IMPAC MORTGAGE HOLDINGS INC: ОБСУЖДЕНИЕ И АНАЛИЗ РУКОВОДСТВА ФИНАНСОВОГО СОСТОЯНИЯ И РЕЗУЛЬТАТОВ ДЕЯТЕЛЬНОСТИ (форма 10-Q)

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(в тысячах долларов, за исключением данных на акцию или иных указаний)

Unless the context otherwise requires, the terms "Company," "we," "us," and
"our" refer to Impac Mortgage Holdings, Inc. (the Company or IMH), a Maryland
corporation incorporated in August 1995, and its direct and indirect
wholly-owned operating subsidiaries, Integrated Real Estate Service Corporation
(IRES), Impac Mortgage Corp. (IMC), IMH Assets Corp. (IMH Assets), Copperfield
Capital Corporation (CCC) and Impac Funding Corporation (IFC).

Прогнозные заявления

This report on Form 10-Q contains certain forward-looking statements within the
meaning of Section 27A of the Securities Act of 1933 and Section 21E of the
Securities Exchange Act of 1934. Forward-looking statements, some of which are
based on various assumptions and events that are beyond our control, may be
identified by reference to a future period or periods or by the use of
forward-looking terminology, such as "may," "will," "believe," "expect,"
"likely," "projected," "should," "could," "seem to," "anticipate," "plan,"
"intend," "project," "assume," or similar terms or variations on those terms or
the negative of those terms. The forward-looking statements are based on current
management expectations. Actual results may differ materially as a result of
several factors, including, but not limited to the following: ongoing impact on
the U.S. economy and financial markets due to the outbreak of the novel
coronavirus, and any adverse impact or disruption to the Company's operations;
unemployment rates; successful development, marketing, sale and financing of new
and existing financial products, ability to successfully re-engage in lending
activities; inability to successfully reduce prepayment on our mortgage loans;
ability to successfully diversify our loan products; decrease in our mortgage
servicing portfolio or its market value; ability to increase our market share
and geographic footprint in the various residential mortgage businesses; ability
to manage and sell MSRs as needed; ability to successfully sell loans to
third-party investors; volatility in the mortgage industry; unexpected interest
rate fluctuations and margin compression; our ability to manage personnel
expenses in relation to mortgage production levels; our ability to successfully
use warehousing capacity and satisfy financial covenants; increased competition
in the mortgage lending industry by larger or more efficient companies; issues
and system risks related to our technology including cyber risk and data
security risk; ability to successfully create cost and product efficiencies
through new technology; more than expected increases in default rates or loss
severities and mortgage related losses; ability to obtain additional financing,
through lending and repurchase facilities, debt or equity funding, strategic
relationships or otherwise; the terms of any financing, whether debt or equity,
that we do obtain and our expected use of proceeds from any financing; increase
in loan repurchase requests and ability to adequately settle repurchase
obligations; failure to create brand awareness; the outcome, including any
settlements, of litigation or regulatory actions pending against us or other
legal contingencies; and our compliance with applicable local, state and federal
laws and regulations and other general market and economic conditions.

For a discussion of these and other risks and uncertainties that could cause
actual results to differ from those contained in the forward-looking statements,
see "Risk Factors" and "Management's Discussion and Analysis of Financial
Condition and Results of Operations" in the Company's Annual Report on Form 10-K
for the period ended December 31, 2020, and other subsequent reports we file
under the Securities Exchange Act of 1934. This document speaks only as of its
date and we do not undertake, and specifically disclaim any obligation, to
release publicly the results of any revisions that may be made to any
forward-looking statements to reflect the occurrence of anticipated or
unanticipated events or circumstances after the date of such statements except
as required by law.

Ипотечная отрасль и обсуждение соответствующих финансовых периодов


The mortgage industry is subject to current events that occur in the financial
services industry including changes to regulations and compliance requirements
that result in uncertainty surrounding the actions of states, municipalities and
government agencies, including the Consumer Financial Protection Bureau (CFPB)
and Federal Housing Finance Agency (FHFA). These events can also include changes
in economic indicators, interest rates, price competition, geographic shifts,
disposable income, housing prices, market liquidity, market anticipation,
environmental conditions, such as hurricanes, fires and floods, and customer
perception, as well as others. The factors that affect the industry change
rapidly and can be unforeseeable making it difficult to predict and manage an
operation in the financial services industry.

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Оглавление


Current events can diminish the relevance of "quarter over quarter" and
"year-to-date over year-to-date" comparisons of financial information. In such
instances, we attempt to present financial information in Management's
Discussion and Analysis of Financial Condition and Results of Operations that is
the most relevant to our financial information.

Selected Financial Results




                                       For the Three Months Ended             For the Six Months Ended
                                June 30,       March 31,      June 30,        June 30,        June 30,
(in thousands, except per
share data)                        2021           2021           2020           2021             2020
Revenues:
Gain (loss) on sale of
loans, net                      $   10,693$     20,131$    1,451$      30,824$ (26,712)
Servicing (expense) fees,
net                                  (150)           (119)         1,352            (269)          3,859
(Loss) gain on mortgage
servicing rights, net                 (37)              38       (8,443)                1       (26,753)
Real estate services fees,
net                                    478             210           293              688            687
Other                                  (4)             324         1,289              320          1,352
Total revenues (losses)             10,980          20,584       (4,058)           31,564       (47,567)
Expenses:
Personnel expense                   11,964          14,924         7,774           26,888         28,439
Business promotion                   1,770           1,193            74            2,963          3,203
General, administrative and
other                                5,882           5,181         6,617           11,063         13,590
Total expenses                      19,616          21,298        14,465           40,914         45,232
Operating loss:                    (8,636)           (714)      (18,523)          (9,350)       (92,799)
Other (expense) income:
Net interest income                    558             660           781            1,218          3,709
Change in fair value of
long-term debt                       1,417           1,025       (4,208)            2,442          4,828
Change in fair value of net
trust assets                       (2,141)         (1,673)         (864)          (3,814)        (3,247)
Total other (expense) income         (166)              12       (4,291)            (154)          5,290
Loss before income taxes           (8,802)           (702)      (22,814)          (9,504)       (87,509)
Income tax expense (benefit)            62            (19)            15               43             51
Net loss                        $  (8,864)$      (683)$ (22,829)$     (9,547)$ (87,560)
Other comprehensive loss:
Change in fair value of
instrument specific credit
risk                                 (538)         (1,667)         2,186          (2,205)          (887)
Total comprehensive loss        $  (9,402)$    (2,350)$ (20,643)$    (11,752)$ (88,447)

Diluted weighted average
common shares                       21,344          21,294        21,230           21,319         21,229
Diluted loss per share          $   (0.42)$     (0.03)$   (1.08)$      (0.45)$   (4.12)






Status of Operations


Ключевые показатели – второй квартал 2021 года

? В 30 июня 2021 г., наличные деньги без ограничений были 50,2 млн. Долл. США по сравнению с 54,2 долл. США

миллион в 31 декабря 2020 г..

За истекшие три месяца 30 июня 2021 г., всего происхождения были 611,5 долл. США

? миллионов по сравнению с 849,9 млн. Долл. США за истекшие три месяца 31 марта 2021 г.

и 2,1 миллиона долларов за истекшие три месяца 30 июня 2020 г..

За истекшие три месяца 30 июня 2021 г., неквалифицированная ипотека (NonQM)

? объемы выдачи были 100,6 млн. Долл. США по сравнению с 14,7 млн. Долл. США для

три месяца закончились 31 марта 2021 г. и 0,2 миллиона долларов за истекшие три месяца

   June 30, 2020.



Чистая потеря 8,9 млн. Долл. США за истекшие три месяца 30 июня 2021 г. в сравнении

? чистый убыток 683 тыс. $ за истекшие три месяца 31 марта 2021 г. и чистая

утрата 22,8 млн. Долл. США за истекшие три месяца 30 июня 2020 г..


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Чистая прибыль от продажи кредитов составила 10,7 млн. Долл. США за истекшие три месяца

? 30 июня 2021 г. по сравнению с 20,1 млн. Долл. США за истекшие три месяца 31 марта,

2021 г. и 1,5 миллиона долларов за истекшие три месяца 30 июня 2020 г..

Операционные расходы (персонал, продвижение бизнеса и общие, административные

? и прочее) за истекшие три месяца 30 июня 2021 г. уменьшился до 19,6 млн. Долл. США

из 21,3 млн. Долл. США за истекшие три месяца 31 марта 2021 г. и уменьшился с

   $14.5 million for the three months ended June 30, 2020.




For the three months ended June 30, 2021, we reported net loss of $8.9 million,
or $0.42 per diluted common share, as compared to net loss of $22.8 million, or
$1.08 per diluted common share, for the three months ended June 30, 2020.  For
the three months ended June 30, 2021, core loss before tax (as defined below in
Non-GAAP Financial Measures) was $6.9 million, or $0.32 per diluted common
share, as compared to core loss before tax of $10.4 million, or $0.49 per
diluted common share, for the three months ended June 30, 2020.



For the six months ended June 30, 2021, we reported net loss of $9.5 million, or
$0.45 per diluted common share, as compared to net loss of $87.6 million, or
$4.12 per diluted common share, for the six months ended June 30, 2020.  For the
six months ended June 30, 2021, core loss before tax (as defined below in
Non-GAAP Financial Measures) was $7.2 million, or $0.34 per diluted common
share, as compared to core loss before tax of $66.4 million, or $3.13 per
diluted common share, for the six months ended June 30, 2020.



Net loss for the three months ended June 30, 2021 decreased to $8.9 million as
compared to $22.8 million for the three months ended June 30, 2020.  The quarter
over quarter decrease in net loss was the result of a number of factors
including: the previously disclosed pause in lending as a result of the global
pandemic during 2020, which resulted in the Company booking a substantial loss
in the first and second quarters of 2020; the remarking of the NQM position as
well as mark-to-market decreases in fair value of our MSRs; and the significant
decline in interest rates.  Consequently, gain on sale of loans, net increased
$9.2 million to $10.7 million for the three months ended June 30, 2021 as
compared to a gain of $1.5 million during the same period in 2020.

The quarter over quarter reduction in net loss was also a result of a reduction
in other expense offset by an increase in operating expenses.  During the three
months ended June 30, 2021, other expense decreased primarily due to fair value
losses on our long-term debt in the second quarter of 2020, as a result of the
substantial decrease in forward LIBOR as well as a decrease in net interest
spread as a result of the decline interest rates.  Additionally, for the three
months ended June 30, 2021, operating expenses (personnel, business promotion
and general, administrative and other) increased to $19.6 million from $14.5
million for the same period in 2020, as a result of an increase personnel and
business promotion expense due to an increase in originations during the second
quarter of 2021 as compared to the second quarter of 2020.  Operating expenses
were lower during the second quarter of 2020 due to the temporary pause in
lending, which resulted in the furlough of certain employees and subsequent
reduction in headcount.



Non-GAAP Financial Measures
To supplement our consolidated financial statements, which are prepared and
presented in accordance with generally accepted accounting principles in the
United States (GAAP), we use the following non-GAAP financial measures: core
loss before tax and diluted core loss per share before tax.  Core loss and
diluted core loss per share are financial measurements calculated by adjusting
GAAP earnings before tax to exclude certain non-cash items, such as fair value
adjustments and mark-to-market of mortgage servicing rights (MSRs), and legacy
non-recurring expenses.  The fair value adjustments are non-cash items which
management believes should be excluded when discussing our ongoing and future
operations.  We use core loss as we believe that it more accurately reflects our
current business operations of mortgage originations and further aids our
investors in understanding and analyzing our core operating results and
comparing them among periods. These non-GAAP financial measures are not intended
to be considered in isolation or as a substitute for net loss before income
taxes, net loss or diluted loss per share (EPS) prepared in accordance with
GAAP.  The tables below provide a reconciliation of net loss before tax and
diluted loss per share to non-GAAP core loss before tax and per share non-GAAP
core loss before tax:

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                                           For the Three Months Ended             For the Six Months Ended
                                    June 30,       March 31,      June 30,       June 30,         June 30,
(in thousands, except per share
data)                                  2021           2021           2020           2021            2020
Net loss before tax:                $  (8,802)$      (702)    $ 

(22 814) (9 504 долл. США)(87 509 долларов США)


Change in fair value of mortgage
servicing rights                            11            (50)         7,200            (39)          22,494
Change in fair value of
long-term debt                         (1,417)         (1,025)         4,208         (2,442)         (4,828)
Change in fair value of net
trust assets, including trust
REO gains                                2,141           1,673           864           3,814           3,247
Legal settlements and
professional fees, for legacy
matters (1)                              1,000               -             -           1,000               -
Legacy corporate-owned life
insurance (2)                              160           (158)           176               2             176
Core loss before tax                $  (6,907)$      (262)$ (10,366)$    (7,169)$  (66,420)

Diluted weighted average common
shares                                  21,344          21,294        21,230          21,319          21,229
Diluted core loss per common        $                             $             $                $
share before tax                        (0.32)    $     (0.01)        (0.49)          (0.34)          (3.13)

Diluted loss per common share       $   (0.42)$     (0.03)$   (1.08)$     (0.45)$    (4.12)
Adjustments:
Change in fair value of mortgage
servicing rights                             -               -          0.34               -            1.06
Change in fair value of
long-term debt                          (0.07)          (0.05)          0.20          (0.11)          (0.23)
Change in fair value of net
trust assets, including trust
REO gains                                 0.11            0.08          0.04            0.17            0.15
Legal settlements and
professional fees, for legacy
matters                                   0.05               -             -            0.05               -
Legacy corporate-owned life
insurance                                 0.01          (0.01)          0.01               -            0.01
Diluted core loss per common        $                             $
share before tax                        (0.32)    $     (0.01)

(0,49) $ (0,34)$ (3,13)

(1) Общие, административные и прочие расходы включены в сопроводительные

консолидированный отчет о прибылях и убытках.

Суммы, включенные в состав прочих доходов, общих, административных и прочих расходов

и чистый процентный доход для сумм, связанных с выкупной стоимостью денежных средств (2) корпоративных трастов по страхованию жизни, премии, связанные с

корпоративное страхование жизни доверит обязательствам, а процентные расходы по

трасты по страхованию жизни, принадлежащие корпорациям, соответственно, в сопутствующих

    consolidated statements of operations and comprehensive loss.




Originations by Channel:




                                    For the Three Months Ended June 30,
                       June 30,       March 31,        %        June 30,        %
(in millions)            2021            2021        Change       2020        Change
Retail                $     514.2$      773.1      (33) %  $       1.9    26,963 %
Wholesale                    97.3            76.8        27              -       n/a
Correspondent                   -               -         -            0.2     (100)
Total originations    $     611.5$      849.9      (28) %  $       2.1    29,019 %






During the second quarter of 2021, total originations were $611.5 million as
compared to $849.9 million in the first quarter of 2021 and $2.1 million in the
second quarter of 2020.  The decrease in originations as compared to the first
quarter of 2021, was the result of our shift to focus on NonQM originations at
as a result of the increase in mortgage interest rates and margin compression
seen in conventional originations in the first quarter of 2021.  The increase in
originations as compared to the second quarter of 2020, was the result of our
temporary suspension of lending activities during 2020, due to uncertainty
caused by the COVID-19 pandemic. We continue to manage our headcount, pipeline
and capacity to balance the risks inherent in an aggregation execution model.



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Наши кредитные продукты в основном включают обычные ссуды, подлежащие продаже Fannie Mae и Freddie Mac, ипотечные ссуды без качества и ссуды, подлежащие государственному страхованию (государственные ссуды). Федеральное жилищное управление (FHA),
По делам ветеранов (VA) и Министерства сельского хозяйства США (USDA).



Originations by Loan Type:


                            For the Three Months Ended June 30,             For the Six Months Ended June 30,
(in millions)                 2021            2020         % Change          2021            2020       % Change
Conventional              $      500.1$     1.9        26,221 %    $    1,279.1$  1,223.1           5 %
NonQM                            100.6            0.2        50,200             115.3          261.8        (56)
Jumbo                              3.8              -           n/a              51.2              -         n/a
Government (1)                     7.0              -           n/a              15.8           33.5        (53)

Всего происхождений 611,5 долл. США2,1 доллара 29 019% $

1 461,4 1 518,4 долл. США (4)%

(3) Включает все ссуды, застрахованные государством, включая FHA, VA и USDA.





We continue to believe there is an underserved mortgage market for borrowers
with good credit who may not meet the qualified mortgage (QM) guidelines set out
by the Consumer Financial Protection Bureau.  During the first quarter of 2020,
prior to the disruption caused by the pandemic, we originated $261.6 million in
NonQM loans and were on pace to exceed our fourth quarter 2019 NonQM
originations.  As financial markets became dislocated in March 2020, spreads
widened substantially on credit assets due to potential COVID-19 pandemic
related payment delinquencies and forbearances, causing a severe decline in the
values assigned by investors and counterparties for NonQM assets. The
dislocation in the NonQM market diminished capital market distribution exits,
increased the cost and liquidity to finance the product and reduced the ability
to finance additional NonQM loans.  As a result, we paused NonQM originations in
April 2020.



The third quarter of 2020 saw the re-emergence of the NonQM market including
capital markets distribution exits for the product. We re-engaged lending in the
NonQM market during the fourth quarter of 2020, and have continued throughout
2021 rebuilding our third-party originator (TPO) NonQM origination team in
anticipation of increasing mortgage interest rates and declining conventional
margins in the second half of 2021. With the increase in mortgage interest rates
and margin compression seen in conventional originations in the first quarter of
2021, we accelerated our pivot to NonQM in both our TPO and Retail channels.
 During the three months ended June 30, 2021, NonQM originations increased to
$100.6 million, as compared to $14.7 million for the three months ended March
31, 2021 and $0.2 million for the three months ended June 30, 2020.



The re-emergence of the NonQM market has been defined by products that fit
within a much tighter credit box, which is where our NonQM originations have
been historically. In the second quarter of 2021, our NonQM originations had a
weighted average Fair Isaac Company credit score (FICO) of 752 and a weighted
average LTV ratio of 62%.  For the year ended December 31, 2020, our NonQM
originations had a weighted average FICO of 730 and a weighted average LTV
of
68%.



Originations by Purpose:


                                  For the Three Months Ended June 30,              For the Six Months Ended June 30,
(in millions)                     2021            %          2020       %          2021          %        2020        %
Refinance                     $      559.7         92 %    $    1.6     76 %   $    1,385.6       95 %  $ 1,403.0     92 %
Purchase                              51.8          8           0.5     24             75.8        5        115.4      8
Total originations            $      611.5        100 %    $    2.1    100 %   $    1,461.4      100 %  $ 1,518.4    100 %




During the second quarter of 2021, refinance volume increased to $559.7 million
as compared to $1.6 million in the second quarter of 2020. The increase in
originations was the result of our temporary suspension of lending activities
during the second quarter of 2020 due to the uncertainty caused by the pandemic.

Мы продолжаем управлять численностью персонала, конвейером и производственными мощностями, чтобы сбалансировать риски, присущие модели выполнения агрегирования.



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Mortgage Servicing Portfolio:


                                     June 30,       December 31,        %        June 30,        %
(Unpaid principal balance (UPB),
in millions)                           2021             2020          

Изменить 2020 Изменить портфель ипотечного обслуживания 48,6 долл. США 30,5 долл. США 59,2% 146,2 долл. США (67)%





The mortgage servicing portfolio increased to $48.6 million at June 30, 2021 as
compared to $30.5 million at December 31, 2020 and decreased from $146.2 million
at June 30, 2020.  The increase in the mortgage servicing portfolio at June 30,
2021 as compared to December 31, 2020, was in part due to our continued whole
loan sales on a servicing released basis to investors as well as selectively
retaining GNMA mortgage servicing. The decrease in the mortgage servicing
portfolio was primarily due to the sale of $4.2 billion in UPB of Freddie Mac
and GNMA MSRs in the second and third quarters of 2020. The servicing portfolio
generated net servicing expense of $150 thousand in the second quarter of 2021,
as compared to net servicing fees of $1.4 million in the second quarter of 2020,
as a result of the aforementioned servicing sales as well as a portfolio runoff
caused by the decrease in mortgage interest rates.  The sale of MSRs during
2020, have and will continue to result in net servicing expense going forward as
a result of a small balance servicing portfolio as well as interim servicing
costs.



The following table includes information about our mortgage servicing portfolio:


                               At June 30,        % 60+ days       At December 31,        % 60+ days
(in millions)                      2021         delinquent (1)          
2020           delinquent (1)
Ginnie Mae                    $         48.6              2.00 %  $             30.5              2.00 %
Freddie Mac                                -              0.00                     -              0.00
Fannie Mae                                 -              0.00                     -              0.00
Total servicing portfolio     $         48.6              2.00 %  $             30.5              2.00 %


(1) На основе количества ссуд.



For the second quarter of 2021, real estate services fees were $478 thousand as
compared to $210 thousand in the first quarter of 2021 and $293 thousand in the
second quarter of 2020.  The increase was primarily the result of an increase in
loss mitigation fees and real estate service fees.  Although the real estate
services fees, net increased as compared to the same period in 2020, the
majority of our real estate services business is generated from our long-term
mortgage portfolio, and as the long-term mortgage portfolio continues to
decline, we expect real estate services and the related revenues to decline.



In our long-term mortgage portfolio, the residual interests generated cash flows
of $663 thousand in the second quarter of 2021 as compared to $1.2 million in
the first quarter of 2021 and $489 thousand in the second quarter of 2020.  The
estimated fair value of the net residual interests decreased $727 thousand in
the second quarter of 2021 to $15.3 million at June 30, 2021, which was the
result of a decrease in fair value of certain trusts as a result of cash
received in excess of projections during the quarter and an increase in
prepayments on certain trust's loans which resulted in a reduction in future
residual cash flows.  Partially offsetting the decrease in net residual
interests was a decrease in forward LIBOR.



Для получения дополнительной информации о долгосрочном ипотечном портфеле см. Финансовое состояние и результаты операций ниже.

Ликвидность и капитальные ресурсы




During the six months ended June 30, 2021, we funded our operations primarily
from mortgage lending revenues and, to a lesser extent, real estate services
fees and cash flows from our residual interests in securitizations.  Mortgage
lending revenues include gain (loss) on sale of loans, net and other mortgage
related income.  We funded mortgage loan originations using warehouse
facilities, which are repaid once the loan is sold.  We may also seek to raise
capital by issuing debt or equity.



During the second quarter of 2021, we added a $25.0 million warehouse facility,
which will be operational for funding in the third quarter of 2021. Under the
terms of the warehouse lines, the Company is required to maintain various

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Оглавление

финансовые и другие ковенанты. В 30 июня 2021 г., Компания не соблюдала все финансовые условия своих кредиторов и получила необходимые отказы.




Our results of operations and liquidity are materially affected by conditions in
the markets for mortgages and mortgage-related assets, as well as the pandemic
and the broader financial markets and the general economy. Concerns over
economic recession, geopolitical issues, unemployment, the availability and cost
of financing, the mortgage market and real estate market conditions contribute
to increased volatility and diminished expectations for the economy and markets.
Volatility and uncertainty in the marketplace may make it more difficult for us
to obtain financing or raise capital on favorable terms or at all. We continue
to manage our headcount, pipeline, capacity and liquidity to balance the risks
inherent in an aggregation execution model. Our operations and profitability may
be adversely affected if we are unable to obtain cost-effective financing and
profitable and stable capital market distribution exits.



We originate loans eligible for sale to Fannie Mae, Freddie Mac, (together, the
GSEs), government insured or guaranteed loans, such as FHA, VA and USDA loans,
and loans eligible for Ginnie Mae securities issuance (collectively, the
Agencies), in addition to other investors and counterparties (collectively, the
Counterparties). It is important for us to sell or securitize the loans we
originate and, when doing so, maintain the option to also sell the related MSRs
associated with these loans.  Prepayment speeds on loans generated through our
retail direct channel have been a concern for some investors dating back to 2016
which has resulted and could further result in adverse pricing or delays in our
ability to sell or securitize loans and related MSRs on a timely and profitable
basis. During the fourth quarter of 2017, Fannie Mae sufficiently limited the
manner and volume for our deliveries of eligible loans such that we elected to
cease deliveries to them and we expanded our whole loan investor base for these
loans.  In 2019, with the creation of the uniform mortgage-backed securities
(UMBS) market, which was intended to improve liquidity and align prepayment
speeds across Fannie Mae and Freddie Mac securities, Freddie Mac raised concerns
about the high prepayment speeds of our loans generated through our retail
direct channel. During 2020, we further expanded our investor base and completed
servicing released loan sales to non-GSE whole loan investors and expect to
continue to utilize these alternative exit strategies for Fannie Mae and Freddie
Mac eligible loans.  In July 2020, we received notification from Freddie Mac
that our eligibility to sell whole loans to Freddie Mac was suspended, without
cause.  While we believe that the overall volume delivered under purchase
commitments to the GSE's was immaterial for 2019 and 2020, we are committed to
operating actively and in good standing with our broad range of capital markets
counterparties. We continue to take steps to manage our prepayment speeds to be
more consistent with our industry peers and to reestablish the full confidence
and delivery mechanisms to our investor base. We seek to satisfy the
requirements as outlined by Freddie Mac to achieve reinstatement, while we
continue to satisfy our obligations on a timely basis to our other
counterparties, as we have done without exception.  Despite being in a suspended
status with Freddie Mac, we remain in good standing as an approved originator
and/or seller/servicer with our GSE's, Agencies and Counterparties for agency,
non-agency, and government insured or guaranteed loan programs.



As discussed within Note 11.-Commitments and Contingencies in the Notes to
Unaudited Consolidated Financial Statements in  Item 1 of Part I of this
Quarterly Report on Form 10-Q, on July 15, 2021, the Maryland Court of Appeals
affirmed the decision of the Circuit Court (and the Court of Special Appeals) in
granting summary judgment in favor of the plaintiffs on the Preferred B voting
rights and, although the Court of Appeals found the voting rights provision to
be ambiguous, it concluded that the extrinsic evidence presented to the Circuit
Court, which it found to be undisputed, supported the plaintiffs' interpretation
that the voting rights provision required separate voting by the Preferred B
stockholders to amend the Preferred B Articles Supplementary. Accordingly, the
2009 amendments to the Preferred B Articles Supplementary were not validly
adopted and the 2004 Preferred Articles Supplementary remain in effect.



At June 30, 2021, the Company had $70.1 million in outstanding liquidation
preference of Series B and Series C Preferred Stock, inclusive of cumulative
undeclared dividends in arrears. The holders of each series of Preferred Stock,
which are non-voting and redeemable at the option of the Company, retain the
right to a $25.00 per share liquidation preference in the event of a liquidation
of the Company and the right to receive dividends on the Preferred Stock if
any
such dividends are declared.



As a result, as of June 30, 2021, the Company has cumulative undeclared
dividends in arrears of approximately $18.3 million, or approximately $27.54 per
outstanding share of Preferred B, thereby increasing the liquidation value to
approximately $52.54 per share. Additionally, every quarter the cumulative
undeclared dividends in arrears will increase by $0.5859 per Preferred B share,
or approximately $390 thousand.. The liquidation preference, inclusive of
Preferred B cumulative undeclared dividends in arrears, is only payable upon
voluntary or involuntary liquidation, dissolution or winding up of the Company's
affairs. In addition, once the Circuit Court lifts its stay, the Preferred
B
stock will return to

                                       39

  Table of Contents
being cumulative, the Company will be required to pay the three quarters of
dividends on the Preferred B stock under the 2004 Preferred B Articles
Supplementary (approximately $1.2 million, which had been previously accrued
for), and the Preferred B stockholders shall be entitled to call a special
meeting for the election of two additional directors. Once the stay is lifted,
cumulative preferred dividends, whether or not declared, are reflected in basic
and diluted earnings per share in accordance with AC 260-10-45-11, despite not
being accrued for on the consolidated balance sheets.

We believe that current cash balances, cash flows from our mortgage lending
operations, real estate services fees generated from our long-term mortgage
portfolio, availability on our warehouse lines of credit and residual interest
cash flows from our long-term mortgage portfolio are adequate for our current
operating needs based on the current operating environment. We believe the
mortgage and real estate services market is volatile, highly competitive and
subject to increased regulation. Competition in mortgage lending comes primarily
from mortgage bankers, commercial banks, credit unions and other finance
companies which operate in our market area as well as throughout the United
States. We compete for loans principally on the basis of the interest rates and
loan fees we charge, the types of loans we originate and the quality of services
we provide to borrowers, brokers and sellers.  Additionally, performance of the
long-term mortgage portfolio is subject to the current real estate market and
economic conditions. Cash flows from our residual interests in securitizations
are sensitive to delinquencies, defaults and credit losses associated with the
securitized loans. Losses in excess of current estimates will reduce the
residual interest cash receipts from our long-term mortgage portfolio.



While we continue to pay our obligations as they become due, the ability to
continue to meet our current and long-term obligations is dependent upon many
factors, particularly our ability to successfully operate our mortgage lending
and real estate services segment and realize cash flows from the long-term
mortgage portfolio. Our future financial performance and profitability are
dependent in large part upon the ability to expand our mortgage lending platform
successfully.


Критическая учетная политика


We define critical accounting policies as those that are important to the
portrayal of our financial condition and results of operations. Our critical
accounting policies require management to make difficult and complex judgments
that rely on estimates about the effect of matters that are inherently uncertain
due to the effect of changing market conditions and/or consumer behavior. In
determining which accounting policies meet this definition, we considered our
policies with respect to the valuation of our assets and liabilities and
estimates and assumptions used in determining those valuations. We believe the
most critical accounting issues that require the most complex and difficult
judgments and that are particularly susceptible to significant change to our
financial condition and results of operations include those issues included in
Management's Discussion and Analysis of Results of Operations in IMH's report on
Form 10-K for the year ended December 31, 2020.

                                       40

Оглавление

Финансовое состояние и результаты деятельности

Финансовое состояние

По состоянию на 30 июня 2021 г. по сравнению с 31 декабря 2020 г.

В следующей таблице представлены сокращенные консолидированные балансы за следующие периоды:





(in thousands, except per share
data)                                June 30,       December 31,           $           %
                                       2021             2020            Change       Change
             ASSETS
Cash                                $    50,194$        54,150$   (3,956)       (7) %
Restricted cash                           5,872              5,602            270         5
Mortgage loans held-for-sale            152,558            164,422       (11,864)       (7)
Mortgage servicing rights                   553                339            214        63
Securitized mortgage trust
assets                                1,862,595          2,103,269      (240,674)      (11)
Other assets                             38,579             41,524        (2,945)       (7)
Total assets                        $ 2,110,351$     2,369,306$ (258,955)      (11) %
      LIABILITIES & EQUITY
Warehouse borrowings                $   148,164$       151,932$   (3,768)       (2) %
Convertible notes                        20,000             20,000              -         -
Long-term debt (Par value;
$62,000)                                 44,900             44,413            487         1
Securitized mortgage trust
liabilities                           1,847,224          2,086,557      (239,333)      (11)
Repurchase reserve                        5,279              7,054        (1,775)      (25)
Other liabilities                        40,442             43,699        (3,257)       (7)
Total liabilities                     2,106,009          2,353,655      (247,646)      (11)
Total equity                              4,342             15,651       (11,309)      (72)
Total liabilities and
stockholders' equity                $ 2,110,351$     2,369,306$ (258,955)      (11) %

Book and tangible book value per
share                               $      0.20    $          0.74    $    (0.53)      (72) %





В 30 июня 2021 г., денежные средства уменьшились 4,0 миллиона долларов к 50,2 млн. Долл. США из
54,2 млн. Долл. США в 31 декабря 2020 г.. Остатки денежных средств уменьшились в основном за счет оплаты операционных расходов.

LHFS decreased $11.8 million to $152.6 million at June 30, 2021 as compared to
$164.4 million at December 31, 2020.  During the six months ended June 30, 2021,
we had originations of $1.5 billion offset by $1.5 billion in loan sales. As a
normal course of our origination and sales cycle, loans held-for-sale at the end
of any period are generally sold within one or two subsequent months.



Mortgage servicing rights increased to $553 thousand at June 30, 2021 as
compared to $339 thousand at December 31, 2020. The increase was due to
additions of $213 thousand from servicing retained loan sales of $19.8 million
in UPB as well as mark-to-market increases in fair value of $1 thousand.  At
June 30, 2021 and December 31, 2020, we serviced $48.6 million and $30.5
million, respectively, in UPB for others.



Warehouse borrowings decreased $3.7 million to $148.2 million at June 30, 2021
as compared to $151.9 million at December 31, 2020. The decreased was due to an
$11.8 million decreased in LHFS at June 30, 2021. As of June 30, 2021, our
warehouse lending capacity remains at $550.0 million spread amongst three
warehouse counterparties.



Repurchase reserve decreased $1.8 million to $5.3 million at June 30, 2021 as
compared to $7.1 million at December 31, 2020.  The decrease was due to an $212
thousand reversal of provision for repurchases as a result of a decrease in
expected early payoffs and future losses as well as $1.6 million in settlements
primarily related to repurchased loans as well as refunds of premiums to
investors for early payoffs on loans sold.

                                       41

  Table of Contents


Book value per share decreased 72%, or $0.53, to $0.20 at June 30, 2021 as
compared to $0.74 at December 31, 2020. Book value per common share decreased
31% to ($2.22) as of June 30, 2021, as compared to ($1.70) as of
December 31, 2020 (inclusive of the remaining $51.8 million of liquidation
preference on our preferred stock).  Inclusive of the Preferred B stock
cumulative undeclared dividends in arrears of $18.3 million (as discussed
further in Note 11 - Commitments and Contingencies of the "Notes to Unaudited
Consolidated Financial Statements"), book value per common share was ($3.08) at
June 30, 2021.



The changes in in our trust assets and trust liabilities as summarized below.


                                          June 30,      December 31,         $          %
                                            2021            2020          Change      Change
Securitized mortgage collateral          $ 1,858,423$   2,100,175$ (241,752)     (12) %
Real estate owned (REO)                        4,172            3,094         1,078       35
Total trust assets (1)                     1,862,595        2,103,269     (240,674)     (11)

Секьюритизированные ипотечные займы 1 847 224 долл. США2 086 557 долл. США(239 333 долл. США) (11)% Итого доверительные обязательства (1)

                1,847,224        2,086,557     

(239 333) (11) Остаточные доли участия в секьюритизации 15 371 долл. США16 712 долл. США(1341 долл. США) (8)%

В 30 июня 2021 г., UPB трастовых активов и трастовых обязательств составлял (1) приблизительно 2,1 миллиарда долларов и 2,0 миллиарда долларов, соответственно. В

    December 31, 2020, the UPB of trust assets and trust liabilities was
    approximately $2.5 billion and $2.4 billion, respectively.



We receive cash flows from our residual interests in securitizations to the
extent they are available after required distributions to bondholders and
maintaining specified overcollateralization levels and other specified
parameters (such as maximum delinquency and cumulative default) within the
trusts. The estimated fair value of the residual interests, represented by the
difference in the fair value of total trust assets and total trust liabilities,
was $15.4 million at June 30, 2021 as compared to $16.7 million at
December 31, 2020.

We updated our collateral assumptions quarterly based on recent delinquency,
default, prepayment and loss experience. Additionally, we updated the forward
interest rates and investor yield (discount rate) assumptions based on
information derived from market participants. During the six months ended
June 30, 2021, actual losses declined slightly as compared to forecasted losses
for the majority of trusts, including those with residual value.  Principal
payments, prepayments and liquidations of securitized mortgage collateral and
securitized mortgage borrowings also contributed to the reduction in trust
assets and liabilities.  The decrease in residual fair value at June 30, 2021
was the result of a decrease in fair value of certain trusts as a result of cash
received in excess of projections during the quarter and an increase in
prepayments on certain trusts which resulted in a reduction in future residual
cashflows. Partially offsetting the decrease in net residual interests was
a
decrease in forward LIBOR.


Оценочная справедливая стоимость секьюритизированного ипотечного обеспечения уменьшилась

241,8 млн. Долл. США в течение шести месяцев, закончившихся 30 июня 2021 г., в первую очередь из-за

уменьшение суммы основного долга по платежам заемщикам и переводам займов в REO

? для односемейного и многосемейного залога. Кроме того, другие трастовые активы

выросла 1,1 миллиона долларов в течение шести месяцев, закончившихся 30 июня 2021 г., в первую очередь из-за

к 3,9 миллиона долларов в РЭО от выкупа, а также 1,6 миллиона долларов увеличить в

чистая цена продажи (NRV) REO. Частично компенсация увеличения была

уменьшение РЭО от ликвидации 4,4 миллиона долларов.

Оценочная справедливая стоимость секьюритизированных ипотечных кредитов уменьшилась.

? 239,3 млн. Долл. США в течение шести месяцев, закончившихся 30 июня 2021 г., в первую очередь из-за

уменьшение основного остатка от основных платежей в течение периода для

   single-family and multi-family.




To estimate fair value of the assets and liabilities within the securitization
trusts each reporting period, management uses an industry standard valuation and
analytical model that is updated monthly with current collateral, real estate,
derivative, bond and cost (servicer, trustee, etc.) information for each
securitization trust. We employ an internal process to validate the accuracy of
the model as well as the data within this model. We use the valuation model to
generate the expected cash flows to be collected from the trust assets and the
expected required bondholder distribution (trust

                                       42

Оглавление

пассивы). В той степени, в которой трасты имеют избыточное обеспечение, мы можем получить избыточную долю в качестве держателя остаточной доли участия. Приведенная выше информация предоставляет нам ожидаемые в будущем потоки денежных средств по секьюритизированному ипотечному обеспечению, недвижимому имуществу, секьюритизированным ипотечным займам и остаточным процентам.




To determine the discount rates to apply to these cash flows, we gather
information from the bond pricing services and other market participants
regarding estimated investor required yields for each bond tranche. Based on
that information and the collateral type and vintage, we determine an acceptable
range of expected yields an investor would require including an appropriate risk
premium for each bond tranche. We use the blended yield of the bond tranches
together with the residual interests to determine an appropriate yield for the
securitized mortgage collateral in each securitization.



В следующей таблице представлены изменения в трастовых активах и трастовых обязательствах за шесть месяцев, закончившихся. 30 июня 2021 г.:




                                                                          TRUST ASSETS                           TRUST LIABILITIES
                                                        Level 3 Recurring Fair
                                                          Value Measurement                                    Level 3 Recurring Fair
                                                                                     NRV                         Value Measurement
                                                             Securitized            Real                            Securitized              Net
                                                               mortgage            estate     Total trust             mortgage              trust
                                                              collateral            owned        assets              borrowings             assets
Recorded fair value at December 31, 2020               $              2,100,175    $ 3,094$  2,103,269    $            (2,086,557)    $   

16 712

Total gains/(losses) included in earnings:
Interest income                                                         (9,479)          -         (9,479)                           -       (9,479)
Interest expense                                                              -          -               -                    (18,018)      (18,018)
Change in FV of net trust assets, excluding REO (1)                      79,857          -          79,857                    (85,230)       (5,373)
Gains from REO - not at FV but at NRV (2)                                     -      1,559           1,559                           -         1,559
Total gains (losses) included in earnings                                70,378      1,559          71,937                   (103,248)      (31,311)
Transfers in and/or out of level 3                                            -          -               -                           -             -
Purchases, issuances and settlements                                  (312,130)      (481)       (312,611)                     342,581        

29 970

Recorded fair value at June 30, 2021                   $              1,858,423    $ 4,172$  1,862,595    $            (1,847,224)    $   

15 371

Представляет собой изменение справедливой стоимости чистых трастовых активов, включая прибыль от траста REO (1) в консолидированном отчете о прибылях и убытках и совокупный убыток за

шесть месяцев закончились 30 июня 2021 г..

(2) Учитываются по чистой цене продажи.

Inclusive of gains from REO, total trust assets above reflect a net gain of
$81.4 million as a result of an increase in fair value from securitized mortgage
collateral of $79.9 million and gains from REO of $1.6 million. Net losses on
trust liabilities were $85.2 million as a result of the increase in fair value
of securitized mortgage borrowings. As a result, other income-change in fair
value of net trust assets, including trust REO gains decreased by $3.8 million
for the six months ended June 30, 2021.

В таблице ниже отражены чистые трастовые активы как процент от общих трастовых активов (остаточные доли участия в секьюритизации):


                                                           June 30,       December 31,
                                                             2021             2020
Net trust assets                                          $    15,371$      16,712
Total trust assets                                          1,862,595         2,103,269
Net trust assets as a percentage of total trust assets           0.83 %    
       0.79  %



За шесть месяцев закончились 30 июня 2021 г., расчетная справедливая стоимость чистых трастовых активов немного увеличилась как процент от общих трастовых активов из-за увеличения предоплаты и допущений о предоплате.


Since the consolidated and unconsolidated securitization trusts are nonrecourse
to us, our economic risk is limited to our residual interests in these
securitization trusts. Therefore, in the following table we have netted trust
assets and trust liabilities to present these residual interests more simply.
Our residual interests in securitizations are segregated between

                                       43

Оглавление

наши односемейные (SF) жилые и многосемейные (MF) жилые портфели и представлены разницей между трастовыми активами и трастовыми обязательствами.


The following tables present the estimated fair value of our residual interests,
by securitization vintage year, and other related assumptions used to derive
these values at June 30, 2021 and December 31, 2020:


                                    Estimated Fair Value of Residual           Estimated Fair Value of Residual
                                      Interests by Vintage Year at               Interests by Vintage Year at
                                              June 30, 2021                            December 31, 2020
      Origination Year               SF              MF          Total          SF              MF          Total
        2002-2003 (1)            $     8,933$      598$  9,531$     8,575$      524$  9,099
            2004                       2,561            724        3,285          2,654            775        3,429
            2005                         180             90          270             58             68          126
            2006                           -          2,285        2,285              -          4,058        4,058
            Total                $    11,674$    3,697$ 15,371$    11,287$    5,425$ 16,712
Weighted avg. prepayment rate           10.6 %         13.9 %       10.8 %         10.1 %         13.3 %       10.3 %
Weighted avg. discount rate             17.3 %         16.9 %       17.3 % 

17,4% 18,0% 17,6%

2002-2003 год включает CMO 2007-A, поскольку большинство (1) ипотечных кредитов, обеспеченных в рамках этой секьюритизации, были созданы во время этого

период.



We utilize a number of assumptions to value securitized mortgage collateral,
securitized mortgage borrowings and residual interests. These assumptions
include estimated collateral default rates and loss severities (credit losses),
collateral prepayment rates, forward interest rates and investor yields
(discount rates). We use the same collateral assumptions for securitized
mortgage collateral and securitized mortgage borrowings as the collateral
assumptions determine collateral cash flows which are used to pay interest and
principal for securitized mortgage borrowings and excess spread, if any, to the
residual interests. However, we use different investor yield (discount rate)
assumptions for securitized mortgage collateral and securitized mortgage
borrowings and the discount rate used for residual interests based on underlying
collateral characteristics, vintage year, assumed risk and market participant
assumptions.

The table below reflects the estimated future credit losses and investor yield
requirements for trust assets by product (SF and MF) and securitization vintage
at June 30, 2021:


               Estimated Future          Investor Yield
                  Losses (1)             Requirement (2)
               SF            MF          SF          MF
2002-2003         8 %           * % (3)     5 %        10 %
2004             11             7           4           4
2005             15             4           1           3
2006             10             *  (3)      3           5
2007             16             *  (3)      3           2

(1) Расчетные будущие убытки, полученные путем деления будущих прогнозируемых убытков UPB на

30 июня 2021 г..

Требования к доходности инвесторов представляют собой нашу оценку доходности, которую сторонние (2) участники рынка потребуют для определения стоимости наших трастовых активов и обязательств.

с учетом наших предположений о предоплате, кредитных убытках и форвардных процентных ставках.



(3) Represents less than 1%.




Кредитное качество долгосрочного ипотечного портфеля

We use the Mortgage Bankers Association (MBA) method to define delinquency as a
contractually required payment being 30 or more days past due. We measure
delinquencies from the date of the last payment due date in which a payment was
received. Delinquencies for loans 60 days delinquent or greater, foreclosures
and delinquent bankruptcies were $389.1 million, or 18.4%, of the long-term
mortgage portfolio, at June 30, 2021 as compared to $514.0 million or 20.9%
at
December 31, 2020.

                                       44

  Table of Contents

The following table summarizes the gross UPB of loans in our mortgage portfolio,
included in securitized mortgage collateral and REO, that were 60 or more days
delinquent (utilizing the MBA method) as of the periods indicated:




                                      June 30,        Total        December 31,        Total
Securitized mortgage collateral         2021        Collateral         2020
         Collateral
60 - 89 days delinquent              $    22,158           1.1 %  $        47,483           1.9 %
90 or more days delinquent               175,621           8.3            290,621          11.8
Foreclosures (1)                         146,421           6.9            126,802           5.2
Delinquent bankruptcies (2)               44,933           2.1             49,069           2.0
Total 60 or more days delinquent     $   389,133          18.4 %  $       513,975          20.9 %
Total collateral                     $ 2,118,551         100.0 %  $     2,454,657         100.0 %

(1) Представляет собственность в процессе обращения взыскания.

(2) Представляет собой банкротство с просрочкой платежа в течение 30 или более дней.

В 30 июня 2021 г., ипотечные кредиты с просрочкой на 60 и более дней (независимо от того, подлежат ли отсрочки платежа) уменьшились на 24% по сравнению с 31 декабря 2020 г..

Просрочка и воздержание учитываются как часть наших допущений о кредитных убытках при определении оценочной справедливой стоимости наших остаточных долей участия.

 At June 30, 2021, residential loss assumptions for certain trusts decreased as
compared to December 31, 2020.  To the extent delinquencies and loans in
forbearance increase in deals with residual fair value, the estimated fair value
of our residual interests may decrease due to a reduction or delay in the timing
of estimated cash flows.

The following table summarizes the gross securitized mortgage collateral and REO
at NRV, that were non-performing as of the dates indicated (excludes 60-89
days
delinquent):


                                                      Total                            Total
                                      June 30,      Collateral     December 31,      Collateral
                                        2021            %              2020              %
90 or more days delinquent
(including forbearances),
foreclosures and
delinquent bankruptcies              $   366,975          17.3 %  $       466,492          19.0 %
Real estate owned inside and
outside trusts                             4,251           0.2              3,173           0.1

Итого неработающие активы 371 226 долларов США 17,5% 469 665 долларов США 19,1%





Non-performing assets consist of non-performing loans (mortgages that are 90 or
more days delinquent, including loans in foreclosure and delinquent bankruptcies
plus REO). It is our policy to place a mortgage on nonaccrual status when it
becomes 90 days delinquent and to reverse from revenue any accrued interest,
except for interest income on securitized mortgage collateral when the scheduled
payment is received from the servicer. The servicers are required to advance
principal and interest on loans within the securitization trusts to the extent
the advances are considered recoverable. IFC, a subsidiary of IMH and master
servicer, may be required to advance funds, or in most cases cause the loan
servicers to advance funds, to cover principal and interest payments not
received from borrowers depending on the status of their mortgages.  As of
June 30, 2021, non-performing assets as a percentage of the total collateral was
17.5%. At December 31, 2020, non-performing assets to total collateral was
19.1%. Non-performing assets decreased by approximately $98.4 million at
June 30, 2021 as compared to December 31, 2020. At June 30, 2021, the estimated
fair value of non-performing assets was $109.9 million, or 5.2% of total assets.
At December 31, 2020, the estimated fair value of non-performing assets was
$135.0 million, or 5.7% of total assets.

REO, which consists of residential real estate acquired in satisfaction of
loans, is carried at the lower of cost or net realizable value less estimated
selling costs. Adjustments to the loan carrying value required at the time of
foreclosure are included in the change in the fair value of net trust assets.
Changes in our estimates of net realizable value subsequent

                                       45

Оглавление

до момента обращения взыскания и до момента окончательного отчуждения отражаются как изменение справедливой стоимости чистых трастовых активов, включая доходы (убытки) от трастовых REO в консолидированном отчете о прибылях и убытках.

For the three and six months ended June 30, 2021, we recorded a decrease of $313
thousand and an increase of $1.6 million in net realizable value of REO,
respectively, compared to an increase of $1.5 million and $3.2 million for the
comparable 2020 periods.  Increases and decrease of the net realizable value
reflect the change in value of the REO subsequent to foreclosure date, but prior
to the date of sale.

В следующей таблице представлены остатки REO:


                      June 30,       December 31,
                         2021            2020
REO                   $    9,580$        10,140
Impairment (1)           (5,408)            (6,967)
Ending balance        $    4,172    $         3,173
REO inside trusts     $    4,172    $         3,094
REO outside trusts            79                 79
Total                 $    4,251    $         3,173

(1) Обесценение представляет собой совокупное списание чистой стоимости реализации.

    subsequent to foreclosure.




In calculating the cash flows to assess the fair value of the securitized
mortgage collateral, we estimate the future losses embedded in our loan
portfolio. In evaluating the adequacy of these losses, management takes many
factors into consideration. For instance, a detailed analysis of historical loan
performance data is accumulated and reviewed. This data is analyzed for loss
performance and prepayment performance by product type, origination year and
securitization issuance. The data is also broken down by collection status. Our
estimate of losses for these loans is developed by estimating both the rate of
default of the loans and the amount of loss severity in the event of default.
The rate of default is assigned to the loans based on their attributes (e.g.,
original loan-to-value, borrower credit score, documentation type, geographic
location, etc.) and collection status. The rate of default is based on analysis
of migration of loans from each aging category. The loss severity is determined
by estimating the net proceeds from the ultimate sale of the foreclosed
property. The results of that analysis are then applied to the current mortgage
portfolio and an estimate is created. We believe that pooling of mortgages with
similar characteristics is an appropriate methodology in which to evaluate
the
future loan losses.


Management recognizes that there are qualitative factors that must be taken into
consideration when evaluating and measuring losses in the loan portfolios. These
items include, but are not limited to, economic indicators that may affect the
borrower's ability to pay, changes in value of collateral, political factors,
employment and market conditions, competitor's performance, market perception,
historical losses, and industry statistics. The assessment for losses is based
on delinquency trends and prior loss experience and management's judgment and
assumptions regarding various matters, including general economic conditions and
loan portfolio composition. Management continually evaluates these assumptions
and various relevant factors affecting credit quality and inherent losses.


                                       46

  Table of Contents

Results of Operations

For the Three Months Ended June 30, 2021 compared to the Three Months Ended
June 30, 2020


                                                  For the Three Months Ended June 30,
                                                                             $          %
                                                2021          2020        Change      Change
Revenues (losses)                            $   10,980$  (4,058)$  15,038       371 %
Expenses                                       (19,616)      (14,465)      (5,151)      (36)
Net interest income                                 558           781        (223)      (29)
Change in fair value of long-term debt            1,417       (4,208)        5,625       134
Change in fair value of net trust
assets, including trust REO gains
(losses)                                        (2,141)         (864)      (1,277)     (148)
Income tax expense                                 (62)          (15)         (47)     (313)
Net loss                                     $  (8,864)$ (22,829)$  13,965        61 %
Loss per share available to common
stockholders-basic                           $   (0.42)$   (1.08)$    0.66        61 %
Loss per share available to common
stockholders-diluted                         $   (0.42)$   (1.08)$    0.66        61 %




For the Six Months Ended June 30, 2021 compared to the Six Months Ended
June 30, 2020


                                                    For the Six Months Ended June 30,
                                                                              $          %
                                                 2021          2020        Change      Change
Revenues (losses)                             $   31,564$ (47,567)$  79,131       166 %
Expenses                                        (40,914)      (45,232)        4,318        10
Net interest income                                1,218         3,709      (2,491)      (67)
Change in fair value of long-term debt             2,442         4,828      (2,386)      (49)
Change in fair value of net trust
assets, including trust REO losses               (3,814)       (3,247)     
  (567)      (17)
Income tax expense                                  (43)          (51)            8        16
Net loss                                      $  (9,547)$ (87,560)$  78,013        89 %
Loss per share available to common
stockholders-basic                            $   (0.45)$   (4.12)$    3.67        89 %
Loss per share available to common
stockholders-diluted                          $   (0.45)$   (4.12)$    3.67        89 %





Revenues

For the Three Months Ended June 30, 2021 compared to the Three Months Ended
June 30, 2020


                                              For the Three Months Ended June 30,
                                                                        $          %
                                            2021         2020        Change      Change
Gain on sale of loans, net                $  10,693$   1,451$   9,242       637 %
Servicing (expense) fees, net                 (150)        1,352      (1,502)     (111)
Real estate services fees, net                  478          293          185        63
Loss on mortgage servicing rights, net         (37)      (8,443)        8,406       100
Other (expenses) revenues                       (4)        1,289      (1,293)     (100)
Total revenues (expenses)                 $  10,980$ (4,058)$  15,038       371 %




Gain on sale of loans, net.  For the three months ended June 30, 2021, gain on
sale of loans, net was a gain of $10.7 million compared to $ 1.5 million in the
comparable 2020 period. The increase in gain on sale of loans, net was most

                                       47

Оглавление

notably due to a $39.7 million increase in gain on sale of loans and a $28
thousand in premiums from servicing retained loan sales.  Partially offsetting
the increase in gain on sale of loans, net was a $22.0 million decrease in
mark-to-market gains on LHFS, a $4.0 million decrease in realized and unrealized
net losses on derivative financial instruments, a $3.5 million increase in
direct origination expenses and an increase in provision for repurchases of $976
thousand.

As previously discussed, for the three months ended June 30, 2021, the increase
in gain on sale of loans, net was the result of our temporary suspension of
lending activities during the second quarter of 2020 due to the uncertainty
caused by the pandemic.  For the three months ended June 30, 2021, we originated
and sold $611.5 million and $665.4 million, respectively, as compared to $2.1
million and $489.1 million of loans originated and sold, respectively, during
the same period in 2020.  During the second quarter of 2021, margins were 175
bps as compared to 237 bps for the first quarter of 2021.  Margins for the
second quarter of 2020 are not meaningful due to the aforementioned temporary
suspension of lending activities.



Servicing (expenses) fees, net.  For the three months ended June 30, 2021,
servicing (expenses) fees, net were an expense of $150 thousand compared to
income of $1.4 million in the comparable 2020 period.  The decrease in servicing
(expense) fees, net was the result of the sale of $4.2 billion in UPB of Freddie
Mac and GNMA MSRs in the second and third quarters of 2020 as well as runoff of
our mortgage servicing portfolio due to the substantial decrease in mortgage
interest rates during the second quarter of 2020.  The increase in runoff of our
mortgage servicing portfolio which combined with the servicing sales in 2020
decreased the servicing portfolio average balance 97% to $45.7 million for the
three months ended June 30, 2021 as compared to an average balance of $1.6
billion for the comparable period in 2020.  As a result of the servicing sales
in 2020, we will continue to see a reduction in servicing fees, net and
recognize a servicing expense related to interim subservicing and other
servicing costs related to the small UPB of remaining servicing portfolio.

За истекшие три месяца 30 июня 2021 г., у нас были 9,4 млн. Долл. США в обслуживании продаж нераспределенной ссуды.

Убыток по правам по ипотечному обслуживанию, нетто




                                                     For the Three Months Ended June 30,
                                                                                $          %
                                                 2021            2020         Change     Change
Loss on sale of mortgage servicing rights      $       -     $    (5,332)$  5,332       n/a %
Changes in fair value:
Due to changes in valuation market rates,
inputs or assumptions                               (11)          (1,868)       1,857        99
Other changes in fair value:
Scheduled principal prepayments                     (13)            (104)  
       91        88
Voluntary prepayments                               (13)          (1,139)       1,126        99
Total changes in fair value                    $    (37)$    (3,111)$  3,074        99

Убыток по правам по ипотечному обслуживанию, нетто $ (37)(8 443 долл. США)

 $  8,406       100 %




For the three months ended June 30, 2021, loss on MSRs, net was $37 thousand
compared to a loss of $8.4 million in the comparable 2020 period.  The decrease
in loss on mortgage servicing rights, net was the result of the aforementioned
decrease in the size of the mortgage servicing portfolio as compared to the
second quarter of 2020.  For the three months ended June 30, 2021, we recorded a
$37 thousand loss from a change in fair value of MSRs primarily due to scheduled
and voluntary prepayments.  For the three months ended June 30, 2020, we
recorded a $3.1 million loss from a change in fair value of MSRs primarily due
to changes in fair value associated with changes in market rates, inputs and
assumptions as well as voluntary and scheduled prepayments.  As a result of the
aforementioned decrease in interest rates during 2020 and through the second
quarter of 2020, $3.0 million of the $3.1 million change in fair value of MSRs
was due to prepayments, with $1.9 million primarily due to an increase in
prepayment speed assumptions and $1.1 million due to voluntary prepayments.



Real estate services fees, net.  For the three months ended June 30, 2021, real
estate services fees, net were $478 thousand as compared to $293 thousand in the
comparable 2020 period. The $185 thousand increase was primarily the

                                       48

Оглавление


result of an increase in loss mitigation fees related to transactions associated
with the long-term mortgage portfolio, which will decline over time as a result
of the decline in the number of loans and the UPB of the long-term mortgage
portfolio.



Other (expenses) revenues. For the three months ended June 30, 2021, other
revenues were an expense of $4 thousand as compared to revenues of $1.3 million
in the comparable 2020 period. The $1.3 million decrease was the result of an
increase in the cash surrender value the corporate-owned life insurance trusts
during the second quarter of 2020, as a result of the payment of premiums.



For the Six Months Ended June 30, 2021 compared to the Six Months Ended
June 30, 2020






                                              For the Six Months Ended June 30,
                                                                       $           %
                                          2021          2020        Change      Change

Прибыль (убыток) от продажи кредитов, нетто 30 824 долл. США(26 712 долларов США)57 536 долларов США 215% Комиссия за обслуживание (расходы), нетто

              (269)         3,859      (4,128)      (107)
Real estate services fees, net                688           687            1          0
Gain (loss) on mortgage servicing
rights, net                                     1      (26,753)       26,754        100
Other revenues                                320         1,352      (1,032)       (76)
Total revenues (expenses)               $  31,564$ (47,567)$  79,131        166 %





Gain (loss) on sale of loans, net.  For the six months ended June 30, 2021, gain
(loss) on sale of loans, net was a gain of $30.8 million compared to a loss of
$(26.7) million in the comparable 2020 period. The increase in gain on sale of
loans, net was most notably due to a $22.6 million increase in mark-to-market
gains on LHFS, a $16.2 million decrease in realized and unrealized net losses on
derivative financial instruments, a $13.5 million increase in gain on sale of
loans, a $5.2 million decrease in provision for repurchases and a $1.6 million
decrease in direct origination expenses.  Partially offsetting the increase in
gain on sale of loans, net a $1.5 million decrease in premiums from servicing
retained loan sales.

As previously discussed, for the six months ended June 30, 2020, the substantial
remarking of our NonQM loan portfolio held-for-sale as a result of spreads
widening substantially on credit assets due to potential pandemic related
payment delinquencies and forbearances, causing a severe decline in the values
assigned by counterparties for NonQM assets, which resulted in a significant
loss on sale of loans, net.  For the six months ended June 30, 2021, we
originated and sold $1.5 billion of mortgage loans, respectively, as compared to
$1.5 billion and $2.2 billion of loans originated and sold, respectively, during
the same period in 2020.  During the six months ended June 30, 2021, margins
were 211 bps as compared to the negative margins during the same period in 2020
resulting in the aforementioned loss on sale of loans.

Servicing (expenses) fees, net.  For the six months ended June 30, 2021,
servicing (expenses) fees, net were an expense of $269 thousand compared to
income of $3.9 million in the comparable 2020 period.  The decrease in servicing
fees, net was the result of the sale of $4.2 billion in UPB of Freddie Mac and
GNMA MSRs in the second and third quarters of 2020.  In addition, the
substantial decrease in mortgage interest rates during 2020 caused a significant
increase in runoff of our mortgage servicing portfolio which combined with the
servicing sales decreased the servicing portfolio average balance 99% to $41.8
million for the six months ended June 30, 2021 as compared to an average balance
of $3.2 billion for the comparable period in 2020.  As a result of the servicing
sales in 2020, we will continue to see a reduction in servicing fees, net and
recognize a servicing expense related to interim subservicing and other
servicing costs related to the small UPB of remaining servicing portfolio.

За истекшие шесть месяцев 30 июня 2021 г., у нас были 19,8 млн. Долл. США в обслуживании продаж нераспределенной ссуды.



                                       49

  Table of Contents

Убыток по правам по ипотечному обслуживанию, нетто


                                                    For the Six Months Ended June 30,
                                                                             $          %
                                                 2021          2020        Change     Change
Loss on sale of mortgage servicing rights      $       -    $  (4,811)$  4,811       100 %
Changes in fair value:
Due to changes in valuation market rates,
inputs or assumptions                                 39      (17,683)      17,722       100
Other changes in fair value:
Scheduled principal prepayments                     (25)         (497)     
   472        95
Voluntary prepayments                               (13)       (3,762)       3,749       100
Total changes in fair value                    $       1$ (21,942)$ 21,943       100

Gain (loss) on mortgage servicing rights,
net                                            $       1$ (26,753)$ 26,754       100 %




For the six months ended June 30, 2021, gain (loss) on MSRs, net was $1 thousand
compared to a loss of $26.8 million in the comparable 2020 period.  For the six
months ended June 30, 2021, we recorded a $39 thousand gain from a change in
fair value of MSRs primarily due to changes in fair value associated with
changes in market rates, inputs and assumptions partially offset by scheduled
and voluntary prepayments.  For the six months ended June 30, 2020, we recorded
a $21.9 million loss from a change in fair value of MSRs primarily due to
changes in fair value associated with changes in market rates, inputs and
assumptions as well as voluntary and scheduled prepayments.  As a result of the
aforementioned decrease in interest rates during 2020, $21.4 million of the
$21.9 million change in fair value of MSRs was due to prepayments, with $17.7
million primarily due to an increase in prepayment speed assumptions and $3.7
million due to voluntary prepayments.



Real estate services fees, net.  For the six months ended June 30, 2021, real
estate services fees, net were $688 thousand as compared to $687 thousand in the
comparable 2020 period. The real estate service fees were flat for the six
months ended June 30, 2021 as compared to the same period in 2020, and will
decline over time as a result of a decrease in transactions related to the
decline in the number of loans and the UPB of the long-term mortgage portfolio.



Other revenues. For the six months ended June 30, 2021, other revenues were $320
thousand as compared to $1.4 million in the comparable 2020 period. The $1.0
million decrease was the result of an increase in the cash surrender value the
corporate-owned life insurance trusts during the second quarter of 2020, as a
result of the payment of premiums.



Затраты


For the Three Months Ended June 30, 2021 compared to the Three Months Ended
June 30, 2020


                                         For the Three Months Ended June 30,
                                                                    $         %
                                        2021          2020       Change     Change
Personnel expense                    $   11,964$   7,774$ 4,190        54 %
General, administrative and other         5,882         6,617      (735)   
  (11)
Business promotion                        1,770            74      1,696      2292
Total expenses                       $   19,616$  14,465$ 5,151        36 %



Total expenses increased by $5.1 million, or 36%, to $19.6 million for the three
months ended June 30, 2021, compared to $14.5 million for the comparable period
in 2020.  Personnel expense increased $4.2 million to $12.0 million for the
three months ended June 30, 2021 as compared to the same period in 2020.  The
increase is related to an increase in originations during the second quarter of
2021 as well as the temporary pause in lending during 2020, which resulted in
the furlough of certain employees and subsequent reduction in headcount.
 Although we continue to manage our headcount, pipeline and capacity to balance
the risks inherent in an aggregation execution model, average headcount
increased 75% for the three months ended June 30, 2021 as compared to the same
period in 2020. In addition to the aforementioned

                                       50

Оглавление


increases in personnel expense, the increase is also the result of an industry
wide escalation in the cost of production and operation talent, as well as the
continued rebuild of our NonQM platform, which began in the fourth quarter
of
2020.



General, administrative and other expenses decreased to $5.9 million for the
three months ended June 30, 2021, compared to $6.6 million for the same period
in 2020.  The decrease in general, administrative and other expenses was
primarily due to a $1.4 million decrease in premiums associated with the
corporate-owned life insurance trusts liability and a $73 thousand decrease in
other various general and administrative expenses.   Partially offsetting the
decrease in general, administrative and other expenses was a $485 thousand
increase in legal and professional fees as well as a $214 thousand increase
in
insurance expense.



Business promotion expense increased $1.7 million to $1.8 million for the three
months ended June 30, 2021 as compared to $74 thousand for the same period in
the prior year.  The increase is business promotion is partially related to an
increase in originations during the second quarter of 2021 as compared to the
second quarter of 2020, due to the temporary pause in lending during 2020.
 During the second quarter of 2021, we increased business promotion to maintain
our lead volume as well as we began targeting NonQM production in the retail
channel. Although we continue to source leads through digital campaigns, which
allows for a more cost effective approach, the competitiveness within the
California market has driven up advertising costs.



For the Six Months Ended June 30, 2021 compared to the Six Months Ended
June 30, 2020




                                         For the Six Months Ended June 30,
                                                                 $          %
                                       2021        2020       Change      Change
Personnel expense                    $ 26,888$ 28,439$ (1,551)       (5) %
General, administrative and other      11,063      13,590      (2,527)     
(19)
Business promotion                      2,963       3,203        (240)       (7)
Total expenses                       $ 40,914$ 45,232$ (4,318)      (10) %



Total expenses decreased by $4.3 million, or 10%, to $40.9 million for the six
months ended June 30, 2021, compared to $45.2 million for the comparable period
in 2020.  Personnel expense decreased $1.6 million to $26.9 million for the six
months ended June 30, 2021 as compared to the same period in 2020.  We continue
to rebuild our NonQM platform as well as balance the industry wide escalation in
cost of production and operational talent as we manage our headcount, pipeline
and capacity to balance the risks inherent in an aggregation execution model.

В результате средняя численность персонала снизилась на 8% за шесть месяцев, закончившихся
30 июня 2021 г. по сравнению с тем же периодом 2020 года в результате более высокой средней численности персонала в первом квартале 2020 года, до пандемии. Расходы на персонал снизились до 184 базисных пунктов финансирования за шесть месяцев, закончившихся
30 июня 2021 г. по сравнению со 187 б.п. за аналогичный период 2020 года.




General, administrative and other expenses decreased to $11.1 million for the
six months ended June 30, 2021, compared to $13.6 million for the same period in
2020.  The decrease in general, administrative and other expenses was primarily
due to a $1.4 million decrease in premiums associated with the corporate-owned
life insurance trusts liability, an $879 thousand decrease in other various
general and administrative expenses, a $694 thousand decrease in occupancy
expense partially due to right of use (ROU) asset impairment during the first
quarter of 2020 and a reduction in occupancy expense associated with the
impaired space.  Partially offsetting the decrease in general, administrative
and other expenses was a $446 thousand increase in insurance expense.



Business promotion expense decreased $240 thousand to $3.0 million for the six
months ended June 30, 2021 as compared to $3.2 million for the same period in
the prior year.  Business promotion had remained low as compared to prior
periods as a result of the current interest rate environment which requires
significantly less business promotion to source leads.  During the second
quarter of 2021, we increased business promotion to maintain our lead volume as
well as we began targeting NonQM production in the retail channel. Although we
continue to source leads through digital campaigns, which allow for a more cost
effective approach, the competitiveness within the California market has driven
up advertising costs.





                                       51

  Table of Contents

Net Interest Income

We earn net interest income primarily from mortgage assets, which include
securitized mortgage collateral and loans held-for-sale, or collectively,
"mortgage assets," and, to a lesser extent, interest income earned on cash and
cash equivalents. Interest expense is primarily interest paid on borrowings
secured by mortgage assets, which include securitized mortgage borrowings and
warehouse borrowings and to a lesser extent, interest expense paid on long-term
debt, Convertible Notes, MSR financing and corporate-owned life insurance
trusts. Interest income and interest expense during the period primarily
represents the effective yield, based on the fair value of the trust assets
and
liabilities.



The following table summarizes average balance, interest and weighted average
yield on interest-earning assets and interest-bearing liabilities, for the
periods indicated.








                                                       For the Three Months Ended June 30,
                                                    2021                                 2020
                                        Average                              Average
                                        Balance      Interest     Yield      Balance      Interest     Yield
ASSETS
Securitized mortgage collateral       $ 1,948,484$  14,516     2.98 %  $ 2,237,117$  33,933     6.07 %
Mortgage loans held-for-sale              146,127        1,188     3.25        165,865        1,875     4.52
Other                                      49,884            3     0.02         66,603           24     0.14
Total interest-earning assets         $ 2,144,495$  15,707     2.93 %  $ 2,469,585$  35,832     5.80 %
LIABILITIES
Securitized mortgage borrowings       $ 1,937,717$  12,439     2.57   
$ 2,226,036$  31,896     5.73 %
Warehouse borrowings                      140,298        1,206     3.44        144,035        1,517     4.21
MSR financing facilities                        -            -        -          9,772           93     3.81
Long-term debt                             45,131        1,040     9.22         40,722          948     9.31
Convertible notes                          20,000          350     7.00         24,998          524     8.38
Other                                      12,719          114     3.59         10,773           73     2.71
Total interest-bearing liabilities    $ 2,155,865$  15,149     2.81 %  $ 2,456,336$  35,051     5.71 %
Net interest spread (1)                              $     558     0.12 %                 $     781     0.09 %
Net interest margin (2)                                            0.10 %                               0.13 %

Чистый процентный спред рассчитывается путем вычитания средневзвешенной доходности (1) по процентным обязательствам из средневзвешенной доходности по процентным обязательствам.

активы, приносящие процентный доход.

(2) Чистая процентная маржа рассчитывается путем деления чистого процентного спреда на общую

    average interest-earning assets.




Net interest spread income decreased $223 thousand for the three months ended
June 30, 2021 primarily attributable to a decrease in the net interest spread
between loans held-for-sale and their related warehouse borrowings (a negative
spread of 19 bps for the three months ended June 30, 2021 as compared to a
positive spread of 31 bps for the same period in the prior year), an increase in
interest expense on the corporate-owned life insurance trusts (within other
liabilities) and an increase in interest expense on the long-term debt.

Снижение чистого дохода от процентного спрэда компенсировалось уменьшением процентных расходов по конвертируемым облигациям и финансированию MSR, а также увеличением процентного спрэда по секьюритизированному ипотечному обеспечению и секьюритизированным ипотечным займам. В результате чистая процентная маржа снизилась до 0,10% за три месяца, закончившихся. 30 июня 2021 г. от 0,13% за три месяца, закончившихся 30 июня 2020 г..

During the three months ended June 30, 2021, the yield on interest-earning
assets decreased to 2.93% from 5.80% in the comparable 2020 period. The yield on
interest-bearing liabilities decreased to 2.81% for the three months ended
June 30, 2021 from 5.71% for the comparable 2020 period.  In connection with the
fair value accounting for securitized mortgage collateral and borrowings and
long-term debt, interest income and interest expense are recognized using
effective yields based on estimated fair values for these instruments. The
decrease in yield for securitized mortgage collateral and securitized mortgage
borrowings is primarily related to an increase in prices on mortgage-backed
bonds which resulted in a decrease in yield as compared to the previous period.







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                                                         For the Six Months Ended June 30,
                                                    2021                                 2020
                                        Average                              Average
                                        Balance      Interest     Yield      Balance      Interest     Yield
ASSETS
Securitized mortgage collateral       $ 1,999,048$  29,700     2.97 %  $ 2,367,433$  61,646     5.21 %
Mortgage loans held-for-sale              168,589        2,526     3.00        439,712       10,196     4.64
Other                                      51,983            5     0.02         51,658           85     0.33
Total interest-earning assets         $ 2,219,620$  32,231     2.90 %  $ 2,858,803$  71,927     5.03 %
LIABILITIES
Securitized mortgage borrowings       $ 1,987,330$  25,394     2.56 % 
$ 2,357,094$  57,282     4.86 %
Warehouse borrowings                      162,638        2,729     3.36        406,486        7,761     3.82
MSR financing facilities                        -            -        -          6,040          118     3.91
Long-term debt                             44,892        1,965     8.75         42,293        1,989     9.41
Convertible notes                          20,000          700     7.00         24,997          995     7.96
Other                                      12,663          225     3.55          5,447           73     2.68
Total interest-bearing liabilities    $ 2,227,523$  31,013     2.78 %  $ 2,842,357$  68,218     4.80 %
Net interest spread (1)                              $   1,218     0.12 %                 $   3,709     0.23 %
Net interest margin (2)                                            0.11 %                               0.26 %

Чистый процентный спред рассчитывается путем вычитания средневзвешенной доходности (1) по процентным обязательствам из средневзвешенной доходности по процентным обязательствам.

активы, приносящие процентный доход.

(2) Чистая процентная маржа рассчитывается путем деления чистого процентного спреда на общую

    average interest-earning assets.



Net interest spread income decreased $2.5 million for the six months ended
June 30, 2021 primarily attributable to a decrease in the net interest spread
between loans held-for-sale and their related warehouse borrowings (a negative
spread of 36 bps for the six months ended June 30, 2021 as compared to a
positive spread of 82 bps for the same period in the prior year), an increase in
interest expense on the corporate-owned life insurance trusts (within other
liabilities) and a decrease in the net interest spread on the securitized
mortgage collateral and securitized mortgage borrowings.  Offsetting the
decrease in net interest spread income was a decrease in interest expense on the
convertible notes, long-term debt and MSR financing facilities.  As a result,
the net interest margin decreased to 0.11% for the six months ended
June 30, 2021 from 0.26% for the six months ended June 30, 2020.



During the six months ended June 30, 2021, the yield on interest-earning assets
decreased to 2.90% from 5.03% in the comparable 2020 period. The yield on
interest-bearing liabilities decreased to 2.78% for the six months ended
June 30, 2021 from 4.80% for the comparable 2020 period.  In connection with the
fair value accounting for securitized mortgage collateral and borrowings and
long-term debt, interest income and interest expense are recognized using
effective yields based on estimated fair values for these instruments. The
decrease in yield for securitized mortgage collateral and securitized mortgage
borrowings is primarily related to an increase in prices on mortgage-backed
bonds which resulted in a decrease in yield as compared to the previous period.

Изменение справедливой стоимости долгосрочной задолженности.

Long-term debt (consisting of junior subordinated notes) is measured based upon
an internal analysis, which considers our own credit risk and discounted cash
flow analyses. Improvements in our financial results and financial condition in
the future could result in additional increases in the estimated fair value of
the long-term debt, while deterioration in financial results and financial
condition could result in a decrease in the estimated fair value of the
long-term debt.



During the three months ended June 30, 2021, the fair value of long-term debt
decreased by $461 thousand to $44.9 million from $45.4 million at March 31,
2021.  The decrease in estimated fair value was the result of a $1.4 million
change in the market specific credit risk as a result of a decrease in the
forward LIBOR curve as compared to the first quarter of 2021, partially offset
by a $538 thousand change in the instrument specific credit risk and a $418
thousand increase due to accretion.  During the six months ended June 30, 2021,
the fair value of long-term debt increased by $487 thousand to $44.9 million
from $44.4 million at December 31, 2020. The increase in estimated fair value
was the result of a $2.2 million change in the instrument specific credit risk
and a $724 thousand increase due to accretion, partially offset

                                       53

Оглавление

по 2,4 миллиона долларов изменение рыночного кредитного риска в результате увеличения форвардной кривой LIBOR по сравнению с четвертым кварталом 2020 года.




During the three months ended June 30, 2020, the fair value of the long-term
debt increased $2.2 million to $41.8 million from $39.6 million at March 31,
2020.  The increase in estimated fair value was the result of a $4.2 million
change in the market specific credit risk as a result of an increase in the
forward LIBOR curve as compared to the first quarter of 2020, as well as a $157
thousand increase due to accretion partially offset by a reduction of $2.2
million change in the instrument specific credit risk.  During the six months
ended June 30, 2020, the fair value of long-term debt decreased by $3.6 million
to $41.8 million from $45.4 million at December 31, 2019.  The decrease in
estimated fair value was the result of a $4.8 million change in the market
specific credit risk as a result of a decrease in the forward LIBOR curve as
compared to the fourth quarter of 2019 partially offset by an $887 thousand
change in the instrument specific credit risk and a $318 thousand increase
due
to accretion.


Изменение справедливой стоимости чистых трастовых активов, включая трастовые убытки REO


                                                For the Three Months Ended          For the Six Months Ended
                                                         June 30,                          June 30,
                                                  2021               2020             2021             2020
Change in fair value of net trust assets,
excluding REO                                $      (1,828)$      (2,316)$     (5,373)$  (6,412)
(Losses) gains from REO                               (313)              1,452            1,559          3,165
Change in fair value of net trust assets,
including trust REO gains (losses)           $      (2,141)$        (864)$     (3,814)$  (3,247)




The change in fair value related to our net trust assets (residual interests in
securitizations) was a loss of $2.1 million for the three months ended
June 30, 2021.  The change in fair value of net trust assets, excluding REO was
due to $1.8 million in losses from changes in fair value of securitized mortgage
borrowings and securitized mortgage collateral as a result of cash received in
excess of projections during the quarter and an increase in prepayments on
certain trusts which resulted in a reduction in future residual cashflows,
partially offset by a decrease in forward LIBOR. Additionally, the NRV of REO
decreased $313 thousand during the period attributed to higher expected loss
severities on properties within certain states held in the long-term mortgage
portfolio during the period.



The change in fair value related to our net trust assets (residual interests in
securitizations) was a loss of $0.9 million for the three months ended
June 30, 2020.  The change in fair value of net trust assets, excluding REO was
due to $2.3 million in losses from changes in fair value of securitized mortgage
borrowings and securitized mortgage collateral as a result of increases in loss
assumptions on certain trusts during the period partially offset by a decrease
in forward LIBOR. Additionally, the NRV of REO increased $1.5 million during the
period attributed to lower expected loss severities on properties within certain
states held in the long-term mortgage portfolio during the period.



The change in fair value related to our net trust assets (residual interests in
securitizations) was a loss of $3.8 million for the six months ended
June 30, 2021.  The change in fair value of net trust assets, excluding REO was
due to $5.4 million in losses from changes in fair value of securitized mortgage
borrowings and securitized mortgage collateral as a result of cash received
during the period and an increase in forward LIBOR, as compared to December
2020, offset by a decrease in loss assumptions for certain trusts. The NRV of
REO increased $1.6 million during the period which partially offset the change
in fair value of the net trust assets, excluding REO.  The increase in NRV of
REO was attributed to lower expected loss severities on properties within
certain states held in the long-term mortgage portfolio during the period.



The change in fair value related to our net trust assets (residual interests in
securitizations) was a loss of $3.2 million for the six months ended
June 30, 2020.  The change in fair value of net trust assets, excluding REO was
due to $6.4 million in losses from changes in fair value of securitized mortgage
borrowings and securitized mortgage collateral as a result of increases in loss
assumptions on certain trusts during the period partially offset by a decrease
in forward LIBOR. Additionally, the NRV of REO increased $3.2 million during the
period attributed to lower expected loss severities on properties within certain
states held in the long-term mortgage portfolio during the period.





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Income Taxes

For the quarter ended June 30, 2021, we recorded income tax expense of
approximately $62 thousand, which was the result of applying 1) the calculated
annual effective tax rate (ETR) against the year to date net loss, and 2) the
discrete method in jurisdictions where we meet an exception to using ETR.
 Income tax expense for the six months ended June 30, 2021 was primarily driven
by state income taxes from states where we do not have net operating loss (NOL)
carryforwards. The net deferred tax assets (DTA) were fully valued at June 30,
2021, consistent with December 31, 2020.Tax expense for the three and six months
ended June 30, 2020, is primarily the result of state income taxes from states
where the Company does not have NOL carryforwards or state minimum taxes.



As of December 31, 2020, we had estimated NOL carryforwards of approximately
$609.3 million. Federal NOL carryforwards begin to expire in 2027.  As of
December 31, 2020, we had estimated California NOL carryforwards of
approximately $420.3 million, which begin to expire in 2028.  We may not be able
to realize the maximum benefit due to the nature and tax entities that hold
the
NOL.


Результаты деятельности по бизнес-сегментам




We have three primary operating segments: Mortgage Lending, Long-Term Mortgage
Portfolio and Real Estate Services. Unallocated corporate and other
administrative costs, including the cost associated with being a public company,
are presented in Corporate. Segment operating results are as follows:



Mortgage Lending




                                                For the Three Months Ended June 30,
                                                                          $           %
                                             2021          2020        Change      Change
Gain on sale of loans, net                $   10,693$    1,451$   9,242        637 %
Servicing (expense) fees, net                  (150)         1,352      (1,502)      (111)
Loss on mortgage servicing rights, net          (37)       (8,443)        8,406        100
Total revenues (expenses)                     10,506       (5,640)       16,146        286

Other (expense) income                          (16)           287        (303)      (106)

Personnel expense                           (10,612)       (6,154)      (4,458)       (72)
Business promotion                           (1,766)          (74)      (1,692)    (2,286)
General, administrative and other            (2,910)       (2,136)        (774)       (36)
Loss before income taxes                  $  (4,798)$ (13,717)$   8,919         65 %



For the three months ended June 30, 2021, gain on sale of loans, net was a gain
of $10.7 million compared to $1.5 million in the comparable 2020 period. The
increase in gain on sale of loans, net was most notably due to a $39.7 million
increase in gain on sale of loans and a $28 thousand in premiums from servicing
retained loan sales.  Partially offsetting the increase in gain on sale of
loans, net was a $22.0 million decrease in mark-to-market gains on LHFS, a $4.0
million decrease in realized and unrealized net losses on derivative financial
instruments, a $3.5 million increase in direct origination expenses and an
increase in provision for repurchases of $976 thousand.

As previously discussed, for the three months ended June 30, 2021, the increase
in gain on sale of loans, net was the result of our temporary suspension of
lending activities during the second quarter of 2020 due to the uncertainty
caused by the pandemic.  For the three months ended June 30, 2021, we originated
and sold $611.5 million and $665.4 million, respectively, as compared to $2.1
million and $489.1 million of loans originated and sold, respectively, during
the same period in 2020.  During the second quarter of 2021, margins were 175
bps as compared to 237 bps for the first quarter of 2021.  Margins for the
second quarter of 2020 are not meaningful due to the aforementioned temporary
suspension of lending activities.



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For the three months ended June 30, 2021, servicing (expenses) fees, net were an
expense of $150 thousand compared to income of $1.4 million in the comparable
2020 period.  The decrease in servicing (expense) fees, net was the result of
the sale of $4.2 billion in UPB of Freddie Mac and GNMA MSRs in the second and
third quarters of 2020 as well as runoff of our mortgage servicing portfolio due
to the substantial decrease in mortgage interest rates during the second quarter
of 2020.  The increase in runoff of our mortgage servicing portfolio which
combined with the servicing sales in 2020 decreased the servicing portfolio
average balance 97% to $45.7 million for the three months ended June 30, 2021 as
compared to an average balance of $1.6 billion for the comparable period in
2020.  As a result of the servicing sales in 2020, we will continue to see a
reduction in servicing fees, net and recognize a servicing expense related to
interim subservicing and other servicing costs related to the small UPB of
remaining servicing portfolio.    During the three months ended June 30, 2021,
we had $9.4 million in servicing retained loan sales.



For the three months ended June 30, 2021, loss on MSRs, net was $37 thousand
compared to a loss of $8.4 million in the comparable 2020 period.  The decrease
in loss on mortgage servicing rights, net was the result of the aforementioned
decrease in the size of the mortgage servicing portfolio as compared to the
second quarter of 2020.  For the three months ended June 30, 2021, we recorded a
$37 thousand loss from a change in fair value of MSRs primarily due to scheduled
and voluntary prepayments.  For the three months ended June 30, 2020, we
recorded a $3.1 million loss from a change in fair value of MSRs primarily due
to changes in fair value associated with changes in market rates, inputs and
assumptions as well as voluntary and scheduled prepayments.  As a result of the
aforementioned decrease in interest rates during 2020 and through the second
quarter of 2020, $3.0 million of the $3.1 million change in fair value of MSRs
was due to prepayments, with $1.9 million primarily due to an increase in
prepayment speed assumptions and $1.1 million due to voluntary prepayments.



For the three months ended June 30, 2021, other (expense) income decreased to an
expense of $16 thousand as compared to income of $287 thousand in the comparable
2020 period. The $303 thousand decrease in other income was primarily due to a
$376 thousand decrease net interest spread between loans held-for-sale and their
related warehouse borrowings during the three months ended June 30, 2021 as
compared to the comparable period in 2020.  As a result of the low interest rate
environment which began in the first quarter of 2020, the base interest rates
for our warehouse lines of credit have all hit their floor, which is greater
than the note rate on the underlying mortgage loan financed, resulting in
negative spread on our financing.   Partially offsetting the decrease in other
income was a decrease in interest expense related to MSR financing as a result
of the aforementioned sale of our mortgage servicing portfolio in 2020.



Personnel expense increased $4.5 million to $10.6 million for the three months
ended June 30, 2021 as compared to the same period in 2020.  The increase is
related to an increase in originations during the second quarter of 2021 as well
as the temporary pause in lending during 2020, which resulted in the furlough
and subsequent reduction in headcount.  Although we continue to manage our
headcount, pipeline and capacity to balance the risks inherent in an aggregation
execution model, average headcount increased 119% for the three months ended
June 30, 2021 as compared to the same period in 2020. In addition to the
aforementioned increases in personnel expense, the increase is also the result
of an industry wide escalation in the cost of production and operation talent,
as well as the continued rebuild of our NonQM platform, which began in the
fourth quarter of 2020.



Business promotion expense increased $1.7 million to $1.8 million for the three
months ended June 30, 2021 as compared to $74 thousand for the same period in
the prior year.  The increase is business promotion is partially related to an
increase in originations during the second quarter of 2021 as compared to the
second quarter of 2020, due to the temporary pause in lending during 2020.
 During the second quarter of 2021, we increased business promotion to maintain
our loan lead volume as well as we began targeting NonQM production in the
retail channel. Although we continue to source leads through digital campaigns,
which allows for a more cost-effective approach, the competitiveness within the
California market has driven up advertising costs.



General, administrative and other expenses increased to $2.9 million for the
three months ended June 30, 2021, compared to $2.1 million for the same period
in 2020.  The increase in general, administrative and other expenses was
partially due to a $922 thousand increase in legal and professional fees.

Увеличение общих, административных и прочих расходов частично компенсировалось $ 137 тыс. снижение затрат на размещение.



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                                                For the Six Months Ended June 30,
                                                                          $          %
                                             2021          2020        Change      Change
Gain (loss) on sale of loans, net         $   30,824$ (26,712)$  57,536       215 %
Servicing (expenses) fees, net                 (269)         3,859      (4,128)     (107)
Gain (loss) on mortgage servicing
rights, net                                        1      (26,753)       26,754       100
Total revenues                                30,556      (49,606)       80,162       162

Other (expense) income                         (175)         2,387      (2,562)     (107)

Personnel expense                           (23,662)      (24,134)          472         2
Business promotion                           (2,957)       (3,197)          240         8
General, administrative and other            (4,898)       (5,976)        1,078        18
Loss before income taxes                  $  (1,136)$ (80,526)$  79,390        99 %




For the six months ended June 30, 2021, gain (loss) on sale of loans, net was a
gain of $30.8 million compared to a loss of $ (26.7) million in the comparable
2020 period. The increase in gain on sale of loans, net was most notably due to
a $22.6 million increase in mark-to-market gains on LHFS, a $16.2 million
decrease in realized and unrealized net losses on derivative financial
instruments, a $13.5 million increase in gain on sale of loans, a $5.2 million
decrease in provision for repurchases and a $1.6 million decrease in direct
origination expenses.  Partially offsetting the increase in gain on sale of
loans, net a $1.5 million decrease in premiums from servicing retained loan
sales.

As previously discussed, for the six months ended June 30, 2020, the substantial
remarking of our NonQM loan portfolio held-for-sale as a result of spreads
widening substantially on credit assets due to potential pandemic related
payment delinquencies and forbearances, causing a severe decline in the values
assigned by counterparties for NonQM assets, which resulted in a significant
loss on sale of loans, net.  For the six months ended June 30, 2021, we
originated and sold $1.5 billion of mortgage loans, respectively, as compared to
$1.5 billion and $2.2 billion of loans originated and sold, respectively, during
the same period in 2020.  During the six months ended June 30, 2021, margins
were 211 bps as compared to the negative margins during the same period in 2020
resulting in the aforementioned loss on sale of loans.



For the six months ended June 30, 2021, servicing (expenses) fees, net were an
expense of $269 thousand compared to income of $3.9 million in the comparable
2020 period.  The decrease in servicing fees, net was the result of the sale of
$4.2 billion in UPB of Freddie Mac and GNMA MSRs in the second and third
quarters of 2020.  In addition, the substantial decrease in mortgage interest
rates during 2020 caused a significant increase in runoff of our mortgage
servicing portfolio which combined with the servicing sale decreased the
servicing portfolio average balance 99% to $41.8 million for the six months
ended June 30, 2021 as compared to an average balance of $3.2 billion for the
comparable period in 2020.  As a result of the servicing sales in 2020, we will
continue to see a reduction in servicing fees, net and recognize a servicing
expense related to interim subservicing and other servicing costs related to the
small UPB of remaining servicing portfolio.    During the six months ended
June 30, 2021, we had $19.8 million in servicing retained loan sales.



For the six months ended June 30, 2021, gain (loss) on MSRs, net was $1 thousand
compared to a loss of $26.8 million in the comparable 2020 period.  For the six
months ended June 30, 2021, we recorded a $39 thousand gain from a change in
fair value of MSRs primarily due to changes in fair value associated with
changes in market rates, inputs and assumptions partially offset by scheduled
and voluntary prepayments.  For the six months ended June 30, 2020, we recorded
a $21.9 million loss from a change in fair value of MSRs primarily due to
changes in fair value associated with changes in market rates, inputs and
assumptions as well as voluntary and scheduled prepayments.  As a result of the
aforementioned decrease in interest rates during 2020 and through the second
quarter of 2021, $21.4 million of the $21.9 million change in fair value of MSRs
was due to prepayments, with $17.7 million primarily due to an increase in
prepayment speed assumptions and $3.7 million due to voluntary prepayments.



For the six months ended June 30, 2021, other income (expense) decreased to an
expense of $175 thousand as compared to income of $2.4 million in the comparable
2020 period. The $2.6 million decrease in other income was primarily due to a
$2.6 million decrease net interest spread between loans held-for-sale and their
related warehouse

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borrowings during the six months ended June 30, 2021 as compared to the
comparable period in 2020.  As a result of the low interest rate environment
which began in the first quarter of 2020, the base interest rates for our
warehouse lines of credit have all hit their floor, which is greater than the
note rate on the underlying mortgage loan financed, resulting in negative spread
on our financing. Partially offsetting the decrease in other income was a
decrease in interest expense related to MSR financing as a result of the
aforementioned sale of our mortgage servicing portfolio in 2020.



Personnel expense decreased $472 thousand to $23.7 million for the six months
ended June 30, 2021, as compared to the same period in 2020.  We continue to
rebuild our NonQM platform as well as balance the industry wide escalation in
cost of production and operational talent as we manage our headcount, pipeline
and capacity to balance the risks inherent in an aggregation execution model.
 As a result, average headcount decreased 5% for the six months ended
June 30, 2021 as compared to the same period in 2020. Although personnel expense
declined during the six months ended June 30, 2021, it increased to 162 bps of
funding's as compared to 159 bps for the comparable 2020 period.



Business promotion expense decreased $240 thousand to $3.0 million for the six
months ended June 30, 2021 as compared to $3.2 million for the same period in
the prior year.  Business promotion had remained low as compared to prior
periods as a result of the current interest rate environment which requires
significantly less business promotion to source leads.  During the second
quarter of 2021, we increased business promotion to maintain our lead volume as
well as we began targeting NonQM production in the retail channel. Although we
continue to source loan leads through digital campaigns, which allow for a more
cost effective approach, the competitiveness within the California market has
driven up advertising costs.



General, administrative and other expenses decreased to $4.9 million for the six
months ended June 30, 2021, compared to $6.0 million for the same period in
2020.  The decrease in general, administrative and other expenses was partially
due to a $1.1 million decrease in occupancy expense partially due to right of
use (ROU) asset impairment during the first quarter of 2020 as well as a
reduction in occupancy expense associated with the impaired space and a $661
thousand decrease in other various general and administrative expenses.
Partially offsetting the decrease in general, administrative and other expenses
was a $661 thousand increase in legal and professional fees.





Long-Term Mortgage Portfolio


                                                  For the Three Months Ended June 30,
                                                                            $          %
                                                2021         2020        Change      Change
Other revenue                                 $      42$      30$      12        40 %

Personnel expense                                  (27)         (35)            8        23
General, administrative and other                 (108)        (144)       
   36        25
Total expenses                                    (135)        (179)           44        25

Net interest income                               1,038        1,089         (51)       (5)
Change in fair value of long-term debt            1,417      (4,208)        5,625       134
Change in fair value of net trust assets,
including trust REO gains (losses)              (2,141)        (864)      (1,277)     (148)
Total other income (expense)                        314      (3,983)        4,297       108
Earnings (loss) before income taxes           $     221$ (4,132)    $  
4,353       105 %





For the three months ended June 30, 2021 and 2020, net interest income was flat
at $1.1 million. Net interest income decreased $51 thousand for the three months
ended June 30, 2021 primarily attributable to a $92 thousand increase in
interest expense on the long-term debt associated with an increase in interest
accretion offset by a $40 thousand increase in net interest spread on the
long-term mortgage portfolio.



За истекшие три месяца 30 июня 2021 г., справедливая стоимость долгосрочного долга снизилась на $ 461 тыс. к 44,9 млн. Долл. США из 45,4 млн. Долл. США в 31 марта 2021 г.. Уменьшение оценочной справедливой стоимости произошло в результате 1,4 миллиона долларов


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изменение рыночного кредитного риска в результате снижения форвардной кривой LIBOR по сравнению с первым кварталом 2021 года, частично компенсируемое $ 538 тыс. изменение кредитного риска конкретного инструмента и $ 418 тыс. увеличение за счет аккреции.




The change in fair value related to our net trust assets (residual interests in
securitizations) was a loss of $2.1 million for the three months ended
June 30, 2021.  The change in fair value of net trust assets, excluding REO was
due to $1.8 million in losses from changes in fair value of securitized mortgage
borrowings and securitized mortgage collateral as a result of cash received in
excess of projections during the quarter and an increase in prepayments on
certain trusts which resulted in a reduction in future residual cashflows,
partially offset by a decrease in forward LIBOR. Additionally, the NRV of REO
decreased $313 thousand during the period attributed to higher expected loss
severities on properties within certain states held in the long-term mortgage
portfolio during the period.




                                                   For the Six Months Ended June 30,
                                                                            $          %
                                                2021         2020        Change      Change
Other revenue                                 $      69$      72$     (3)       (4) %

Personnel expense                                  (55)         (69)           14        20
General, administrative and other                 (201)        (281)       
   80        28
Total expenses                                    (256)        (350)           94        27

Net interest income                               2,341        2,376         (35)       (1)
Change in fair value of long-term debt            2,442        4,828      (2,386)      (49)
Change in fair value of net trust assets,
including trust REO gains (losses)              (3,814)      (3,247)        (567)      (17)
Total other income                                  969        3,957      (2,988)      (76)
Earnings before income taxes                  $     782$   3,679$ (2,897)      (79) %






For the six months ended June 30, 2021, net interest income was flat at $2.3
million. Net interest income decreased $35 thousand for the six months ended
June 30, 2021 primarily attributable to a $58 thousand decrease in net interest
spread on the long-term mortgage portfolio partially offset by a $24 thousand
decrease in interest expense on the long-term debt associated with a decrease in
interest expense partially offset by an increase in accretion.



During the six months ended June 30, 2021, the fair value of long-term debt
increased by $487 thousand to $44.9 million from $44.4 million at December 31,
2020. The increase in estimated fair value was the result of a $2.2 million
change in the instrument specific credit risk and a $724 thousand increase due
to accretion, partially offset by a $2.4 million change in the market specific
credit risk as a result of an increase in the forward LIBOR curve as compared to
the fourth quarter of 2020.



The change in fair value related to our net trust assets (residual interests in
securitizations) was a loss of $3.8 million for the six months ended
June 30, 2021.  The change in fair value of net trust assets, excluding REO was
due to $5.4 million in losses from changes in fair value of securitized mortgage
borrowings and securitized mortgage collateral as a result of cash received
during the period and an increase in forward LIBOR, as compared to December
2020, offset by a decrease in loss assumptions for certain trusts. The NRV of
REO increased $1.6 million during the period which partially offset the change
in fair value of the net trust assets, excluding REO.  The increase in NRV of
REO was attributed to lower expected loss severities on properties within
certain states held in the long-term mortgage portfolio during the period.
                                       59

  Table of Contents



Real Estate Services


                                             For the Three Months Ended June 30,
                                                                        $          %
                                          2021           2020         Change     Change
Real estate services fees, net         $      478$      293$    185        63 %
Personnel expense                           (292)          (287)          (5)       (2)
General, administrative and other            (64)           (69)           

5 7 Прибыль (убыток) до налогообложения 122 доллара США$ (63)185 долл. США 294%





For the three months ended June 30, 2021, real estate services fees, net were
$478 thousand compared to $293 thousand in the comparable 2020 period. The $185
thousand increase in real estate services fees, net was primarily the result of
a $121 thousand increase in loss mitigation fees and a $64 thousand increase in
real estate service fees.  Although the real estate services fees, net increased
as compared to the same period in 2020, they have declined and will continue to
decline over time as a result of the decline in the number of loans and the UPB
of the long-term mortgage portfolio.




                                          For the Six Months Ended June 30,
                                                                   $         %
                                       2021          2020       Change     Change

Комиссия за услуги в сфере недвижимости, нетто 688 долл. США687 долл. США1 доллар

     0 %
Personnel expense                        (597)         (575)       (22)    

(4)

Общие, административные и прочие (128) (142) 14

   10
Loss before income taxes             $    (37)$    (30)$   (7)      (23) %



For the six months ended June 30, 2021, real estate services fees, net were $688
thousand compared to $687 thousand in the comparable 2020 period. The real
estate service fees were flat for the six months ended June 30, 2021 as compared
to the same period in 2020, and have declined and will continue to decline over
time as a result of a decrease in transactions related to the decline in the
number of loans and the UPB of the long-term mortgage portfolio.



Corporate


The corporate segment includes all compensation applicable to the corporate
services groups, public company costs as well as debt expense related to the
Convertible Notes and capital leases. This corporate services group supports all
operating segments. A portion of the corporate services costs is allocated to
the operating segments. The costs associated with being a public company as well
as the interest expense related to the Convertible Notes and capital leases are
not allocated to our other segments and remain in this segment.




                                     For the Three Months Ended June 30,
                                                                $          %
                                  2021            2020        Change     Change
Interest expense               $     (464)$    (595)$    131        22 %
Other expenses                     (3,883)        (4,307)         424        10
Net loss before income taxes   $   (4,347)$  (4,902)$    555        11 %




For the three months ended June 30, 2021, interest expense decreased to $464
thousand as compared to $595 thousand in the comparable 2020 period. The
decrease was primarily due to a $174 thousand decrease in interest expense
attributable to the Notes extension entered into in 2020, partially offset by a
$41 thousand increase in interest expense associated with the premium financing
associated with the corporate-owned life insurance trusts liability.



За истекшие три месяца 30 июня 2021 г., прочие расходы уменьшились до 3,9 миллиона долларов по сравнению с 4,3 миллиона долларов за сопоставимый период 2020 года. За истекшие три месяца 30 июня 2021 г., основное уменьшение прочих расходов составило


                                       60

Оглавление


a $1.4 million decrease in premiums associated with the corporate-owned life
insurance trusts liability in the second quarter of 2020, a $418 thousand
decrease in legal and professional fees and a $265 thousand decrease in
personnel expense. Partially offsetting the decrease in other expense was a $1.3
million reduction due to the increase in cash surrender value of corporate-owned
life insurance trusts in the second quarter of 2020, a $238 thousand increase in
insurance expense and a $124 thousand increase in occupancy expense.






                                     For the Six Months Ended June 30,
                                                              $         %
                                  2021          2020       Change     Change
Interest expense                $   (924)$  (1,054)$   130        12 %
Other expenses                    (8,189)       (9,578)      1,389        15

Чистый убыток до налогообложения (9 113)(10 632 долл. США)1 519 долл. США 14%

For the six months ended June 30, 2021, interest expense decreased to $924
thousand as compared to $1.1 million in the comparable 2020 period. The decrease
was primarily due to a $295 thousand decrease in interest expense attributable
to the convertible note extension entered into in 2020, partially offset by a
$153 thousand increase in interest expense associated with the premium financing
associated with the corporate-owned life insurance trusts liability.



For the six months ended June 30, 2021, other expenses decreased to $8.2
million as compared to $9.6 million for the comparable 2020 period. During the
six months ended June 30, 2021, the primary decrease in other expense was a $1.4
million decrease in premiums associated with the corporate-owned life insurance
trusts liability as compared to the same period in 2020, a $1.1 million decrease
in personnel expense and a $652 thousand decrease in legal and professional
fees. Partially offsetting the decrease in other expense was a $1.0 million
reduction due to the increase in cash surrender value of corporate-owned life
insurance trusts as compared to the same period in 2020, a $478 thousand
increase in insurance expense and a $385 thousand increase in occupancy expense.

© Эдгар Онлайн, источник Проблески

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