REPURCHASE AGREEMENTS

The Company uses repurchase agreements, which are recourse to the Company, to finance certain of its investments. The following tables present the components of the Company’s repurchase agreements as of September 30, 2011 and December 31, 2010 by the type of securities collateralizing the repurchase agreement:



	September 30, 2011
Collateral Type	Balance		Weighted Average Rate		Fair Value of Collateral Pledged
Agency RMBS	$	1,542,593	0.28	%	$	1,606,539
Agency CMBS	225,856		0.43	%	241,713
Non-Agency RMBS	7,048		1.32	%	8,205
Non-Agency CMBS	235,804		1.22	%	278,046
Securitization financing bonds (see Note 9)	42,385		1.16	%	48,988
	$	2,053,686	0.43	%	$	2,183,491



	December 31, 2010
Collateral Type	Balance		Weighted Average Rate		Fair Value of Collateral Pledged
Agency RMBS	$	869,537	0.33	%	$	908,375
Agency CMBS	150,178		0.31	%	161,143
Non-Agency RMBS	12,126		1.29	%	13,628
Non-Agency CMBS	135,143		1.31	%	164,871
Securitization financing bonds (see Note 9)	67,199		1.36	%	79,080
	$	1,234,183	0.50	%	$	1,327,097

The combined weighted average term to original maturity for the Company’s repurchase agreements was 45 days as of September 30, 2011 and 50 days as of December 31, 2010. The following table provides a summary of the original maturity as of September 30, 2011 and December 31, 2010:



Original Maturity	September 30, 2011		December 31, 2010
30 days or less	$	1,177,698	$	478,848
31 to 60 days	347,951		372,702
61 to 90 days	81,226		202,569
Greater than 90 days	446,811		180,064
	$	2,053,686	$	1,234,183

The Company's maximum amount of equity at risk (equal to the fair value of the collateral pledged in excess of the amount due) was $42,525 with Bank of America with whom the Company had repurchase agreements of $281,671 outstanding as of September 30, 2011. The maximum amount of equity at risk with all other counterparties did not exceed 10% of the Company's shareholders' equity as of September 30, 2011.

Our repurchase agreement counterparties require us to comply with various customary operating and financial covenants, including, but not limited to, minimum net worth, minimum liquidity, and leverage requirements as well as maintaining our REIT status. In addition, some of the covenants contain cross default features, whereby default under one agreement simultaneously causes default under another agreement. To the extent that we fail to comply with the covenants contained in our financing agreements or are otherwise found to be in default under the terms of such agreements, we could be restricted from paying dividends or from engaging in other transactions that are necessary for us to maintain our REIT status. As of September 30, 2011, one of the Company's repurchase agreement counterparties required that the Company's total liabilities not exceed six times its shareholders' equity. Due to the Company's accrual of its litigation settlement costs (see Note 12), the Company failed to comply with this covenant as of September 30, 2011. The Company and the counterparty have entered into an amendment to increase the limit to seven times its shareholders' equity. No obligations were accelerated in connection with this covenant violation, and no cross-default provisions under other agreements were triggered as a result of the breach of this covenant. The Company was in compliance with all remaining covenants as of September 30, 2011. Please refer to "Liquidity and Capital Resources" within Item 2 of this Quarterly Report on Form 10-Q for additional information related to these covenants.