Fair Value Measurements

6 Months Ended

Sep. 30, 2011

Fair Value Measurements [Abstract]

Fair Value Measurements

19. Fair Value Measurements

The book value and estimated fair value of the Company’s financial instruments are as follows (in thousands):

	September 30, 2011				March 31, 2011
	Book		Estimated		Book		Estimated
	Value		Fair Value		Value		Fair Value
Cash and cash equivalents (1)	$	35,219	$	35,219	$	76,513	$	76,513
Restricted cash (1)		7,520		7,520		436		436
Investments (2)		16,442		16,442		—		—
Consumer loans receivable (3)		123,791		123,127		—		—
Inventory finance receivable (4)		19,468		19,468		17,759		17,759
Construction lending line (1)		4,528		4,528		—		—
Securitized financings (5)		96,138		99,671		—		—

(1)	The fair value approximates book value due to the instruments’ short term maturity.
(2)	The fair value is based on market prices.
(3)	Includes consumer loans receivable held for investment, held for sale and construction advances. The fair value of the loans held for investment is based on the discounted value of the remaining principal and interest cash flows. The fair value of the loans held for sale approximates book value since the sales price of these loans is known as of September 30, 2011.
(4)	The fair value approximates book value based on current market rates and the revolving nature of the loan portfolio.
(5)	The fair value is estimated using recent transactions of asset-backed securities.

In accordance with ASC 820, Fair Value Measurements and Disclosures (“ASC 820”), fair value is defined as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. ASC 820 also establishes a fair value hierarchy which requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. The standard describes three levels of inputs that may be used to measure fair value:

Level 1 — Quoted prices in active markets for identical assets or liabilities.

Level 2 — Observable inputs other than Level 1 prices, such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities.

Level 3 — Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities. The Company had no level 3 securities as of September 30, 2011.

The Company utilizes the market approach to measure fair value for its financial assets and liabilities. The market approach uses prices and other relevant information generated by market transactions involving identical or comparable assets or liabilities.

Assets measured at fair value on a recurring basis are summarized below (in thousands):

	As of September 30, 2011
	Total		Level 1		Level 2		Level 3
Securities issued by the U.S Treasury and Government (1)	$	1,296	$	—	$	1,296	$	—
Mortgage-backed securities (1)		4,950		—		4,950		—
Securities issued by states and political subdivisions (1)		1,224		—		1,224		—
Corporate debt securities (1)		4,010		—		4,010		—
Marketable equity securities (1)		4,962		4,962		—		—

⁽¹⁾ Unrealized gains or losses on investments are recorded in accumulated other comprehensive loss at each measurement date.

No significant transfers between Level 1 and Level 2 occurred during the six months ended September 30, 2011. The Company’s policy regarding the recording of transfers between levels is to record any such transfers at the end of the reporting period.

Assets and liabilities measured at fair value on a non-recurring basis are summarized below (in thousands):

	As of September 30, 2011
	Total		Level 1		Level 2		Level 3
Loans held for investment	$	116,536	$	—	$	—	$	116,536
Loans held for sale		4,437		4,437		—		—
Construction advances		2,154		—		—		2,154
Inventory finance receivable		19,468		—		—		19,468
Construction lending facility		4,528		4,528		—		—
Securitized financings		99,671		—		99,671		—

The Company records impairment losses on long-lived assets held for sale when the fair value of such long-lived assets is below their carrying values. The Company records impairment charges on long-lived assets used in operations when events and circumstances indicate that long-lived assets might be impaired and the undiscounted cash flows estimated to be generated by those assets are less than their carrying amounts. The Company recorded no impairment charges on assets held for sale or used in operations during either the three or six months ended September 30, 2011.

Assets measured on a nonrecurring basis also include impaired loans (nonaccrual loans) disclosed in Note 5 and loans held for sale. No recent sales have been executed in an orderly market of manufactured home loan portfolios with comparable product features, credit characteristics, or performance. Impaired loans are measured using Level 3 inputs that are calculated using discounted future cash flows. Loans held for sale are measured at the lower of cost or fair value using Level 1 inputs that consist of commitments on hand from investors. These loans are held for relatively short periods, typically no more than 45 days. As a result, changes in loan-specific credit risk are not a significant component of the change in fair value. The cost of loans held for sale is currently lower than the fair value.

ASC 825, Financial Instruments (“ASC 825”), requires disclosure of fair value information about financial instruments, whether or not recognized in the balance sheet, for which it is practicable to estimate fair value. Fair value estimates are made as of a specific point in time based on the characteristics of the financial instruments and the relevant market information. Where available, quoted market prices are used. In other cases, fair values are based on estimates using other valuation techniques. These techniques involve uncertainties and are significantly affected by the assumptions used and the judgments made regarding risk characteristics of various financial instruments, discount rates, estimates of future cash flows, future expected loss experience, and other factors. Changes in assumptions could significantly affect these estimates and the resulting fair values. Derived fair value estimates cannot be substantiated by comparison to independent markets and, in many cases, could not be realized in an immediate sale of the instrument. Also, because of differences in methodologies and assumptions used to estimate fair values, the Company’s fair values should not be compared to those of other companies.

Under ASC 825, fair value estimates are based on existing financial instruments without attempting to estimate the value of anticipated future business and the value of assets and liabilities that are not considered financial instruments. Accordingly, the aggregate fair value amounts presented do not represent the underlying market value of the Company.