Investments in Loans

6 Months Ended

Jun. 30, 2012

Investments in Loans [Abstract]

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, 2012:

	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	$	720,250		$	(27,844	)	$	692,406			49		6.3	%	Aug. 2012 to Jul. 2022
Mezzanine loans		285,664			(5,013	)		280,651			87		9.5	%	Aug. 2012 to Nov. 2038
Preferred equity interests		66,741			(1,072	)		65,669			23		9.6	%	Mar. 2014 to Aug. 2025
Total CRE Loans		1,072,655			(33,929	)		1,038,726			159		7.3	%
Other loans		53,600			84			53,684			3		4.5	%	Aug. 2012 to Oct. 2016
Total Loans	$	1,126,255		$	(33,845	)	$	1,092,410			162		7.2	%
Deferred fees		(1,929	)		0			(1,929	)
Total investments in loans	$	1,124,326		$	(33,845	)	$	1,090,481

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

During the six-month period ended June 30, 2012, we completed the conversion of two commercial real estate loans with a carrying value of $24,871 to real estate owned property and we recorded a gain on asset of $2,529 as the value of the real estate exceeded the carrying amount of the converted loans. During the six-month period ended June 30, 2011, we completed the conversion of three commercial real estate loans with a carrying value of $85,388 to real estate owned property and we charged off $7,088 to the allowance for losses as the carrying amount exceeded the fair value of the real estate properties. See Note 5.

The following table summarizes the delinquency statistics of our commercial real estate loans as of June 30, 2012 and December 31, 2011:

Delinquency Status	As of June 30, 2012		As of December 31, 2011
30 to 59 days	$	2,500	$	3,500
60 to 89 days		3,850		0
90 days or more		41,830		16,857
In foreclosure or bankruptcy proceedings		12,225		10,320
Total	$	60,405	$	30,677

As of June 30, 2012 and December 31, 2011, approximately $73,592 and $54,334, respectively, of our commercial real estate loans were on non-accrual status and had a weighted-average interest rate of 8.1% and 9.8%. As of June 30, 2012 and December 31, 2011, one Other loan with a carrying amount of approximately $18,462 and $19,501, respectively, was 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, 2012 and 2011:

	For the Three-Month Period Ended June 30, 2012			For the Three-Month Period Ended June 30, 2011
Beginning balance	$	39,715		$	66,769
Provision		500			950
Charge-offs, net of recoveries		(338	)		(9,853	)
Ending balance	$	39,877		$	57,866

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, 2012 and 2011:

	For the Six-Month Period Ended June 30, 2012			For the Six-Month Period Ended June 30, 2011
Beginning balance	$	46,082		$	69,691
Provision		1,000			2,900
Charge-offs, net of recoveries		(7,205	)		(14,725	)
Ending balance	$	39,877		$	57,866

As of June 30, 2012 and December 31, 2011, we identified 15 and 19 commercial mortgages, mezzanine loans and other loans with unpaid principal balances of $70,044 and $87,977 as impaired.

The average unpaid principal balance of total impaired loans was $75,728 and $130,062 during the three-month periods ended June 30, 2012 and 2011 and $79,811 and $139,290 during the six-month periods ended June 30, 2012 and 2011. We recorded interest income from impaired loans of $0 and $18 for the three-month periods ended June 30, 2012 and 2011. We recorded interest income from impaired loans of $62 and $524 for the six-month periods ended June 30, 2012 and 2011.

We have evaluated modifications to our commercial real estate loans to determine if the modification constitutes a troubled debt restructuring, or TDR, under FASB ASC Topic 310, “Receivables”. During the six-month period ended June 30, 2012, we have determined that there were no modifications to any commercial real estate loans that constituted a TDR. As of June 30, 2012, there were no TDRs that subsequently defaulted.