Note 3 - General Partners and Related Parties

6 Months Ended

Jun. 30, 2012

Related Party Transactions Disclosure [Text Block]

NOTE 3 – GENERAL PARTNERS AND RELATED PARTIES

The general partners are entitled to one percent of the profits and losses, which amounted to approximately $(19,000) and $(36,000) for the three months and $(32,000) and $(46,000) for the six months ended June 30, 2012 and 2011, respectively.

Formation loan

Formation loan transactions are presented in the following table at June 30, 2012 ($ in thousands).

Formation loan made	$	22,567
Unamortized discount on formation loan		(1,196	)
Formation loan made, net		21,371
Repayments to date		(14,297	)
Early withdrawal penalties applied		(643	)
Formation loan, net		6,431
Unamortized discount on formation loan		1,196
Balance, June 30, 2012	$	7,627

An estimated amount of imputed interest is recorded for any outstanding offerings. During the three months ended June 30, 2012 and 2011, $41,000 and $79,000, respectively, was recorded related to imputed interest, and for the six months ended June 30, 2012 and 2011 $93,000 and $204,000, respectively, was recorded.

The proceeds from loan brokerage commissions and other fees earned are the source of funds for the repayment of the formation loans by RMC.

The following commissions and/or fees are paid by the borrowers to the general partners and their affiliates and are not an expense of the partnership.

Brokerage commissions, loan originations

Loan brokerage commissions paid by the borrowers during the three months ended June 30, 2012 and 2011 were $105,000 and $0 respectively, and during the six months ended June 30, 2012 and 2011 were $107,000 and $0, respectively.

Other fees

Other fees totaled $1,040 and $755 for the three month periods ended June 30, 2012 and 2011, respectively and $1,355 and $1,205 for the six month periods ended June 30, 2012 and 2011.

The following fees are paid by the partnership to RMC.

Mortgage servicing fees

RMC may earn mortgage servicing fees of up to 1.5% annually of the unpaid principal of the loan portfolio or such lesser amount as is reasonable and customary in the geographic area where the property securing the mortgage is located from RMI VIII. Historically, RMC charged one percent annually, and at times waived additional amounts to improve the partnership’s earnings. Such fee waivers were not made for the purpose of providing the partnership with sufficient funds to satisfy withdrawal requests, nor were such waivers made in order to meet any required level of distributions, as the partnership has no such required level of distributions. RMC does not use any specific criteria in determining the amount of fees, if any, to be waived. The decision to waive fees and the amount, if any, to be waived, is made by RMC in its sole discretion.

Mortgage servicing fees are summarized in the following table for the three and six months ended June 30 ($ in thousands).

	Three months ended June 30,						Six months ended June 30,
	2012			2011			2012			2011
Chargeable by RMC	$	268		$	1,636		$	538		$	1,909
Waived by RMC		(90	)		(545	)		(180	)		(636	)
Charged to RMI VIII	$	178		$	1,091		$	358		$	1,273

Asset management fees

The general partners receive monthly fees for managing the partnership’s loan portfolio and operations of up to 1/32 of 1% of the “net asset value” (3/8 of 1% annually). At times, the general partners have charged less than the maximum allowable rate to enhance the partnership’s earnings. Such fee waivers were not made with the purpose of providing the partnership with sufficient funds to satisfy withdrawal requests, nor to meet any required level of distributions, as the partnership has no such required level of distributions. the general partners do not use any specific criteria in determining the exact amount of fees, if any, to be waived. The decision to waive fees and the amount, if any, to be waived, is made by the general partners in their sole discretion.

Asset management fees for the three months ended June 30, 2012 and 2011 were $224,000 and $240,000, respectively, and for the six months ended June 30, 2012 and 2011, were $450,000 and $487,000, respectively. No asset management fees were waived during any period reported.

Costs from RMC

RMC is reimbursed by the partnership for operating expenses incurred on behalf of the partnership, including without limitation, accounting and audit fees, legal fees and expenses, postage and preparation of reports to limited partners, and out-of-pocket general and administration expenses. The decision to request reimbursement of any qualifying charges is made by RMC in its sole discretion. Operating expenses were $317,000 and $456,000, for the three months ended June 30, 2012 and 2011, respectively, and $678,000 and $566,000, for the six months ended June 30, 2012 and 2011, respectively. To the extent some operating expenses incurred on behalf of RMI VIII were not charged by RMC, the financial position and results of operations for the partnership would be different.