Commitments and Contingencies

12 Months Ended

Dec. 31, 2011

Commitments and Contingencies

Commitments and Contingencies

9.      Commitments and Contingencies

(a)  Lease Commitments

The Company pays monthly rent pursuant to two operating leases. The Company’s lease for its corporate headquarters in New York, New York was amended in December 2010 such that the lease term extends through May 31, 2020. The amended lease provides for aggregate cash payments ranging over time from approximately $2.4 million to $2.5 million per year, paid on a monthly basis, exclusive of escalation charges. In addition, as part of this lease agreement, the Company has provided the landlord a $785,000 irrevocable standby letter of credit fully collateralized by cash. The letter of credit may be drawn upon by the landlord in the event that the Company defaults under certain terms of the lease. In addition, the Company has a lease through December 31, 2016 for its off-site back-up facility located in Rockville Centre, New York, which provides for, among other things, cash payments ranging over time from $27,000 to $30,000 per year, paid on a monthly basis.

The Company recognized lease expense of $1.7 million, $1.2 million and $1.3 million for the years ended December 31, 2011, 2010 and 2009, respectively, which is included in general and administrative expense within the consolidated statement of operations. At December 31, 2011, the contractual minimum rental payments (exclusive of possible rent escalation charges and normal recurring charges for maintenance, insurance and taxes) were as follows:

Year Ended December 31,	Minimum Rental Payments
(Dollars In Thousands)
2012	$		2,380
2013	2,381
2014	2,382
2015	2,397
2016	2,552
Beyond 2016	8,616
Total	$	20,708

(b)  Representations and Warranties in Connection with Resecuritization Transactions

In connection with the resecuritization transactions engaged in by the Company (See Note 14 for further discussion), the Company has the obligation under certain circumstances to repurchase assets from its VIEs upon breach of certain representations and warranties.

(c)  MBS Purchase Commitments

At December 31, 2011, the Company had commitments to purchase one Non-Agency MBS at an estimated purchase price of $27.1 million. This commitment is included in the Non-Agency MBS balances presented at fair value on the Company’s consolidated balance sheet. In addition, at December 31, 2011, the Company had committed to enter into a repurchase agreement for $12.0 million on the settlement date of such MBS purchase, which will be accounted for on an ongoing basis as a Linked Transaction.