|
[X]
|
QUARTERLY REPORT PURSUANT TO
SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
1934
|
|
[ ]
|
TRANSITION REPORT PURSUANT TO
SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
1934
|
California
|
94-3158788
|
|
(State
or other jurisdiction of incorporation
|
(I.R.S.
Employer
|
|
or
organization)
|
Identification
No.)
|
900
Veterans Blvd., Suite 500, Redwood City, CA
|
94063-1743
|
(Address
of principal executive offices)
|
(Zip
Code)
|
(650)
365-5341
|
NOT
APPLICABLE
|
Yes
|
XX
|
No
|
Yes
|
No
|
Large
accelerated filer
|
[ ]
|
Accelerated
filer
|
[ ]
|
|
Non-accelerated
filer
|
[ ]
|
Smaller
reporting company
|
[X]
|
|
(Do
not check if a smaller reporting company)
|
Yes
|
No
|
XX
|
March
31,
|
December
31,
|
|||||||
2009
|
2008
|
|||||||
Cash
and cash equivalents
|
$
|
7,931
|
$
|
12,495
|
||||
Loans
|
||||||||
Loans,
secured, net of discount of $2,976 for 2009 and 2008
|
359,426
|
363,037
|
||||||
Loans,
unsecured
|
453
|
453
|
||||||
Allowance
for loan losses
|
(13,709
|
)
|
(11,420
|
)
|
||||
Net
loans
|
346,170
|
352,070
|
||||||
Interest
and other receivables
|
||||||||
Accrued
interest and late fees
|
13,690
|
12,174
|
||||||
Receivable
from affiliate
|
305
|
—
|
||||||
Advances
on loans
|
26,593
|
22,345
|
||||||
Total
interest and other receivables
|
40,588
|
34,519
|
||||||
Real
estate owned
|
||||||||
Real
estate held
|
22,188
|
21,500
|
||||||
Real
estate held for sale
|
11,565
|
5,807
|
||||||
Allowance
for real estate losses
|
(1,747
|
)
|
(1,614
|
)
|
||||
Net
real estate
|
32,006
|
25,693
|
||||||
Loan
origination fees, net and other assets
|
72
|
96
|
||||||
Total
assets
|
$
|
426,767
|
$
|
424,873
|
March
31,
|
December
31,
|
|||||||
2009
|
2008
|
|||||||
Liabilities
|
||||||||
Line
of credit
|
$
|
85,000
|
$
|
85,000
|
||||
Mortgage
payable
|
245
|
—
|
||||||
Accounts
payable
|
252
|
199
|
||||||
Deferred
revenue
|
—
|
277
|
||||||
Payable
to affiliate
|
1,143
|
1,195
|
||||||
Total
liabilities
|
86,640
|
86,671
|
||||||
Minority
interest
|
3,860
|
3,689
|
||||||
Partners’
capital
|
||||||||
Limited
partners’ capital, subject to redemption net of
unallocated
|
||||||||
syndication
costs of $1,631 and $1,716 for March 31, 2009 and
|
||||||||
December
31, 2008, respectively; and Formation Loan receivable
|
||||||||
of
$12,233 and $13,207 for March 31, 2009 and December 31,
2008,
|
||||||||
respectively
|
336,035
|
334,265
|
||||||
General
partners’ capital, net of unallocated syndication costs of
$16
|
||||||||
and
$17 for March 31, 2009 and December 31, 2008, respectively
|
232
|
248
|
||||||
Total
partners’ capital
|
336,267
|
334,513
|
||||||
Total
liabilities and partners’ capital
|
$
|
426,767
|
$
|
424,873
|
2009
|
2008
|
|||||||
Revenues
|
||||||||
Interest
on loans
|
$ | 6,600 | $ | 7,794 | ||||
Imputed
interest on Formation Loan
|
293 | 159 | ||||||
Other
interest
|
29 | 27 | ||||||
Late
fees
|
4 | 36 | ||||||
Other
|
3 | 22 | ||||||
Total
revenue
|
6,929 | 8,038 | ||||||
Expenses
|
||||||||
Mortgage
servicing fees
|
415 | 414 | ||||||
Interest
expense
|
584 | 379 | ||||||
Amortization
of loan origination fees
|
30 | 28 | ||||||
Provisions
for losses on loans and real estate
|
2,427 | 1,020 | ||||||
Asset
management fees
|
334 | 309 | ||||||
Clerical
costs through Redwood Mortgage Corp.
|
112 | 84 | ||||||
Professional
services
|
44 | 82 | ||||||
Amortization
of discount on imputed interest
|
293 | 159 | ||||||
Other
|
109 | 97 | ||||||
Total
expenses
|
4,348 | 2,572 | ||||||
Net
income
|
$ | 2,581 | $ | 5,466 | ||||
Net
income: general partners ( 1%)
|
$ | 26 | $ | 55 | ||||
limited
partners (99%)
|
2,555 | 5,411 | ||||||
$ | 2,581 | $ | 5,466 | |||||
Net
income per $1,000 invested by limited
|
||||||||
partners
for entire period
|
||||||||
-where
income is compounded and retained
|
$ | 8 | $ | 16 | ||||
-where
partner receives income in monthly distributions
|
$ | 8 | $ | 16 |
2009
|
2008
|
|||||||
Cash
flows from operating activities
|
||||||||
Net
income
|
$
|
2,581
|
$
|
5,466
|
||||
Adjustments
to reconcile net income to net cash
|
||||||||
provided
by operating activities
|
||||||||
Amortization
of loan origination fees
|
30
|
28
|
||||||
Imputed
interest income
|
(293
|
)
|
(159
|
)
|
||||
Amortization
of discount
|
293
|
159
|
||||||
Provision
for loan and real estate losses
|
2,427
|
1,020
|
||||||
Change
in operating assets and liabilities
|
||||||||
Accrued
interest and late fees
|
(2,181
|
)
|
(900
|
)
|
||||
Advances
on loans
|
(4,290
|
)
|
—
|
|||||
Receivable
from affiliate
|
(305
|
)
|
414
|
|||||
Loan
origination fees
|
(6
|
)
|
11
|
|||||
Accounts
payable
|
53
|
20
|
||||||
Deferred
revenue
|
—
|
(213
|
)
|
|||||
Payable
to affiliate
|
(52
|
)
|
70
|
|||||
Net
cash provided by/(used in) operating activities
|
(1,743
|
)
|
5,916
|
|||||
Cash
flows from investing activities
|
||||||||
Loans
originated
|
(2,564
|
)
|
(73,991
|
)
|
||||
Principal
collected on loans
|
1,103
|
24,829
|
||||||
Payments
for development of real estate
|
(704
|
)
|
(445
|
)
|
||||
Net
cash used in investing activities
|
(2,165
|
)
|
(49,607
|
)
|
||||
Cash
flows from financing activities
|
||||||||
Borrowings
(payments) on line of credit, net
|
—
|
45,550
|
||||||
Contributions
by partner applicants
|
—
|
6,377
|
||||||
Partners’
withdrawals
|
(1,800
|
)
|
(3,659
|
)
|
||||
Syndication
costs paid
|
(1
|
)
|
(110
|
)
|
||||
Formation
loan lending
|
—
|
(462
|
)
|
|||||
Formation
loan collections
|
974
|
439
|
||||||
Increase
in minority interest
|
171
|
116
|
||||||
Net
cash provided by/(used in) financing activities
|
(656
|
)
|
48,251
|
|||||
Net
increase/(decrease) in cash and cash equivalents
|
(4,564
|
)
|
4,560
|
|||||
Cash
and cash equivalents – beginning of period
|
12,495
|
11,591
|
||||||
Cash
and cash equivalents – end of period
|
7,931
|
16,151
|
||||||
Supplemental
disclosures of cash flow information
|
||||||||
Cash
paid for interest
|
$
|
584
|
$
|
379
|
1st
|
2nd
|
3rd
|
4th
|
5th
|
6th
|
Total
|
||||||||||||||||||||||
Limited
partner
|
||||||||||||||||||||||||||||
contributions
|
$ | 14,932 | $ | 29,993 | $ | 29,999 | $ | 49,985 | $ | 74,904 | $ | 100,000 | $ | 299,813 | ||||||||||||||
Formation
Loan made
|
1,075 | 2,272 | 2,218 | 3,777 | 5,661 | 7,564 | 22,567 | |||||||||||||||||||||
Discount
on imputed
|
||||||||||||||||||||||||||||
interest
|
— | (19 | ) | (64 | ) | (166 | ) | (633 | ) | (1,818 | ) | (2,700 | ) | |||||||||||||||
Formation
Loan made,
|
||||||||||||||||||||||||||||
net
|
1,075 | 2,253 | 2,154 | 3,611 | 5,028 | 5,746 | 19,867 | |||||||||||||||||||||
Repayments
to date
|
(991 | ) | (1,858 | ) | (1,390 | ) | (2,038 | ) | (2,104 | ) | (1,328 | ) | (9,709 | ) | ||||||||||||||
Early
withdrawal
|
||||||||||||||||||||||||||||
penalties
applied
|
(84 | ) | (171 | ) | (135 | ) | (98 | ) | (137 | ) | — | (625 | ) | |||||||||||||||
Formation
Loan, net
|
||||||||||||||||||||||||||||
at
March 31, 2009
|
— | 224 | 629 | 1,475 | 2,787 | 4,418 | 9,533 | |||||||||||||||||||||
Unamortized
discount
|
||||||||||||||||||||||||||||
on
imputed interest
|
— | 19 | 64 | 166 | 633 | 1,818 | 2,700 | |||||||||||||||||||||
Balance
|
||||||||||||||||||||||||||||
March
31, 2009
|
$ | — | $ | 243 | $ | 693 | $ | 1,641 | $ | 3,420 | $ | 6,236 | $ | 12,233 | ||||||||||||||
Percent
loaned
|
7.2 | % | 7.6 | % | 7.4 | % | 7.6 | % | 7.6 | % | 7.6 | % | 7.5 | % |
Costs
incurred
|
$
|
5,010
|
||
Early
withdrawal penalties applied
|
(186
|
)
|
||
Allocated
to date
|
(3,177
|
)
|
||
March
31, 2009 balance
|
$
|
1,647
|
As
of March 31,
|
For
the three months ended March 31,
|
|||||||||||||||||||||||||||
Number
|
Total
|
Total
|
Impaired
|
Average
|
Interest
|
|||||||||||||||||||||||
of
|
Impaired
|
Investment
|
Loans’
|
Investment
|
Interest
|
Income
|
||||||||||||||||||||||
Impaired
|
Loan
|
Impaired
|
Loss
|
Impaired
|
Income
|
Received
|
||||||||||||||||||||||
Loans
|
Balance
|
Loans
|
Reserve
|
Loans
|
Accrued
|
In
Cash
|
||||||||||||||||||||||
2009
|
18 | $ | 48,069 | $ | 67,672 | $ | 10,766 | $ | 66,538 | $ | 175 | $ | 59 | |||||||||||||||
2008
|
— | $ | — | $ | — | $ | — | $ | — | $ | — | $ | — |
March
31, 2009
|
December
31, 2008
|
|||||||||||
Percent
|
Percent
|
|||||||||||
of
loans
|
of
loans
|
|||||||||||
in
each
|
in
each
|
|||||||||||
category
|
category
|
|||||||||||
to
total
|
to
total
|
|||||||||||
Amount
|
loans
|
Amount
|
loans
|
|||||||||
Real
estate mortgage
|
||||||||||||
Single-family
|
$
|
12,561
|
73
|
%
|
$
|
10,116
|
73
|
%
|
||||
Apartments
|
100
|
3
|
%
|
125
|
3
|
%
|
||||||
Commercial
|
872
|
23
|
%
|
1,016
|
23
|
%
|
||||||
Land
|
63
|
1
|
%
|
50
|
1
|
%
|
||||||
Total
real estate-mortgage
|
13,596
|
100.00
|
%
|
11,307
|
100.00
|
%
|
||||||
Total
unsecured loans
|
113
|
100.00
|
%
|
113
|
100.00
|
%
|
||||||
Total
|
$
|
13,709
|
100.00
|
%
|
$
|
11,420
|
100.00
|
%
|
Three
months ended
|
||||||||
March
31,
|
||||||||
2009
|
2008
|
|||||||
Balance
at beginning of period
|
$
|
11,420
|
$
|
4,469
|
||||
Charge-offs
|
||||||||
Real
estate - mortgage
|
||||||||
Single
family
|
(5
|
)
|
(27
|
)
|
||||
Apartments
|
—
|
—
|
||||||
Commercial
|
—
|
—
|
||||||
Land
|
—
|
—
|
||||||
Total
gross charge-offs
|
(5
|
)
|
(27
|
)
|
||||
Recoveries
|
||||||||
Real
estate - mortgage
|
||||||||
Single
family
|
—
|
—
|
||||||
Apartments
|
—
|
—
|
||||||
Commercial
|
—
|
—
|
||||||
Land
|
—
|
—
|
||||||
Total
recoveries
|
—
|
—
|
||||||
Net
charge-offs
|
(5
|
)
|
(27
|
)
|
||||
Additions
charged to operations
|
2,294
|
1,018
|
||||||
Transfer
from (to) real estate owned reserve
|
—
|
(25
|
)
|
|||||
Balance
at end of period
|
$
|
13,709
|
$
|
5,435
|
||||
Ratio
of net charge-offs during the period to average
|
||||||||
secured
loans outstanding during the period
|
0.00
|
%
|
0.01
|
%
|
March
31,
|
March
31,
|
||||||||
2009
|
2008
|
||||||||
Maximum
chargeable
|
$
|
1,072
|
$
|
1,146
|
|||||
Waived
|
(657
|
)
|
(732
|
)
|
|||||
Net
charged
|
$
|
415
|
$
|
414
|
March
31,
|
March
31,
|
||||||||
2009
|
2008
|
||||||||
Maximum
chargeable
|
$
|
334
|
$
|
309
|
|||||
Waived
|
—
|
—
|
|||||||
Net
charged
|
$
|
334
|
$
|
309
|
March
31,
|
December
31,
|
|||||||
Real
estate held
|
2009
|
2008
|
||||||
Costs
of properties
|
$
|
22,188
|
$
|
21,500
|
||||
Reduction
in value
|
(920
|
)
|
(920
|
)
|
||||
Real
estate held, net
|
$
|
21,268
|
$
|
20,580
|
March
31,
|
December
31,
|
|||||||
Real
estate held for sale
|
2009
|
2008
|
||||||
Costs
of properties
|
$
|
11,565
|
$
|
5,807
|
||||
Reduction
in value
|
(827
|
)
|
(694
|
)
|
||||
Real
estate held for sale, net
|
$
|
10,738
|
$
|
5,113
|
Fair
Value Measurement at Report Date Using
|
||||||||||||||||
Quoted
Prices
|
Significant
|
|||||||||||||||
in
Active
|
Other
|
Significant
|
||||||||||||||
Markets
for
|
Observable
|
Unobservable
|
Total
|
|||||||||||||
Identical
Assets
|
Inputs
|
Inputs
|
as
of
|
|||||||||||||
Item
|
(Level
1)
|
(Level
2)
|
(Level
3)
|
03/31/2009
|
||||||||||||
Impaired
secured loans
|
$ | — | $ | — | $ | 56,906 | $ | 56,906 | ||||||||
Unsecured
loans
|
$ | — | $ | — | $ | 340 | $ | 340 | ||||||||
Real
estate owned
|
$ | — | $ | — | $ | 10,622 | $ | 10,622 |
(a)
|
Cash
and cash equivalents. The carrying amount equals fair
value. All amounts, including interest bearing accounts, are
subject to immediate withdrawal.
|
(b)
|
Secured
loans (Level 2). The fair value of the non-impaired loans of $315,993,000
and $328,160,000 at March 31, 2009 and December 31, 2008, respectively,
was estimated based upon projected cash flows discounted at the estimated
current interest rates at which similar loans would be made. The
applicable amount of the allowance for loan losses along with accrued
interest and advances related thereto should also be considered in
evaluating the fair value versus the carrying value. For loans in which a
specific allowance is established based on the fair value of the
collateral, the partnership records the loan as nonrecurring Level 2 if
the fair value of the collateral is based on an observable market price or
a current appraised value. If an appraised value is not
available or the fair value of the collateral is considered impaired below
the appraised value and there is no observable market price, the
partnership records the loan as nonrecurring Level
3.
|
(c)
|
Unsecured
loans (Level 3). The carrying amount equals fair
value. Unsecured loans are valued at their principal less any
discount or loss reserves established by management after taking into
account the borrower’s creditworthiness and ability to repay the
loan.
|
(d)
|
Real
estate owned (Level 3). At the time of foreclosure, real
estate owned is recorded at the lower of the recorded investment in the
loan, plus any senior indebtedness, or at the property’s estimated fair
value, less estimated costs to sell, as applicable. The partnership
periodically compares the carrying value of real estate to expected
undiscounted future cash flows for the purpose of assessing the
recoverability of the recorded amounts. If the carrying value
exceeds future undiscounted cash flows, the assets are reduced to
estimated fair value.
|
(e)
|
Line
of credit and loan commitments (Level 2). The carrying amount
equals fair value. All amounts, including interest payable, are
subject to immediate repayment.
|
March
31,
|
December
31,
|
|||||||
2009
|
2008
|
|||||||
Number
of secured loans outstanding
|
145
|
143
|
||||||
Total
secured loans outstanding
|
$
|
359,426
|
$
|
363,037
|
||||
Average
secured loan outstanding
|
$
|
2,479
|
$
|
2,539
|
||||
Average
secured loan as percent of total secured loans
|
0.69
|
%
|
0.70
|
%
|
||||
Average
secured loan as percent of partners’ capital
|
0.74
|
%
|
0.76
|
%
|
||||
Largest
secured loan outstanding
|
$
|
38,976
|
$
|
38,976
|
||||
Largest
secured loan as percent of total secured loans
|
10.84
|
%
|
10.74
|
%
|
||||
Largest
secured loan as percent of partners’ capital
|
11.59
|
%
|
11.65
|
%
|
||||
Largest
secured loan as percent of total assets
|
9.13
|
%
|
9.17
|
%
|
||||
Number
of counties where security is located (all California)
|
33
|
33
|
||||||
Largest
percentage of secured loans in one county
|
23.23
|
%
|
23.01
|
%
|
||||
Number
of secured loans in foreclosure status
|
6
|
5
|
||||||
Amount
of secured loans in foreclosure
|
$
|
13,352
|
$
|
6,165
|
March
31,
|
December
31,
|
|||||||
2009
|
2008
|
|||||||
First
Trust Deeds
|
$
|
186,444
|
$
|
190,765
|
||||
Second
Trust Deeds
|
171,808
|
171,096
|
||||||
Third
Trust Deeds
|
1,174
|
1,176
|
||||||
Total
loans
|
359,426
|
363,037
|
||||||
Prior
liens due other lenders at time of loan
|
343,154
|
343,399
|
||||||
Total
debt
|
$
|
702,580
|
$
|
706,436
|
||||
Appraised
property value at time of loan
|
$
|
1,036,188
|
$
|
1,044,411
|
||||
Average
secured loan to appraised value of security based
|
||||||||
on
appraised values and prior liens at time loan was
consummated
|
67.80
|
%
|
67.64
|
%
|
||||
Secured
loans by type of property
|
||||||||
Single-family
|
$
|
262,185
|
$
|
266,113
|
||||
Apartments
|
10,688
|
10,727
|
||||||
Commercial
|
83,956
|
83,692
|
||||||
Land
|
2,597
|
2,505
|
||||||
$
|
359,426
|
$
|
363,037
|
Year ending December 31,
|
Amount
|
|||
2009
|
$
|
211,703
|
||
2010
|
59,342
|
|||
2011
|
16,045
|
|||
2012
|
47,093
|
|||
2013
|
18,771
|
|||
Thereafter
|
6,472
|
|||
$
|
359,426
|
·
|
Mortgage
Brokerage Commissions For fees in connection with
the review, selection, evaluation, negotiation and extension of loans,
Redwood Mortgage Corp. may collect an amount equivalent to 12% of the
loaned amount until six months after the termination date of the
offering. Thereafter, the loan brokerage commissions (points)
will be limited to an amount not to exceed 4% of the total partnership
assets per year. The loan brokerage commissions are paid by the
borrowers, and thus, are not an expense of the
partnership. Loan brokerage commissions paid by the borrowers
were $35,000 and $128,000 for the three month periods ended March 31, 2009
and 2008, respectively.
|
·
|
Mortgage
Servicing Fees Monthly mortgage servicing fees of
up to 1/8 of 1% (1.5% on an annual basis) of the unpaid principal of the
partnership’s loans, or such lesser amount as is reasonable and customary
in the geographic area where the property securing the mortgage is
located, are paid to Redwood Mortgage Corp. The table below
summarizes these fees paid by the partnership for the three months ended
March 31, 2009 and 2008 (in
thousands):
|
March
31,
|
March
31,
|
||||||||
2009
|
2008
|
||||||||
Maximum
chargeable
|
$
|
1,072
|
$
|
1,146
|
|||||
Waived
|
(657
|
)
|
(732
|
)
|
|||||
Net
charged
|
$
|
415
|
$
|
414
|
·
|
Asset
Management Fees The general partners receive
monthly fees for managing the partnership’s portfolio and operations up to
1/32 of 1% of the ‘net
asset value’ (3/8 of 1% on an annual basis). The table
below summarizes these fees paid by the partnership for the three months
ended March 31, 2009 and 2008 (in
thousands):
|
March
31,
|
March
31,
|
||||||||
2009
|
2008
|
||||||||
Maximum
chargeable
|
$
|
334
|
$
|
309
|
|||||
Waived
|
—
|
—
|
|||||||
Net
charged
|
$
|
334
|
$
|
309
|
·
|
Other
Fees The partnership agreement provides that the
general partners may receive other fees such as processing and escrow,
reconveyance, mortgage assumption and mortgage extension
fees. Such fees are incurred by the borrowers and are paid to
the general partners. Such fees totaled $5,000 and $27,000 for
the three month periods ended March 31, 2009 and 2008,
respectively.
|
·
|
Income and
Losses All income and losses are credited or
charged to partners in relation to their respective partnership interests.
The allocation of income and losses to the general partners (combined) is
a total of 1%, which was $26,000 and $55,000 for the three month periods
ended March 31, 2009 and 2008,
respectively.
|
·
|
Operating
Expenses Redwood Mortgage Corp. is reimbursed by
the partnership for all operating expenses actually incurred on behalf of
the partnership, including without limitation, out-of-pocket general and
administration expenses of the partnership, accounting and audit fees,
legal fees and expenses, postage and preparation of reports to limited
partners. Operating expenses totaled $112,000 and $84,000 for
the three month periods ended March 31, 2009 and 2008, respectively, and
were reimbursed to Redwood Mortgage
Corp.
|
·
|
Contributed
Capital The general partners jointly and severally
are required to contribute an amount equal to 1/10 of 1% in cash
contributions as proceeds from the partnership’s offering of units
received from the limited partners. As of November 19, 2008,
the date the sixth and final offering closed, Gymno Corporation, a general
partner, had contributed $300,000 as capital in accordance with the
partnership agreement. After adjusting for unallocated
syndication costs, capital and earnings liquidations, the general
partners’ capital was $232,000 and $248,000 as of March 31, 2009 and
December 31, 2008, respectively.
|
·
|
Sales
Commission – “Formation Loan” to Redwood Mortgage
Corp. Sales commissions relating to the capital
contributions by limited partners are not paid directly by the partnership
out of the offering proceeds. Instead, the partnership loans to Redwood
Mortgage Corp., a general partner, amounts necessary to pay all sales
commissions and amounts payable in connection with unsolicited orders. The
loan is referred to as the “formation loan”. It is unsecured and
non-interest bearing and is applied to reduce limited partners’ capital in
the consolidated balance sheets. The sales commissions range between 0%
(for units sold by the general partners) and 9%. The total
amount of the formation loan was 7.5% of the capital contributions by
limited partners.
|
Changes
during the three months ended March 31, 2009 versus 2008
|
|||||||||
Dollars
|
Percent
|
||||||||
Revenue
|
|||||||||
Interest
on loans
|
$ | (1,194 | ) | (15 | ) | % | |||
Imputed
interest on formation loan
|
134 | 84 | |||||||
Other
interest
|
2 | 7 | |||||||
Late
fees
|
(32 | ) | (89 | ) | |||||
Other
|
(19 | ) | (86 | ) | |||||
Total
revenue
|
(1,109 | ) | (14 | ) | |||||
Expenses
|
|||||||||
Mortgage
servicing fees
|
1 | — | |||||||
Interest
expense
|
205 | 54 | |||||||
Amortization
of loan origination fees
|
2 | 7 | |||||||
Provision
for losses on loans and real estate
|
1,407 | 138 | |||||||
Asset
management fees
|
25 | 8 | |||||||
Clerical
costs through Redwood Mortgage Corp.
|
28 | 33 | |||||||
Professional
services
|
(38 | ) | (46 | ) | |||||
Amortization
of discount on imputed interest
|
134 | 84 | |||||||
Other
|
12 | 12 | |||||||
Total
expenses
|
1,776 | 69 | |||||||
Net
income
|
$ | (2,885 | ) | (53 | ) | % |
March
31,
|
||||||||||||||||
2009
|
2008
|
|||||||||||||||
Dollars
|
Percent
|
Dollars
|
Percent
|
|||||||||||||
Location
|
||||||||||||||||
San
Francisco Bay Area
|
$ | 203,568 | 56 | % | $ | 197,250 | 55 | % | ||||||||
Other
Northern California counties
|
59,988 | 17 | 63,929 | 18 | ||||||||||||
Southern
California counties
|
95,870 | 27 | 94,575 | 27 | ||||||||||||
Total
|
$ | 359,426 | 100 | % | $ | 355,754 | 100 | % | ||||||||
Property
type
|
||||||||||||||||
Single
Family
|
$ | 262,185 | 73 | % | $ | 250,561 | 70 | % | ||||||||
Apartments
|
10,688 | 3 | 9,349 | 3 | ||||||||||||
Commercial
|
83,956 | 23 | 92,186 | 26 | ||||||||||||
Land
|
2,597 | 1 | 3,658 | 1 | ||||||||||||
Total
|
$ | 359,426 | 100 | % | $ | 355,754 | 100 | % |
#
of Loans
|
Amount
|
Percent
|
|||||
First
trust deeds
|
78
|
$
|
186,444
|
52
|
%
|
||
Second
trust deeds
|
63
|
171,808
|
48
|
||||
Third
trust deeds
|
4
|
1,174
|
—
|
||||
Total
|
145
|
$
|
359,426
|
100
|
%
|
||
Maturing
prior to December 31, 2009
|
37
|
$
|
211,703
|
59
|
%
|
||
Maturing
during 2010
|
23
|
59,342
|
17
|
||||
Maturing
during 2011
|
19
|
16,045
|
4
|
||||
Maturing
after December 31, 2011
|
66
|
72,336
|
20
|
||||
Total
|
145
|
$
|
359,426
|
100
|
%
|
||
Average
loan
|
$
|
2,479
|
0.69
|
%
|
|||
Largest
loan
|
$
|
38,976
|
10.84
|
%
|
|||
Smallest
loan
|
$
|
5
|
—
|
%
|
|||
Average
Loan-to-Value, based upon appraisals
|
|||||||
and
senior liens at date of inception of loan
|
67.80
|
%
|
·
|
“Construction
Loans” are determined by the management to be those loans made to
borrowers for the construction of entirely new structures or dwellings,
whether residential, commercial or multifamily properties. The
partnership typically approves the borrowers up to a maximum loan balance;
however, disbursements are made in phases throughout the construction
process.
|
·
|
“Rehabilitation
Loans” are used to remodel, add to and/or rehabilitate an existing
structure or dwelling, whether residential, commercial or multifamily
properties, which, in the determination of management are not Construction
Loans. Many of these loans are for cosmetic refurbishment of
both interiors and exteriors of existing condominiums. The
refurbished units are then sold to new users, and the sales proceeds are
used to repay the partnership’s loans. While the partnership
does not classify Rehabilitation Loans as Construction Loans,
Rehabilitation Loans do carry some of the same risks as Construction
Loans. There is no limit on the amount of Rehabilitation Loans
the partnership may make.
|
Construction
|
Rehabilitation
|
|||||||
Disbursed
funds
|
$
|
—
|
$
|
25,193
|
||||
Undisbursed
funds
|
—
|
1,291
|
||||||
Total
|
$
|
—
|
$
|
26,484
|
Contractual
Obligation
|
Total
|
Less
than 1 Year
|
1-3
Years
|
3-5
Years
|
||||||||||||
Line
of credit
|
$
|
85,000
|
$
|
—
|
$
|
70,830
|
$
|
14,170
|
||||||||
Construction
loans
|
—
|
—
|
—
|
—
|
||||||||||||
Rehabilitation
loans
|
1,291
|
1,291
|
—
|
—
|
||||||||||||
Total
|
$
|
86,291
|
$
|
1,291
|
$
|
70,830
|
$
|
14,170
|
REDWOOD
MORTGAGE INVESTORS VIII,
|
A
CALIFORNIA LIMITED PARTNERSHIP
|
By:
|
/S/
Michael R. Burwell
|
||
Michael
R. Burwell, General Partner
|
|||
By:
|
Gymno
Corporation, General Partner
|
||
By:
|
/S/
Michael R. Burwell
|
|
|
Michael
R. Burwell, President, Secretary/Treasurer & Chief Financial
Officer
|
|||
By:
|
Redwood
Mortgage Corp., General Partner
|
||
By:
|
/S/
Michael R. Burwell
|
|
|
Michael
R. Burwell,
President,
Secretary/Treasurer
|
|
I,
Michael R. Burwell, certify that:
|
1.
|
I
have reviewed this quarterly report on Form 10-Q of Redwood Mortgage
Investors VIII, a California Limited Partnership (the
“Registrant”);
|
2.
|
Based
on my knowledge, this report does not contain any untrue statement of a
material fact or omit to state a material fact necessary to make the
statements made, in light of the circumstances under which such statements
were made, not misleading with respect to the period covered by this
report;
|
3.
|
Based
on my knowledge, the financial statements, and other financial information
included in this report, fairly present in all material respects the
financial condition, results of operations and cash flows of the
Registrant as of, and for, the periods presented in this
report;
|
4.
|
The
Registrant’s other certifying officers and I are responsible for
establishing and maintaining disclosure controls and procedures (as
defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal
control over financial reporting (as defined in Exchange Act Rules
13a-15(f) and 15-d-15(f)) for the Registrant and
have:
|
|
(a)
|
designed
such disclosure controls and procedures, or caused such disclosure
controls and procedures to be designed under our supervision, to ensure
that material information relating to the Registrant, including its
consolidated subsidiaries, is made known to us by others within those
entities, particularly during the period in which this report is being
prepared;
|
|
(b)
|
designed
such internal control over financial reporting, or caused such internal
control over financial reporting to be designed under our supervision, to
provide reasonable assurance regarding the reliability of financial
reporting and the preparation of financial statements for external
purposes in accordance with generally accepted accounting
principles;
|
|
(c)
|
evaluated
the effectiveness of the Registrant’s disclosure controls and procedures
and presented in this report our conclusions about the effectiveness of
the disclosure controls and procedures, as of the end of the period
covered by this report based on such evaluation;
and
|
|
(d)
|
disclosed
in this report any change in the Registrant’s internal control over
financial reporting that occurred during the Registrant’s most recent
fiscal quarter (the Registrant’s forth fiscal quarter in the case of an
annual report) that has materially affected, or is reasonably likely to
materially affect, the Registrant’s internal control over financial
reporting; and
|
5.
|
The
Registrant’s other certifying officers and I have disclosed, based on our
most recent evaluation of internal control over financial reporting, to
the Registrant’s auditors and the audit committee of the Registrant’s
board of directors (or persons performing the equivalent
functions):
|
|
(a)
|
all
significant deficiencies and material weaknesses in the design or
operation of internal control over financial reporting which are
reasonably likely to adversely affect the Registrant’s ability to record,
process, summarize and report financial information;
and
|
|
(b)
|
any
fraud, whether or not material, that involves management or other
employees who have a significant role in the Registrant’s internal control
over financial reporting.
|
|
I,
Michael R. Burwell, certify that:
|
1.
|
I
have reviewed this quarterly report on Form 10-Q of Redwood Mortgage
Investors VIII, a California Limited Partnership (the
“Registrant”);
|
2.
|
Based
on my knowledge, this report does not contain any untrue statement of a
material fact or omit to state a material fact necessary to make the
statements made, in light of the circumstances under which such statements
were made, not misleading with respect to the period covered by this
report;
|
3.
|
Based
on my knowledge, the financial statements, and other financial information
included in this report, fairly present in all material respects the
financial condition, results of operations and cash flows of the
Registrant as of, and for, the periods presented in this
report;
|
4.
|
The
Registrant’s other certifying officers and I are responsible for
establishing and maintaining disclosure controls and procedures (as
defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal
control over financial reporting (as defined in Exchange Act Rules
13a-15(f) and 15-d-15(f)) for the Registrant and
have:
|
|
(a)
|
designed
such disclosure controls and procedures, or caused such disclosure
controls and procedures to be designed under our supervision, to ensure
that material information relating to the Registrant, including its
consolidated subsidiaries, is made known to us by others within those
entities, particularly during the period in which this report is being
prepared;
|
|
(b)
|
designed
such internal control over financial reporting, or caused such internal
control over financial reporting to be designed under our supervision, to
provide reasonable assurance regarding the reliability of financial
reporting and the preparation of financial statements for external
purposes in accordance with generally accepted accounting
principles;
|
|
(c)
|
evaluated
the effectiveness of the Registrant’s disclosure controls and procedures
and presented in this report our conclusions about the effectiveness of
the disclosure controls and procedures, as of the end of the period
covered by this report based on such evaluation;
and
|
|
(d)
|
disclosed
in this report any change in the Registrant’s internal control over
financial reporting that occurred during the Registrant’s most recent
fiscal quarter (the Registrant’s forth fiscal quarter in the case of an
annual report) that has materially affected, or is reasonably likely to
materially affect, the Registrant’s internal control over financial
reporting; and
|
5.
|
The
Registrant’s other certifying officers and I have disclosed, based on our
most recent evaluation of internal control over financial reporting, to
the Registrant’s auditors and the audit committee of the Registrant’s
board of directors (or persons performing the equivalent
functions):
|
|
(a)
|
all
significant deficiencies and material weaknesses in the design or
operation of internal control over financial reporting which are
reasonably likely to adversely affect the Registrant’s ability to record,
process, summarize and report financial information;
and
|
|
(b)
|
any
fraud, whether or not material, that involves management or other
employees who have a significant role in the Registrant’s internal control
over financial reporting.
|
|
(1)
|
The
Report fully complies with the requirements of Section 13(a) or 15(d) of
the Securities Exchange Act of 1934;
and
|
|
(2)
|
The
information contained in the Report fairly presents, in all material
respects, the financial condition and results of operations of the
Partnership at the dates and for the periods
indicated.
|
|
(1)
|
The
Report fully complies with the requirements of Section 13(a) or 15(d) of
the Securities Exchange Act of 1934;
and
|
|
(2)
|
The
information contained in the Report fairly presents, in all material
respects, the financial condition and results of operations of the
Partnership at the dates and for the periods
indicated.
|
|
Michael
R. Burwell, President,
|
|
Secretary/Treasurer
& Chief Financial
|
|
Officer
of Gymno Corporation, General
Partner,
|
|
and
Redwood Mortgage Corp., General
Partner
|
|
May
15, 2009
|