NOTE 12 - MSRs

During the year ended December 31, 2015, the Company retained the servicing rights associated with an aggregate principal balance of $729,443,811 of residential mortgage loans that the Company had previously transferred to four residential mortgage loan securitization trusts. The Company’s MSRs are held and managed at the Company’s TRS, and the Company employs one or more licensed sub-servicers to perform the related servicing activities. To the extent that the Company determines it is the primary beneficiary of a residential mortgage loan securitization trust into which it has sold loans, any associated MSRs are eliminated on the consolidation of the trust. The trust is contractually obligated to pay a portion of the interest payments from the associated residential mortgage loans for the direct servicing of the loans, and after deduction of sub-servicing fees payable to contracted sub-servicers, the net amount, excess servicing rights, represents a liability of the trust. Upon consolidation of the trust, the fair value of the excess servicing rights is equal to the related MSRs held at our TRS. As the result of the Company’s determination that it is not the primary beneficiary of OAKS Mortgage Trust 2015-1 and OAKS Mortgage Trust 2015-2, it does not consolidate these trusts, and as a consequence, MSRs associated with this trust are recorded on the Company’s consolidated balance sheet at December 31, 2015.

The following table presents the Company’s MSR activity as of December 31, 2015 and December 31, 2014.

	December 31, 2015			December 31, 2014
Balance at beginning of year	$	-		$	-
MSRs retained from sales to securitizations		4,940,630			-
Changes in fair value due to:
Changes in valuation inputs or assumptions used in valuation model		(217,663)
Other changes in fair value ⁽¹⁾		(454,294)
Balance at end of year	$	4,268,673		$	-

Loans associated with MSRs ⁽²⁾	$	472,886,810		$	-
MSR values as percent of loans ⁽³⁾		0.90	%		-

	(1)	Amounts represent changes due to realization of expected cash flows
	(2)	Amounts represent the principal balance of loans associated with MSRs outstanding at December 31, 2015

(3)

Amounts represent the carrying value of MSRs at December 31, 2015 divided by the outstanding balance of the loans associated with these MSRs

The following table presents the components of servicing income recorded on the Company’s consolidated statements of operations for the years ended December 31, 2015, December 31, 2014 and December 31, 2013:

	Year Ended		Year Ended		Year Ended
	December 31, 2015		December 31, 2014		December 31, 2013
Servicing income, net	$	211,878	$	-	$	-
Income from MSRs, net	$	211,878	$	-	$	-