Commitments And Contingencies

6 Months Ended

Jun. 30, 2017

Commitments and Contingencies Disclosure [Abstract]

Contingencies and Commitments

Commitments and Contingencies

The Company provides current directors and officers with a limited indemnification against liabilities arising in connection with the performance of their duties to the Company.

In the normal course of business the Company may also enter into contracts that contain a variety of representations, warranties, and general indemnifications. The Company's maximum exposure under these arrangements, including future claims that may be made against the Company that have not yet occurred, is unknown. The Company has not incurred any costs to defend lawsuits or settle claims related to these indemnification agreements. The Company has no liabilities recorded for these agreements as of June 30, 2017 and December 31, 2016.

Commitments and Contingencies Related to Investments in Mortgage Originators

In connection with certain of its investments in mortgage originators, the Company has outstanding commitments and contingencies as described below.

In connection with its equity interest in a mortgage originator, as described in Note 7, Related Party Transactions, the Company has entered into agreements whereby it guarantees the performance of the mortgage originator under a master repurchase agreement. The Company's maximum aggregate guarantee under the agreement is capped at $125.0 million. As of June 30, 2017 the mortgage originator had borrowings, for which the Company has provided a guarantee under the agreement, in the amount of $47.3 million. The Company's obligation under this arrangement is deemed to be a guarantee under ASC 460-10, Guarantees, and is carried at fair value and included in Other Liabilities on the Consolidated Statement of Assets, Liabilities, and Equity. As of both June 30, 2017 and December 31, 2016 the fair value of such guarantee was zero. As of June 30, 2017, the Company and its co-investor each had a commitment to invest an additional $5.0 million in this mortgage originator.

As described in Note 7, Related Party Transactions, the Company entered into a flow mortgage loan purchase and sale agreement with another mortgage originator whereby the Company has committed to purchase eligible residential mortgage loans, to the extent they are originated in accordance with the Company's specifications, which it may modify in its sole discretion, in an amount of at least $200 million. The Company may opt to increase the amount purchased in its sole discretion based on its evaluation of mortgage loans previously purchased as well as market conditions. As of June 30, 2017, the Company purchased loans under this agreement in the amount of $168.9 million. The Company has also entered into an agreement whereby it guarantees the performance of the mortgage originator under a master repurchase agreement. The Company's maximum guarantee is capped at $15.0 million. As of June 30, 2017 the mortgage originator had no outstanding borrowings under the agreement guaranteed by the Company. The Company's obligation under this arrangement is deemed to be a guarantee under ASC 460-10, Guarantees, and is carried at fair value and included in Other Liabilities on the Consolidated Statement of Assets, Liabilities, and Equity. As of June 30, 2017 the fair value of such guarantee was zero.