortgages, mezzanine loans and other loans with unpaid principal balances of $115,857 and $157,746 as impaired.

The average unpaid principal balance of total impaired loans was $130,062 and $184,925 during the three-month periods ended June 30, 2011 and 2010 and $139,290 and $180,654 during the six-month periods ended June 30, 2011 and 2010. We recorded interest income from impaired loans of $18 and $1,178 for the three-month periods ended June 30, 2011 and 2010 and $524 and $2,492 for the six-month periods ended June 30, 2011 and 2010.