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Loans (Tables)
 9 Months Ended
Sep. 30, 2021
Secured Loan Principal Transactions

Secured loan transactions for the three and nine months ended September 30, 2021, are summarized in the following table ($ in thousands).

 

 

 

Three months ended

 

 

Nine months ended

 

Principal, beginning of period

 

$

72,548

 

 

$

74,080

 

Loans funded

 

 

4,885

 

 

 

20,421

 

Principal collected

 

 

(6,167

)

 

 

(19,449

)

Loan transferred from related mortgage fund

 

 

—

 

 

 

1,371

 

Loans transferred to related mortgage fund

 

 

(1,039

)

 

 

(5,711

)

Loans sold to non-affiliate

 

 

—

 

 

 

(485

)

Principal, September 30, 2021

 

$

70,227

 

 

$

70,227

 

 

During the nine months ended September 30, 2021, the partnership renewed five maturing (or matured) loans with aggregated principal of approximately $23,035,000, which are not included in the activity shown in the table above. The loans were current and deemed well collateralized (i.e., the LTV for the collateral was within lending guidelines) at the time they were extended. The partnership did not renew any loans during the three months ended September 30, 2021.

The partnership funds loans with the intent to hold the loans until maturity, although from time to time the partnership may sell certain loans when the manager determines it to be in the best interest of the partnership.

In January 2021, a loan with principal of approximately $485,000, was sold to an unaffiliated third party, for an amount that approximated the loan balance at the time of sale.
Secured Loans Characteristics

Secured loans had the characteristics presented in the following table ($ in thousands).

 

 

 

September 30,

 

 

December 31,

 

 

 

2021

 

 

2020

 

Number of secured loans

 

 

33

 

 

 

33

 

Secured loans – principal

 

$

70,227

 

 

$

74,080

 

Secured loans – lowest interest rate (fixed)

 

 

7.0

%

 

 

5.0

%

Secured loans – highest interest rate (fixed)

 

 

10.8

%

 

 

10.8

%

 

 

 

 

 

 

 

Average secured loan – principal

 

$

2,128

 

 

$

2,245

 

Average principal as percent of total principal

 

 

3.0

%

 

 

3.0

%

Average principal as percent of partners’ capital, net of formation loan

 

 

3.1

%

 

 

2.9

%

Average principal as percent of total assets

 

 

2.6

%

 

 

2.7

%

 

 

 

 

 

 

 

Largest secured loan – principal

 

$

10,200

 

 

$

10,200

 

Largest principal as percent of total principal

 

 

14.5

%

 

 

13.8

%

Largest principal as percent of partners’ capital, net of formation loan

 

 

14.9

%

 

 

13.0

%

Largest principal as percent of total assets

 

 

12.6

%

 

 

12.1

%

 

 

 

 

 

 

 

Smallest secured loan – principal

 

$

57

 

 

$

46

 

Smallest principal as percent of total principal

 

 

0.1

%

 

 

0.1

%

Smallest principal as percent of partners’ capital, net of formation loan

 

 

0.1

%

 

 

0.1

%

Smallest principal as percent of total assets

 

 

0.1

%

 

 

0.1

%

 

 

 

 

 

 

 

Number of California counties where security is located

 

 

12

 

 

 

14

 

Largest percentage of principal in one California county

 

 

38.6

%

 

 

40.0

%
Secured Loans by Lien Position in the Collateral

At funding, secured loans had the lien positions presented in the following table ($ in thousands).

 

 

 

September 30, 2021

 

 

December 31, 2020

 

 

 

Loans

 

 

Principal

 

 

Percent

 

 

Loans

 

 

Principal

 

 

Percent

 

First trust deeds

 

 

26

 

 

$

61,164

 

 

 

87

%

 

 

24

 

 

$

64,286

 

 

 

87

%

Second trust deeds

 

 

7

 

 

 

9,063

 

 

 

13

 

 

 

9

 

 

 

9,794

 

 

 

13

 

Total principal, secured loans

 

 

33

 

 

 

70,227

 

 

 

100

%

 

 

33

 

 

 

74,080

 

 

 

100

%

Liens due other lenders at loan closing

 

 

 

 

 

15,668

 

 

 

 

 

 

 

 

 

15,759

 

 

 

 

Total debt

 

 

 

 

$

85,895

 

 

 

 

 

 

 

 

$

89,839

 

 

 

 

Appraised property value at loan closing

 

 

 

 

$

160,410

 

 

 

 

 

 

 

 

$

180,041

 

 

 

 

Percent of total debt to appraised values (LTV)
   at loan closing(1)

 

 

 

 

 

56.6

%

 

 

 

 

 

 

 

 

53.8

%

 

 

 

 

(1)
Based on appraised values and liens due other lenders at loan closing. The weighted-average loan-to-value (LTV) computation above does not take into account subsequent increases or decreases in property values following the loan closing, nor does it include decreases or increases on senior liens to other lenders.
Secured Loans By Property Type Of The Collateral Table Text Block

Secured loans summarized by property type are presented in the following table ($ in thousands).

 

 

 

September 30, 2021

 

 

December 31, 2020

 

 

 

Loans

 

 

Principal

 

 

Percent

 

 

Loans

 

 

Principal

 

 

Percent

 

Single family(2)

 

 

16

 

 

$

13,492

 

 

 

19

%

 

 

19

 

 

$

16,598

 

 

 

22

%

Multi-family

 

 

2

 

 

 

8,200

 

 

 

12

 

 

 

1

 

 

 

6,300

 

 

 

9

 

Commercial

 

 

15

 

 

 

48,535

 

 

 

69

 

 

 

12

 

 

 

49,682

 

 

 

67

 

Land

 

 

—

 

 

 

—

 

 

 

—

 

 

 

1

 

 

 

1,500

 

 

 

2

 

Total principal, secured loans

 

 

33

 

 

$

70,227

 

 

 

100

%

 

 

33

 

 

$

74,080

 

 

 

100

%

 

Single family property type at September 30, 2021, consists of 4 loans with aggregate principal of approximately $1,793,000 that are owner occupied and 12 loans with aggregate principal of approximately $11,699,000 that are non-owner occupied. At December 31, 2020, single family property type consisted of 8 loans with aggregate principal of $3,344,000 that are owner occupied and 11 loans with aggregate principal of $13,254,000 that are non-owner occupied. Single family includes 1-4 unit residential buildings, condominium units, townhouses and condominium complexes.
Secured Loans Distributed within California

The distribution of secured loans within California by counties is presented in the following table ($ in thousands).

 

 

 

September 30, 2021

 

 

December 31, 2020

 

 

 

Principal

 

 

Percent

 

 

Principal

 

 

Percent

 

San Francisco Bay Area(3)

 

 

 

 

 

 

 

 

 

 

 

 

San Francisco

 

$

27,121

 

 

 

38.6

%

 

$

29,659

 

 

 

40.0

%

San Mateo

 

 

8,610

 

 

 

12.3

 

 

 

16,756

 

 

 

22.6

 

Alameda

 

 

6,240

 

 

 

8.9

 

 

 

823

 

 

 

1.1

 

Santa Clara

 

 

4,600

 

 

 

6.6

 

 

 

4,600

 

 

 

6.2

 

Marin

 

 

1,656

 

 

 

2.3

 

 

 

917

 

 

 

1.2

 

Sonoma

 

 

578

 

 

 

0.8

 

 

 

—

 

 

 

0.0

 

Contra Costa

 

 

—

 

 

 

—

 

 

 

302

 

 

 

0.4

 

 

 

 

48,805

 

 

 

69.5

 

 

 

53,057

 

 

 

71.5

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Other Northern California

 

 

 

 

 

 

 

 

 

 

 

 

Mariposa

 

 

57

 

 

 

0.1

 

 

 

46

 

 

 

0.1

 

Placer

 

 

—

 

 

 

0.0

 

 

 

1,500

 

 

 

2.0

 

Santa Cruz

 

 

—

 

 

 

0.0

 

 

 

485

 

 

 

0.7

 

Amador

 

 

—

 

 

 

0.0

 

 

 

701

 

 

 

0.9

 

 

 

 

57

 

 

 

0.1

 

 

 

2,732

 

 

 

3.7

 

Northern California Total

 

 

48,862

 

 

 

69.6

 

 

 

55,789

 

 

 

75.2

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Los Angeles & Coastal

 

 

 

 

 

 

 

 

 

 

 

 

Los Angeles

 

 

11,269

 

 

 

16.0

 

 

 

10,199

 

 

 

13.8

 

Orange

 

 

2,194

 

 

 

3.1

 

 

 

642

 

 

 

0.9

 

Santa Barbara

 

 

2,062

 

 

 

2.9

 

 

 

2,070

 

 

 

2.8

 

Riverside

 

 

460

 

 

 

0.7

 

 

 

—

 

 

 

0.0

 

 

 

 

15,985

 

 

 

22.7

 

 

 

12,911

 

 

 

17.5

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Other Southern California

 

 

 

 

 

 

 

 

 

 

 

 

San Bernardino

 

 

5,380

 

 

 

7.7

 

 

 

5,380

 

 

 

7.3

 

 

 

 

5,380

 

 

 

7.7

 

 

 

5,380

 

 

 

7.3

 

Southern California Total

 

 

21,365

 

 

 

30.4

 

 

 

18,291

 

 

 

24.8

 

Total principal, secured loans

 

$

70,227

 

 

 

100.0

%

 

$

74,080

 

 

 

100.0

%

 

(3)
Includes the Silicon Valley
Secured Loans Scheduled Maturities

Secured loans scheduled to mature as of September 30, 2021 are presented in the following table ($ in thousands).

 

 

 

Loans

 

 

Principal

 

 

Percent

 

2021

 

 

2

 

 

$

1,000

 

 

 

1

%

2022

 

 

20

 

 

 

54,628

 

 

 

78

 

2023

 

 

4

 

 

 

3,713

 

 

 

5

 

2024

 

 

1

 

 

 

590

 

 

 

1

 

2025

 

 

—

 

 

 

—

 

 

 

—

 

Thereafter

 

 

2

 

 

 

1,312

 

 

 

2

 

Total scheduled maturities

 

 

29

 

 

 

61,243

 

 

 

87

 

Matured at September 30, 2021

 

 

4

 

 

 

8,984

 

 

 

13

 

Total principal, secured loans

 

 

33

 

 

$

70,227

 

 

 

100

%
Past Due Financing Receivables Payments in arrears for non-performing secured loans (i.e., monthly interest and principal payments past due 30 or more days) at September 30, 2021 and December 31, 2020, are presented in the following tables.

 

 

 

Loans

 

 

Principal

 

 

Interest(4)

 

 

 

 

At September 30, 2021

 

Past
maturity

 

 

Monthly
payments

 

 

Past
maturity

 

 

Monthly
payments

 

 

Past
maturity

 

 

Monthly
payments

 

 

Total
payments
in arrears

 

Past due

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

30-89 days (1-3 payments)(5)

 

 

1

 

 

 

1

 

 

$

7,994

 

 

$

—

 

 

$

56

 

 

$

16

 

 

$

8,066

 

90-179 days (4-6 payments)

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

180 or more days (more than 6
   payments)(6)

 

 

4

 

 

 

—

 

 

 

6,370

 

 

 

—

 

 

 

228

 

 

 

—

 

 

 

6,598

 

Total past due

 

 

5

 

 

 

1

 

 

$

14,364

 

 

$

—

 

 

$

284

 

 

$

16

 

 

$

14,664

 

 

(4)
Interest includes foregone interest of approximately $228,000 on non-accrual loans past maturity. Interest for September 2021 is due on October 1, 2021 and is not included in the payments in arrears at September 30, 2021.
(5)
One loan, with principal of approximately $7,994,000 and interest of approximately $56,000, included in past maturity payments (principal and interest) 30-89 days, was brought current and extended in October 2021. The loans new maturity date is March 2022.
(6)
One loan, with principal of approximately $5,380,000, included in past maturity payments (principal and interest) 180 or more days, had forbearance agreements in place at September 30, 2021.

 

 

 

Loans

 

 

Principal

 

 

Interest(7)

 

 

 

 

At December 31, 2020

 

Past
maturity

 

 

Monthly
payments

 

 

Past
maturity

 

 

Monthly
payments

 

 

Past
maturity

 

 

Monthly
payments

 

 

Total
payments
in arrears

 

Past due

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

30-89 days (1-3 payments)

 

 

—

 

 

 

—

 

 

$

—

 

 

$

—

 

 

$

—

 

 

$

—

 

 

$

—

 

90-179 days (4-6 payments)

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

180 or more days (more than
   6 payments)(8)

 

 

3

 

 

 

—

 

 

 

15,139

 

 

 

—

 

 

 

849

 

 

 

—

 

 

 

15,988

 

Total past due

 

 

3

 

 

 

—

 

 

$

15,139

 

 

$

—

 

 

$

849

 

 

$

—

 

 

$

15,988

 

 

(7)
Interest includes foregone interest of approximately $512,000 on non-accrual loans past maturity. Interest for December 2020 was due on January 1, 2021 and is not included in the payments in arrears at December 31, 2020.
(8)
Two loans, with an aggregate principal of approximately $10,735,000, included in past maturity payments (principal and interest) 180 or more days, had forbearance agreements in place at December 31, 2020.
Secured Loans in Non-Accrual Status

Delinquency/Loans in non-accrual status

Secured loans in non-accrual status are summarized in the following table ($ in thousands).

 

 

 

September 30, 2021

 

 

December 31, 2020

 

Number of loans

 

 

4

 

 

 

3

 

Principal

 

$

6,370

 

 

$

15,139

 

Advances

 

 

109

 

 

 

24

 

Accrued interest(9)

 

 

53

 

 

 

368

 

Total recorded investment

 

$

6,532

 

 

$

15,531

 

Foregone interest

 

$

262

 

 

$

582

 

 

(9)
Accrued interest in the table above is the amount of interest accrued prior to the loan being placed on non-accrual status, net of any payments received while in non-accrual status.
Activity in the Allowance for Loan Losses

Activity in the allowance for loan losses for the nine months ended September 30, 2021 and 2020 is presented in the following table ($ in thousands).

 

 

 

2021

 

 

2020

 

Balance, January 1

 

$

50

 

 

$

50

 

Provision for loan loss

 

 

5

 

 

 

134

 

Recovery for loan losses

 

 

—

 

 

 

(134

)

Balance, September 30

 

$

55

 

 

$

50

 

 
By Days Past Due [Member]  
Past Due Financing Receivables

Secured loans summarized by payment-delinquency status are presented in the following table ($ in thousands).

 

 

 

September 30, 2021

 

 

December 31, 2020

 

 

 

Loans

 

 

Principal

 

 

Loans

 

 

Principal

 

Current

 

 

27

 

 

$

53,800

 

 

 

30

 

 

$

58,941

 

Past Due

 

 

 

 

 

 

 

 

 

 

 

 

30-89 days

 

 

2

 

 

 

10,057

 

 

 

—

 

 

 

—

 

90-179 days

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

180 or more days

 

 

4

 

 

 

6,370

 

 

 

3

 

 

 

15,139

 

Total past due

 

 

6

 

 

 

16,427

 

 

 

3

 

 

 

15,139

 

Total principal, secured loans

 

 

33

 

 

$

70,227

 

 

 

33

 

 

$

74,080

 
Impaired Loans [Member]  
Impaired Financing Receivables

Loans designated impaired and any associated allowance for loan losses is presented in the following table ($ in thousands).

 

 

 

September 30, 2021

 

 

December 31, 2020

 

Number of loans

 

 

4

 

 

 

3

 

Principal

 

$

6,370

 

 

$

15,139

 

Recorded investment(10)

 

 

6,532

 

 

 

15,531

 

Impaired loans without allowance

 

 

6,532

 

 

 

15,531

 

Impaired loans with allowance

 

 

—

 

 

 

—

 

Allowance for loan losses, impaired loans

 

 

—

 

 

 

—

 

Weighted average LTV at origination

 

 

51.4

%

 

 

54.0

%

 

 

(10)
Recorded investment is the sum of principal, advances, and accrued interest for financial reporting purposes.
Average Balances And Interest Income [Member]  
Impaired Financing Receivables

Loans designated impaired had an average recorded investment balance, interest income recognized, and interest income received in cash for the nine months ended September 30, 2021 and the year ended December 31, 2020 as presented in the following table ($ in thousands).

 

 

 

September 30, 2021

 

 

December 31, 2020

 

Average recorded investment

 

$

11,032

 

 

$

14,231

 

Interest income recognized

 

 

64

 

 

 

1,271

 

Interest income received in cash

 

 

374

 

 

 

502