Note 6 - Real Estate Owned (REO), Held for Sale

9 Months Ended

Sep. 30, 2011

Real Estate Owned [Text Block]

NOTE 6 – REAL ESTATE OWNED (REO), HELD FOR SALE

REO, held for sale activity and changes in the net realizable values are summarized in the following table ($ in thousands).

	Nine months ended September 30,
	2011			2010
REO, held for sale, January 1,	$	54,206		$	8,102
Acquisitions		16,200			9,726
Dispositions		(21,202	)		(5,449	)
Improvements/betterments/(refunds)		(13	)		9
Designated from real estate held as investment		14,019			16,380
Charge-offs					(245	)
Changes in net realizable values		(1,809	)		49
Depreciation		(181	)		—
REO, held for sale, September 30,	$	61,220		$	28,572

REO, held for sale summarized by property type is presented in the following table ($ in thousands).

	September 30,		December 31,
	2011		2010
Number of properties		10		10
Property type
Single family	$	6,093	$	7,099
Multi-family		23,327		32,777
Commercial		31,800		14,330
Total REO, held for sale	$	61,220	$	54,206

The results of operations for rental properties in REO, held for sale is presented in the following table ($ in thousands).The table below reflects rental operations, net for those properties classified as REO, held for sale at September 30, 2011 and September 30, 2010.

	Three months ended September 30,					Nine months ended September 30,
	2011			2010		2011			2010
Rental income	$	381		$	706	$	1,773		$	932
Operating expenses
Property taxes		53			104		260			193
Management, administration and insurance		127			213		711			222
Utilities, maintenance and other		199			68		727			119
Advertising and promotions		2			—		7			1
Total operating expenses		381			385		1,705			535
Net operating income		—			321		68			397
Depreciation		48			73		181			73
Rental operations, net(1)	$	(48	)	$	248	$	(113	)	$	324

(1) Interest expense on the mortgages securing the rental property was $60,000 and $263,000 for the three month periods ended September 30, 2011 and 2010, respectively, and $782,000 and $392,000 for the nine month periods ended September 30, 2011 and 2010, respectively.

In the third quarter of 2011, the partnership acquired through foreclosure, a development site located in San Francisco County, California, currently operating as a parking lot.  The property is adjacent to the proposed TransBay terminal and is zoned for a high-rise building.  The recorded investment was approximately $16,200,000.