Real estate owned (REO) (Tables)

9 Months Ended

Sep. 30, 2016

Transactions and activity, including changes in the net book values, are presented in the following table for the three and nine months ended September 30, 2016 ($ in thousands).

	For the Three Months Ended September 30,			For the Nine Months Ended September 30,
Balance, beginning of period	$	80,166		$	82,949
Acquisitions		878			2,266
Dispositions		(4,940	)		(9,356	)
Improvements/betterments		96			341
Balance, end of period	$	76,200		$	76,200

REO Held for Sale by Property Type

REO summarized by property classification is presented in the following table ($ in thousands).

	September 30, 2016				December 31, 2015
	Properties		NBV		Properties		NBV
Property classification
Rental		7	$	72,282		8	$	79,149
Non-Rental		3		3,918		3		3,800
Total REO, net		10	$	76,200		11	$	82,949

Earnings/(Loss) from Rental Operations of the Real Estate Owned, Held as Investment

Earnings from rental operations are presented in the following table for the three and nine months ended September 30, 2016 and 2015 ($ in thousands).

	Three Months Ended				Nine Months Ended
	2016		2015		2016		2015
Rental income	$	1,394	$	2,336	$	4,175	$	7,464
Operating expenses, rentals
Administration and payroll		160		354		543		1,041
Homeowner association fees		122		151		352		527
Professional services		36		21		62		38
Utilities and maintenance		310		302		698		846
Advertising and promotions		18		24		27		61
Property taxes		191		270		588		890
Other		24		36		105		177
Total operating expenses, rentals		861		1,158		2,375		3,580
Net operating income		533		1,178		1,800		3,884
Depreciation		—		—		—		294
Receiver fees		15		5		17		15
Rental operations, net		518		1,173		1,783		3,575
Interest on mortgages		235		641		737		1,413
Rental operation, net of mortgage interest	$	283	$	532	$	1,046	$	2,162

Schedule of Participating Mortgage Loans

Mortgages payable transactions are summarized in the following table for the nine months ended September 30, 2016 ($ in thousands).

	2016
Principal, January 1	$	27,509
Mortgages acquired by foreclosure⁽¹⁾		926
Principal repaid		(1,346	)
Principal, September 30	$	27,089

(1)

In February, 2016, the partnership took ownership of a property through foreclosure of its second mortgage, subject to the existing deed of trust. The loan was paid in full in June 2016.

Mortgage payable as of September 30, 2016 and December 31, 2015 are summarized in the following table (mortgage balance $ in thousands).

September 30,

December 31,

2016

2015

NorthMarq Capital – Secured by a condominium complex,

located in Los Angeles County, matures July 1, 2022,

interest rate (3.11%) varies monthly (LIBOR plus 2.73%),

monthly payment⁽²⁾⁽³⁾ $167,753

27,089

27,509

(2)	Monthly payments include amounts for various impounds such as property taxes, insurance, and repairs.

(3)	Monthly payments based upon a 30-year amortization, with a balloon payment due at maturity.

Schedule of Future Minimum Rental Payments for Operating Leases

Future minimum payments of principal at September 30, 2016 are presented in the following table ($ in thousands).

2016 (October 1 to December 31)	$	144
2017		586
2018		606
2019		625
2020		646
Thereafter		24,482
Total	$	27,089