Document And Entity Information
Document And Entity Information - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2016 | Mar. 15, 2017 | Jun. 30, 2016 | |
Document Information [Line Items] | |||
Document Type | 10-K | ||
Amendment Description | As used in this Amendment No. 2 on Form 10-K/A for the fiscal year ended December 31, 2016 (the "Form 10-K/A"), the terms "Company", "our" or "we" refer to Hunt Companies Finance Trust, Inc. (formerly known as Five Oaks Investment Corp.), a Maryland Corporation. This Form 10-K/A amends the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 2016, as originally filed with the Securities and Exchange Commission ("SEC") on March 16, 2017 (the "Original Filing"), as well as Amendment No. 1 on Form 10-K/A to the Original Filing, as filed with the SEC on June 14, 2017. This Form 10-K/A is being filed to restate our audited consolidated financial statements for the fiscal year ended December 31, 2016 and to make related revisions to certain other disclosures in the Original Filing. As previously disclosed in our Current Report on Form 8-K filed November 6, 2018, the restatement of our financial statements in this Form 10-K/A reflects the correction of certain identified errors relating to incorrectly reported unrealized losses on Residential Mortgage Back Securities ("RMBS") Interest Only Certificates ("RMBS IOs") upon our deconsolidation of the JPMMT 2014-OAK4 Trust and an incorrectly reported release of credit reserves relating to certain RMBS upon their sale in 2016. The unrealized losses on the RMBS IOs were incorrectly reported through other comprehensive income (loss) instead of through unrealized gain (loss) on fair value options securities for the fiscal year ended December 31, 2016. The release of credit reserves was incorrectly reported through other comprehensive income (loss) instead of through our consolidated statement of operations for the fiscal year ended December 31, 2016. While having no impact on total stockholders' equity, as a result of these errors, accumulated other comprehensive income (loss) and accumulated earnings (deficit) were incorrectly stated by equal and offsetting amounts in our consolidated balance sheet as of December 31, 2016. Further explanation regarding the restatement is set forth in Note 21 to the audited consolidated financial statements included in this Form 10-K/A. The following sections in the Original Filing (and in Amendment No. 1 in the case of Part IV – Item 15) are revised in this Form 10-K/A to reflect the restatement: • Part I – Item 1A – Risk Factors • Part II – Item 6 – Selected Financial Data • Part II – Item 7 – Management's Discussion and Analysis of Financial Condition and Results of Operations • Part II – Item 8 – Financial Statements and Supplementary Data • Part II – Item 9A – Controls and Procedures • Part IV – Item 15 – Exhibits, Financial Statements and Schedules Our principal executive officer and principal financial officer have also provided new certifications as required by Sections 302 and 906 of the Sarbanes-Oxley Act of 2002. The certifications are included in this Form 10-K/A as Exhibits 31.1, 31.2, 32.1 and 32.2. For the convenience of the reader, this Form 10-K/A sets forth the information in the Original Filing in its entirety; as such information, as well as the information in Amendment No. 1, are modified and superseded where necessary to reflect the restatement and other revisions. Except as provided above, this Amendment No. 2 does not reflect events occurring after the filing of the Original Filing and does not amend or otherwise update any information in the Original Filing. Accordingly, this Form 10-K/A should be read in conjunction with our filings with the SEC subsequent to the date on which we filed the Original Filing with the SEC. Unless the context otherwise indicates or requires, as used in this Annual Report on Form 10-K, references to: • "Agency" means each of Federal National Mortgage Association, or Fannie Mae, Federal Home Loan Mortgage Corporation, or Freddie Mac, and the Government National Mortgage Association, a wholly owned corporate instrumentality of the United States of America within the U.S. Department of Housing and Urban Development, or Ginnie Mae. • "Agency RMBS" means mortgage-backed securities that are collateralized by residential mortgages, or RMBS, whose principal and interest payments are guaranteed by Ginnie Mae or a U.S. Government-sponsored entity, or GSE, such as Freddie Mac or Fannie Mae. These securities may be either "pass through" securities, where cash flows from the underlying mortgage loan pool are paid to holders of the securities on a pro rata basis, or securities structured from "pass through" securities, as to which cash flows are redirected in various priorities, which we refer to as a collateralized mortgage obligation. • "ARMs" means adjustable-rate residential mortgage loans. • "Company," "we," "us," or "our" refers to Five Oaks Investment Corp., together with its wholly owned, subsidiaries, Five Oaks Acquisition Corp., Five Oaks Insurance LLC, Oaks Funding LLC, Oaks Funding II LLC and Oaks Holding I LLC unless we specifically state otherwise or the context indicates otherwise. • "credit enhancement" means techniques to improve the credit ratings of securities, including overcollateralization, creating retained spread, creating subordinated tranches and insurance. • "FHFA" means the Federal Housing Finance Agency. • "hybrid ARMs" means residential mortgage loans that have interest rates that are fixed for a specified period of time (typically three, five, seven or ten years) and, thereafter, adjust to an increment over a specified interest rate index. • "K-Series" means multi-family mortgage loan securitizations sponsored by Freddie Mac. • "Linked Transaction" means the initial purchase of RMBS securities and contemporaneous financing with a repurchase agreement with the same counterparty from which the securities were purchased. • "mortgage loans" means loans secured by real estate with a right to receive the payment of principal and interest on the loan (including servicing fees). • "Multi-Family MBS" means a mortgage-backed securities, or MBS, investment in a securitization backed by multi-family mortgage loans. Such Multi-Family MBS may be sponsored by Fannie Mae, Freddie Mac or Ginnie Mae, or may not be sponsored by Ginnie Mae or a U.S. Government-sponsored entity such as Freddie Mac or Fannie Mae. • "Non-Agency RMBS" means RMBS that are not issued or guaranteed by Ginnie Mae or a U.S. Government-sponsored entity such as Freddie Mac or Fannie Mae, including investment grade classes (rated AAA through BBB), non-investment grade classes (rated BB or lower) and unrated classes. • "Oak Circle" or "our Manager" means Oak Circle Capital Partners LLC. • "swaption" means an option in which the buyer has the right to enter into an interest rate swap. • "TBAs" means to-be-announced forward contracts. In a TBA, a buyer will agree to purchase, for future delivery, Agency mortgage investments with certain principal and interest terms and certain types of underlying collateral, but the particular Agency mortgage investments to be delivered are not identified until shortly before the TBA settlement date. • "VIE" means a variable interest entity that lacks one or more of the characteristics of a voting interest entity. A VIE is defined as an entity in which equity investors do not have the characteristics of a controlling financial interest or do not have sufficient equity at risk for the entity to finance its activities without additional subordinated financial support from other parties. We consolidate a VIE when we are the primary beneficiary of such VIE. As primary beneficiary, we have both the power to direct the activities that most significantly impact the economic performance of the VIE and a right to receive benefits or absorb losses of the entity that could be potentially significant to the VIE. We are required to reconsider our evaluation of whether to consolidate a VIE each reporting period, based upon changes in the facts and circumstances pertaining to the VIE. • "whole pool" means MBS issued with respect to an underlying pool of mortgage loans in which a buyer holds all of the certificates issued by a pool. | ||
Amendment Flag | true | ||
Document Period End Date | Dec. 31, 2016 | ||
Document Fiscal Year Focus | 2,016 | ||
Document Fiscal Period Focus | FY | ||
Entity Registrant Name | Hunt Companies Finance Trust, Inc. | ||
Entity Central Index Key | 1,547,546 | ||
Current Fiscal Year End Date | --12-31 | ||
Entity Well-known Seasoned Issuer | No | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Filer Category | Accelerated Filer | ||
Entity Public Float | $ 61.5 | ||
Trading Symbol | HCFT | ||
Entity Common Stock, Shares Outstanding | 17,539,258 | ||
Entity Shell Company | false | ||
Entity Emerging Growth Company | false | ||
Entity Small Business | false |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) | Dec. 31, 2016 | Dec. 31, 2015 | |
ASSETS | |||
Available-for-sale securities, at fair value (includes pledged securities of $876,121,505 and $571,086,035 for December 31, 2016 and December 31, 2015, respectively) | [1] | $ 870,929,601 | $ 571,466,581 |
Mortgage loans held-for-sale, at fair value (includes pledged loans of $0 and $10,900,402 for December 31, 2016 and December 31, 2015, respectively) | [1] | 2,849,536 | 10,900,402 |
Multi-family loans held in securitization trusts, at fair value | [1] | 1,222,905,433 | 1,449,774,383 |
Residential loans held in securitization trusts, at fair value | [1] | 141,126,720 | 411,881,097 |
Mortgage servicing rights, at fair value | [1] | 3,440,809 | 4,268,673 |
Cash and cash equivalents | [1] | 27,534,374 | 26,140,718 |
Restricted cash | [1] | 10,355,222 | 8,174,638 |
Deferred offering costs | [1] | 96,489 | 0 |
Accrued interest receivable | [1] | 7,619,717 | 8,650,986 |
Dividends receivable | [1] | 122 | 26,022 |
Investment related receivable | [1] | 3,914,458 | 1,591,343 |
Derivative assets, at fair value | [1] | 8,053,813 | 2,558,350 |
FHLB stock | [1] | 0 | 2,403,000 |
Other assets | [1] | 774,909 | 530,468 |
Total assets | [1] | 2,299,601,203 | 2,498,366,661 |
Repurchase agreements: | |||
Available-for-sale securities | [1] | 804,811,000 | 509,231,000 |
Mortgage loans held-for-sale | [1] | 0 | 9,504,457 |
FHLB Advances | [1] | 0 | 49,697,000 |
Multi-family securitized debt obligations | [1] | 1,204,583,678 | 1,364,077,012 |
Residential securitized debt obligations | [1] | 134,846,348 | 380,638,423 |
Accrued interest payable | [1] | 5,467,916 | 6,574,699 |
Dividends payable | [1] | 39,132 | 39,132 |
Deferred income | [1] | 203,743 | 0 |
Due to broker | [1] | 4,244,678 | 0 |
Fees and expenses payable to Manager | [1] | 880,000 | 842,903 |
Other accounts payable and accrued expenses | [1] | 2,057,843 | 267,507 |
Total liabilities | [1] | 2,157,134,338 | 2,320,872,133 |
STOCKHOLDERS' EQUITY: | |||
Preferred Stock: par value $0.01 per share; 50,000,000 shares authorized, 8.75% Series A cumulative redeemable, $25 liquidation preference, 1,610,000 and 1,610,000 issued and outstanding at December, 2016 and December 31, 2015, respectively | [1] | 37,156,972 | 37,156,972 |
Common Stock: par value $0.01 per share; 450,000,000 shares authorized, 17,539,258 and 14,656,394 shares issued and outstanding, at December 31, 2016 and December 31, 2015, respectively | [1] | 175,348 | 146,409 |
Additional paid-in capital | [1] | 204,264,868 | 189,037,702 |
Accumulated other comprehensive income (loss) | [1] | (6,831,940) | (395,771) |
Cumulative distributions to stockholders | [1] | (89,224,194) | (55,803,240) |
Accumulated earnings (deficit) | [1] | (3,074,189) | 7,352,456 |
Total stockholders' equity | [1] | 142,466,865 | 177,494,528 |
Total liabilities and stockholders' equity | [1] | $ 2,299,601,203 | $ 2,498,366,661 |
[1] | Our consolidated balance sheets include assets and liabilities of consolidated variable interest entities (“VIE's) as the Company is the primary beneficiary of these VIEs. As of December 31, 2016 and December 31, 2015, assets of consolidated VIEs totaled $1,369,120,941 and $1,868,482,556, respectively, and the liabilities of consolidated VIEs totaled $1,344,404,080 and $1,750,916,265, respectively |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - USD ($) | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Available-for-sale Securities Pledged as Collateral (in dollars) | $ 876,121,505 | $ 571,086,035 |
Loans Pledged as Collateral | $ 0 | $ 10,900,402 |
Preferred Stock, Par Value (in dollars per share) | $ 0.01 | $ 0.01 |
Preferred Stock, Shares Authorized | 50,000,000 | 50,000,000 |
Preferred Stock, Dividend Rate, Percentage | 8.75% | 8.75% |
Preferred Stock, Liquidation Preference, Value (in dollars) | $ 25 | $ 25 |
Preferred Stock, Shares Issued | 1,610,000 | 1,610,000 |
Preferred Stock, Shares Outstanding | 1,610,000 | 1,610,000 |
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Common stock, shares authorized | 450,000,000 | 450,000,000 |
Common stock, shares issued | 17,539,258 | 14,656,394 |
Common stock, shares outstanding | 17,539,258 | 14,656,394 |
Variable Interest Entity, Consolidated, Carrying Amount, Assets (in dollars) | $ 1,369,120,941 | $ 1,868,482,556 |
Variable Interest Entity, Consolidated, Carrying Amount, Liabilities (in dollars) | $ 1,344,404,080 | $ 1,750,916,265 |
Consolidated Statements of Oper
Consolidated Statements of Operations - USD ($) | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Interest income: | |||
Available-for-sale securities | $ 23,475,765 | $ 24,298,156 | $ 16,560,338 |
Mortgage loans held-for-sale | 430,986 | 2,097,702 | 3,634,264 |
Multi-family loans held in securitization trusts | 58,587,780 | 68,016,595 | 21,158,102 |
Residential loans held in securitization trusts | 10,585,191 | 19,986,204 | 4,438,634 |
Cash and cash equivalents | 41,994 | 16,351 | 21,274 |
Interest expense: | |||
Repurchase agreements - available-for-sale securities | (6,237,777) | (6,467,312) | (2,661,329) |
Repurchase agreements - mortgage loans held-for-sale | (237,807) | (1,323,892) | (2,203,961) |
Multi-family securitized debt obligations | (54,940,386) | (62,157,176) | (19,400,851) |
Residential securitized debt obligations | (8,117,402) | (13,156,912) | (3,575,168) |
Net interest income | 23,588,344 | 31,309,716 | 17,971,303 |
Other-than-temporary impairments | |||
(Increase) decrease in credit reserves | 745,492 | (745,492) | 0 |
Additional other-than-temporary credit impairment losses | (183,790) | (2,890,939) | 0 |
Total impairment losses recognized in earnings | 561,702 | (3,636,431) | 0 |
Other income: | |||
Realized gain (loss) on sale of investments, net | (7,216,137) | (533,832) | 3,271,592 |
Change in unrealized gain (loss) on fair value option securities | (8,406,934) | (1,041,649) | 0 |
Change in unrealized gain (loss) and net interest income from Linked Transactions | 0 | 0 | 10,605,848 |
Realized gain (loss) on derivative contracts, net | (3,089,001) | (12,024,730) | (18,214,460) |
Change in unrealized gain (loss) on derivative contracts, net | 5,495,463 | 4,909,858 | (2,931,249) |
Realized gain (loss) on mortgage loans held-for-sale | 94,187 | 1,216,314 | (776,971) |
Change in unrealized gain (loss) on mortgage loans held-for-sale | (151,023) | (197,179) | 329,728 |
Change in unrealized gain (loss) on mortgage servicing rights | (827,864) | (671,957) | 0 |
Change in unrealized gain (loss) on multi-family loans held in securitization trusts | (5,219,530) | 6,097,000 | 1,473,485 |
Change in unrealized gain (loss) on residential loans held in securitization trusts | 404,720 | (8,153,474) | 3,059,647 |
Other interest expense | (1,860,000) | 0 | 0 |
Servicing income | 932,424 | 211,878 | 0 |
Other income | 32,276 | 85,726 | 59,590 |
Total other income (loss) | (19,811,419) | (10,102,045) | (3,122,790) |
Expenses: | |||
Management fee | 2,472,353 | 2,774,432 | 2,627,592 |
General and administrative expenses | 5,867,851 | 6,660,934 | 2,901,076 |
Operating expenses reimbursable to Manager | 4,747,275 | 4,980,348 | 3,247,683 |
Other operating expenses | 1,480,341 | 2,448,439 | 2,504,741 |
Compensation expense | 197,452 | 256,608 | 253,635 |
Total expenses | 14,765,272 | 17,120,761 | 11,534,727 |
Net income (loss) before provision from income taxes | (10,426,645) | 450,479 | 3,313,786 |
(Provision for) benefit from income taxes | 0 | 0 | 0 |
Net income (loss) | (10,426,645) | 450,479 | 3,313,786 |
Dividends to preferred stockholders | (3,522,036) | (3,522,036) | (2,887,296) |
Net income (loss) attributable to common stockholders | (13,948,681) | (3,071,557) | 426,490 |
Earnings (loss) per share: | |||
Net income (loss) attributable to common stockholders (basic and diluted) | $ (13,948,681) | $ (3,071,557) | $ 426,490 |
Weighted average number of shares of common stock outstanding | 14,641,701 | 14,721,074 | 12,358,587 |
Basic and diluted income (loss) per share (in dollars per share) | $ (0.95) | $ (0.21) | $ 0.03 |
Dividends declared per share of common stock (in dollars per share) | $ 2.04 | $ 1.35 | $ 1.47 |
Consolidated Statements of Comp
Consolidated Statements of Comprehensive Income (Loss) - USD ($) | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Net income (loss) | $ (10,426,645) | $ 450,479 | $ 3,313,786 |
Other comprehensive income (loss): | |||
Increase (decrease) in net unrealized gain on available-for-sale securities, net | (100,937) | (14,776,266) | 10,845,303 |
Reclassification adjustment for net gain (loss) included in net income (loss) | (5,589,740) | 1,969,108 | 7,458,001 |
Reclassification adjustment for other-than-temporary impairments included in net income (loss) | (745,492) | 745,492 | 0 |
Reclassification cumulative adjustment for Linked Transactions | 0 | 4,457,544 | 0 |
Total other comprehensive income (loss) | (6,436,169) | (7,604,122) | 18,303,304 |
Less: Dividends to preferred stockholders | (3,522,036) | (3,522,036) | (2,887,296) |
Comprehensive income (loss) attributable to common stockholders | $ (20,384,850) | $ (10,675,679) | $ 18,729,794 |
Consolidated Statements of Stoc
Consolidated Statements of Stockholders' Equity - USD ($) | Total | Preferred Stock [Member] | Common Stock [Member] | Additional Paid-in Capital [Member] | AOCI Attributable to Parent [Member] | Cumulative Distributions to Stockholders [Member] | Accumulated Earnings (Deficit) [Member] | |
Balance at Dec. 31, 2013 | $ 113,925,362 | $ 18,060,898 | $ 73,563 | $ 110,129,489 | $ (11,094,954) | $ (11,289,370) | $ 8,045,736 | |
Balance (in shares) at Dec. 31, 2013 | 800,000 | 7,389,250 | ||||||
Issuance of common stock, net | 79,263,318 | $ 0 | $ 73,390 | 79,189,928 | 0 | 0 | 0 | |
Issuance of common stock, net (in shares) | 0 | 7,339,000 | ||||||
Issuance of preferred stock, net | 19,096,074 | $ 19,096,074 | $ 0 | 0 | 0 | 0 | 0 | |
Issuance of preferred stock, net (in shares) | 810,000 | 0 | ||||||
Restricted stock compensation expense | 13,457 | $ 0 | $ 0 | 13,457 | 0 | 0 | 0 | |
Restricted stock compensation expense (in shares) | 0 | (9,500) | ||||||
Net income (loss) | 3,313,786 | $ 0 | $ 0 | 0 | 0 | 0 | 3,313,786 | |
Other comprehensive income (loss) | 18,303,304 | 18,303,304 | ||||||
Reclassification adjustment for net gain (loss) included in net income (loss) | 7,458,001 | |||||||
Common dividends declared | (18,229,875) | 0 | 0 | 0 | 0 | (18,229,875) | 0 | |
Preferred dividends declared | (2,887,296) | 0 | 0 | 0 | 0 | (2,887,296) | 0 | |
Balance at Dec. 31, 2014 | 212,798,130 | $ 37,156,972 | $ 146,953 | 189,332,874 | 7,208,351 | (32,406,541) | 11,359,521 | |
Balance (in shares) at Dec. 31, 2014 | 1,610,000 | 14,718,750 | ||||||
Issuance of common stock, net | 0 | $ 0 | $ 140 | (140) | 0 | 0 | 0 | |
Issuance of common stock, net (in shares) | 0 | 14,000 | ||||||
Cost of issuing common stock | 0 | $ 0 | $ 0 | 0 | 0 | 0 | 0 | |
Cost of issuing common stock (in shares) | 0 | 0 | ||||||
Issuance of preferred stock, net | 0 | $ 0 | $ 0 | 0 | 0 | 0 | 0 | |
Issuance of preferred stock, net (in shares) | 0 | 0 | ||||||
Redemption of preferred stock, net | 0 | $ 0 | $ 0 | 0 | 0 | 0 | 0 | |
Redemption of preferred stock, net (in shares) | 0 | 0 | ||||||
Issuance of treasury stock, net | (358,991) | $ 0 | $ (684) | (358,307) | 0 | 0 | 0 | |
Issuance of treasury stock, net (in shares) | 0 | (68,356) | ||||||
Restricted stock compensation expense | 63,275 | $ 0 | $ 0 | 63,275 | 0 | 0 | 0 | |
Restricted stock compensation expense (in shares) | 0 | (8,000) | ||||||
Net income (loss) | 450,479 | $ 0 | $ 0 | 0 | 0 | 0 | 450,479 | |
Other comprehensive income (loss) | (7,604,122) | |||||||
Increase (decrease) in net unrealized gain on available-for-sale securities, net | (14,776,266) | 0 | 0 | 0 | (14,776,266) | 0 | 0 | |
Reclassification adjustment for net gain (loss) included in net income (loss) | 1,969,108 | 0 | 0 | 0 | 1,969,108 | 0 | 0 | |
Reclassification cumulative adjustments for Linked Transactions | 0 | 0 | 0 | 0 | 4,457,544 | 0 | (4,457,544) | |
Reclassification adjustment for other-than-temporary impairments included in net income (loss) | 745,492 | 0 | 0 | 0 | 745,492 | 0 | 0 | |
Common dividends declared | (19,874,663) | 0 | 0 | 0 | 0 | (19,874,663) | 0 | |
Preferred dividends declared | (3,522,036) | 0 | 0 | 0 | 0 | (3,522,036) | 0 | |
Balance at Dec. 31, 2015 | 177,494,528 | [1] | $ 37,156,972 | $ 146,409 | 189,037,702 | (395,771) | (55,803,240) | 7,352,456 |
Balance (in shares) at Dec. 31, 2015 | 1,610,000 | 14,656,394 | ||||||
Issuance of common stock, net | 0 | $ 0 | $ 29,524 | 15,477,118 | 0 | (15,506,642) | 0 | |
Issuance of common stock, net (in shares) | 0 | 2,952,364 | ||||||
Cost of issuing common stock | (2,757) | $ 0 | $ 0 | (2,757) | 0 | 0 | 0 | |
Cost of issuing common stock (in shares) | 0 | 0 | ||||||
Issuance of preferred stock, net | 0 | $ 0 | $ 0 | 0 | 0 | 0 | 0 | |
Issuance of preferred stock, net (in shares) | 0 | 0 | ||||||
Redemption of preferred stock, net | 0 | $ 0 | $ 0 | 0 | 0 | 0 | 0 | |
Redemption of preferred stock, net (in shares) | 0 | 0 | ||||||
Purchase of treasury stock, net | (283,565) | $ 0 | $ (585) | (282,980) | 0 | 0 | 0 | |
Purchase of treasury stock, net (in shares) | 0 | (58,500) | ||||||
Restricted stock compensation expense | 35,785 | $ 0 | $ 0 | 35,785 | 0 | 0 | 0 | |
Restricted stock compensation expense (in shares) | 0 | (11,000) | ||||||
Net income (loss) | (10,426,645) | $ 0 | $ 0 | 0 | 0 | 0 | (10,426,645) | |
Other comprehensive income (loss) | (6,436,169) | |||||||
Increase (decrease) in net unrealized gain on available-for-sale securities, net | (100,937) | 0 | 0 | 0 | (100,937) | 0 | 0 | |
Reclassification adjustment for net gain (loss) included in net income (loss) | (5,589,740) | 0 | 0 | 0 | (5,589,740) | 0 | 0 | |
Reclassification cumulative adjustments for Linked Transactions | 0 | 0 | 0 | 0 | 0 | 0 | 0 | |
Reclassification adjustment for other-than-temporary impairments included in net income (loss) | (745,492) | 0 | 0 | 0 | (745,492) | 0 | ||
Common dividends declared | (14,392,276) | 0 | 0 | 0 | 0 | (14,392,276) | 0 | |
Preferred dividends declared | (3,522,036) | 0 | 0 | 0 | 0 | (3,522,036) | 0 | |
Balance at Dec. 31, 2016 | $ 142,466,865 | [1] | $ 37,156,972 | $ 175,348 | $ 204,264,868 | $ (6,831,940) | $ (89,224,194) | $ (3,074,189) |
Balance (in shares) at Dec. 31, 2016 | 1,610,000 | 17,539,258 | ||||||
[1] | Our consolidated balance sheets include assets and liabilities of consolidated variable interest entities (“VIE's) as the Company is the primary beneficiary of these VIEs. As of December 31, 2016 and December 31, 2015, assets of consolidated VIEs totaled $1,369,120,941 and $1,868,482,556, respectively, and the liabilities of consolidated VIEs totaled $1,344,404,080 and $1,750,916,265, respectively |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) | 12 Months Ended | ||||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |||
Cash flows from operating activities: | |||||
Net income (loss) | $ (10,426,645) | $ 450,479 | $ 3,313,786 | ||
Adjustments to reconcile net income (loss) to net cash provided by operating activities: | |||||
Other-than-temporary impairment charges | (561,702) | 3,636,431 | 0 | ||
Amortization/accretion of available-for-sale securities premiums and discounts, net | (6,751,667) | (13,210,849) | (4,705,639) | ||
Realized (gain) loss on sale of investments, net | 7,216,137 | 533,832 | 3,877,356 | ||
Realized (gain) loss on derivative contracts | 3,089,001 | 12,024,730 | 18,214,460 | ||
Realized (gain) loss on mortgage loans held-for-sale | (94,187) | (1,216,314) | 776,971 | ||
Unrealized (gain) loss on fair value option securities | 8,406,934 | 1,041,649 | 0 | ||
Unrealized (gain) loss on Linked Transactions, net | 0 | 0 | 1,966,726 | ||
Unrealized (gain) loss on derivative contracts | (5,495,463) | (4,909,858) | 2,931,249 | ||
Unrealized (gain) loss on mortgage loans held-for-sale | 151,023 | 197,179 | (329,728) | ||
Unrealized (gain) loss on mortgage servicing rights | 827,864 | 671,957 | 0 | ||
Unrealized (gain) loss on multi-family loans held in securitization trusts | 5,219,530 | (6,097,000) | (1,473,485) | ||
Unrealized (gain) loss on residential loans held in securitization trusts | (404,720) | 8,153,474 | (3,059,647) | ||
Restricted stock compensation expense | 35,785 | 63,275 | 13,457 | ||
Net change in: | |||||
Accrued interest receivable | (707,019) | 1,204,188 | (1,874,785) | ||
Deferred offering costs | (96,489) | 945,661 | 187,457 | ||
Dividends receivable | 25,900 | (26,022) | 0 | ||
Other assets | (244,441) | (458,869) | (5,052) | ||
Accrued interest payable | 119,993 | (693,848) | 501,584 | ||
Deferred income | 203,743 | 0 | 0 | ||
Fees and expenses payable to Manager | 37,097 | (219,097) | 732,000 | ||
Other accounts payable and accrued expenses | 1,790,336 | (27,522) | (322,485) | ||
Net cash provided by operating activities | 2,341,010 | 2,063,476 | 20,744,225 | ||
Cash flows from investing activities: | |||||
Purchase of available-for-sale securities | (585,984,081) | (241,590,864) | (521,681,124) | ||
Purchase of mortgage loans held-for-sale | (14,772,535) | (502,308,627) | (451,629,615) | ||
Purchase of mortgage servicing rights | 0 | (4,940,630) | 0 | ||
Purchase of FHLBI stock | 0 | (2,403,000) | 0 | ||
Proceeds from sales of available-for-sale securities | 263,153,843 | 333,672,932 | 296,246,293 | ||
Proceeds from mortgage loans held-for-sale | 22,490,929 | 531,673,280 | 388,053,342 | ||
Proceeds from FHLBI stock | 2,403,000 | 0 | 0 | ||
Net proceeds from (payments for) derivative contracts | (3,089,001) | (11,940,730) | (17,878,460) | ||
Principal payments from available-for-sale securities | 96,655,967 | 70,476,212 | 45,077,314 | ||
Principal payments from mortgage loans held-for-sale | 275,636 | 15,432,462 | 8,450,648 | ||
Investment related receivable | (2,323,115) | 0 | 506,892 | ||
Restricted cash | (2,180,584) | 3,226,007 | 1,942,528 | ||
Due to broker | 4,244,678 | 0 | 0 | ||
Net cash (used in) provided by investing activities | (219,125,263) | 191,297,042 | (250,912,182) | ||
Cash flows from financing activities: | |||||
Proceeds from issuance of common stock | 15,503,885 | 0 | 79,263,318 | ||
Net proceeds from issuance of preferred stock | 0 | 0 | 19,096,074 | ||
Purchase of treasury stock | (283,565) | (358,991) | 0 | ||
Change in deferred offering costs | 0 | 0 | (1,133,118) | ||
Dividends paid on common stock | (29,898,918) | (19,874,663) | (18,229,875) | ||
Dividends paid on preferred stock | (3,522,036) | (3,522,036) | (2,890,665) | ||
Proceeds from repurchase agreements - available-for-sale securities | 7,940,492,000 | 5,951,792,999 | 4,528,080,286 | ||
Proceeds from repurchase agreements - mortgage loans held-for-sale | 16,405,081 | 66,937,322 | 401,295,517 | ||
Proceeds from FHLBI advances | 0 | 155,497,000 | 0 | ||
Payments for FHLBI advances | (49,697,000) | (105,800,000) | 0 | ||
Principal repayments of repurchase agreements - available-for-sale securities | (7,644,912,000) | (6,136,468,999) | (4,395,638,286) | ||
Principal repayments of repurchase agreements - mortgage loans held-for-sale | (25,909,538) | (107,696,717) | (351,031,665) | ||
Net cash (paid) on securities underlying Linked Transactions | 0 | 0 | (117,544,275) | ||
Net cash received from repurchase agreements underlying Linked Transactions | 0 | 0 | 88,112,000 | ||
Net cash (used in) provided by financing activities | 218,177,909 | (199,494,085) | 229,379,311 | ||
Net increase (decrease) in cash and cash equivalents | 1,393,656 | (6,133,567) | (788,646) | ||
Cash and cash equivalents, beginning of period | 26,140,718 | [1] | 32,274,285 | 33,062,931 | |
Cash and cash equivalents, end of period | 27,534,374 | [1] | 26,140,718 | [1] | 32,274,285 |
Supplemental disclosure of cash flow information | |||||
Cash paid for interest | 6,355,591 | 8,554,565 | 4,363,706 | ||
Non-cash investing and financing activities information | |||||
Dividends declared but not paid at end of period | 39,132 | [1] | 39,132 | [1] | 39,132 |
Net change in unrealized gain (loss) on available-for-sale securities | (6,436,169) | (7,604,122) | 18,303,304 | ||
Consolidation of multi-family loans held in securitization trusts | 1,227,523,075 | 1,455,155,339 | 1,677,847,006 | ||
Consolidation of residential loans held in securitization trusts | 141,597,866 | 413,327,217 | 507,423,695 | ||
Consolidation of multi-family securitized debt obligations | 1,209,181,035 | 1,369,124,789 | 1,676,373,521 | ||
Consolidation of residential securitized debt obligations | 135,223,045 | 381,791,476 | 433,698,636 | ||
MBS securities recorded upon adoption of revised accounting standard for repurchase agreement financing | 0 | 210,238,658 | 0 | ||
Repurchase agreements recorded upon adoption of revised accounting standard for repurchase agreement financing | $ 0 | $ 149,293,000 | $ 0 | ||
[1] | Our consolidated balance sheets include assets and liabilities of consolidated variable interest entities (“VIE's) as the Company is the primary beneficiary of these VIEs. As of December 31, 2016 and December 31, 2015, assets of consolidated VIEs totaled $1,369,120,941 and $1,868,482,556, respectively, and the liabilities of consolidated VIEs totaled $1,344,404,080 and $1,750,916,265, respectively |
ORGANIZATION AND BUSINESS OPERA
ORGANIZATION AND BUSINESS OPERATIONS | 12 Months Ended |
Dec. 31, 2016 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Organization, Consolidation and Presentation of Financial Statements Disclosure [Text Block] | NOTE 1 – ORGANIZATION AND BUSINESS OPERATIONS Five Oaks Investment Corp. (the “Company”) is a Maryland corporation focused primarily on investing in, financing and managing residential mortgage-backed securities (“RMBS”), multi-family mortgage backed securities (“Multi-Family MBS”, and together with RMBS, “MBS”), mortgage servicing rights and other mortgage-related investments. The Company is externally managed by Oak Circle Capital Partners LLC (the “Manager”), an asset management firm incorporated in Delaware. The Company’s common stock is listed on the NYSE under the symbol “OAKS.” The Company was incorporated on March 28, 2012 and commenced operations on May 16, 2012. The Company began trading as a publicly traded company on March 22, 2013. The Company has elected to be taxed as a real estate investment trust (“REIT”) and to comply with Sections 856 through 859 of the Internal Revenue Code of 1986, as amended, the ("Code"). Accordingly, the Company generally will not be subject to U.S. federal income tax to the extent of its distributions to stockholders and as long as certain asset, income and share ownership tests are met. The Company invests in Agency RMBS, which are RMBS for which the principal and interest payments are guaranteed by a U.S. Government agency such as the Government National Mortgage Association or a U.S. Government-sponsored entity such as the Federal National Mortgage Association or the Federal Home Loan Mortgage Corporation. The Company also invests in Non-Agency RMBS, which are RMBS that are not guaranteed by a U.S. Government agency or a U.S. Government-sponsored entity. Additionally, the Company invests in Multi-Family MBS, which are MBS for which the principal and interest may be sponsored by a U.S. Government agency such as the Government National Mortgage Association or a U.S. Government-sponsored entity such as the Federal National Mortgage Association or the Federal Home Loan Mortgage Corporation, or may not be sponsored by a U.S. Government agency or a U.S. Government-sponsored entity. The Company also invests in mortgage servicing rights, and may also invest in other mortgage-related investments. On June 10, 2013, the Company established Five Oaks Acquisition Corp. (“FOAC”) as a wholly owned taxable REIT subsidiary (“TRS”), for the acquisition and disposition of residential mortgage loans. The Company consolidates this subsidiary under generally accepted accounting principles in the United States of America (“GAAP”). On April 30, 2014, the Company established Five Oaks Insurance LLC (“FOI”) as a wholly owned subsidiary. The Company consolidates this subsidiary under GAAP. FOI was dissolved on July 18, 2016. In December 2014, and October 2014, respectively, the Company acquired first loss tranches issued or backed by two Freddie Mac-sponsored Multi-Family MBS K series securitizations (the “FREMF 2011-K13 Trust” and the “FREMF 2012-KF01 Trust”). The Company determined that each of the trusts was a variable interest entity (“VIE”) and that in each case the Company remains the primary beneficiary, and accordingly consolidated the assets and liabilities of the trusts into the Company’s financial statements in accordance with GAAP. On April 21, 2016, and April 26, 2016, respectively, the Company completed two re-securitization transactions (the “Re-REMIC transactions”). The Company consolidates the assets and liabilities of the newly established trusts, in each case based upon the Company’s purchase of first-loss securities of the Re-REMIC transactions. Accordingly, the Company has determined that it remains the primary beneficiary of the underlying trusts and continues to consolidate the assets and liabilities of each underlying trust. In October 2014, and December 2014, respectively, the Company also acquired first loss and subordinated tranches issued by two residential mortgage-backed securitizations (the “JPMMT 2014-OAK4 Trust” and the “CSMC 2014-OAK1 Trust”). During the second quarter of 2016, the Company sold the first loss and subordinated tranches issued by the JPMMT 2014-OAK4 Trust, and as a result, having determined that it is no longer the primary beneficiary of the trust, and accordingly no longer consolidates the assets and liabilities of that trust. The Company determined that CSMC 2014-OAK1 Trust was a VIE and that the Company continues to be the primary beneficiary, and accordingly consolidated the assets and liabilities of the trust into the Company’s financial statements in accordance with GAAP. On March 23, 2015, the Company established Oaks Funding LLC as a wholly owned subsidiary of FOAC, to fulfill certain functions as depositor in respect of residential mortgage loan securitization transactions. The Company consolidates this subsidiary under GAAP. On April 20, 2016, the Company established Oaks Funding II LLC as a wholly owned subsidiary of FOAC, to fulfill certain functions as depositor in respect of certain Re-REMIC transactions. The Company consolidates this subsidiary under GAAP. On April 20, 2016, the Company established Oaks Holding I LLC as a wholly owned subsidiary to hold certain investment securities. The Company consolidates this subsidiary under GAAP. |
SUMMARY OF SIGNIFICANT ACCOUNTI
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 12 Months Ended |
Dec. 31, 2016 | |
Accounting Policies [Abstract] | |
Significant Accounting Policies [Text Block] | NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Basis of Presentation These financial statements have been prepared in accordance with U.S. GAAP and are expressed in United States dollars. The consolidated financial statements of the Company include the accounts of its subsidiaries. Principles of Consolidation The accompanying consolidated financial statements of the Company include the accounts of the Company and all its subsidiaries which are majority-owned, controlled by the Company or a variable interest entity where the Company is the primary beneficiary. All significant intercompany transactions have been eliminated on consolidation. VIEs An entity is referred to as a VIE if it lacks one or more of the following characteristics: (1) sufficient equity at risk to finance its activities without additional subordinated financial support provided by any parties, including the equity holders; (2) as a group the holders of the equity investment at risk have (a) the power, through voting rights or similar rights, to direct the activities of a legal entity that most significantly impacts the entity's economic performance, (b) the obligation to absorb the expected losses of the legal entity and (c) the right to receive the expected residual returns of the legal entity; and (3) the voting rights of these investors are proportional to their obligations to absorb the expected losses of the entity, their rights to receive the expected returns of their equity, or both, and whether substantially all of the entity's activities involve or are conducted on behalf of an investor that has disproportionately fewer voting rights. An investment that lacks one or more of the above three characteristics is considered to be a VIE. The Company reassesses its initial evaluation of an entity as a VIE based upon changes in the facts and circumstances pertaining to the VIE. VIEs are required to be consolidated by their primary beneficiary. The primary beneficiary of a VIE is determined to be the party that has both the power to direct the activities that most significantly impact the VIE's economic performance and the obligation to absorb losses of, or the right to receive benefits from, the VIE that could potentially be significant to the VIE. This determination may involve complex and subjective analyses. In general, the obligation to absorb losses is a function of holding a majority of the first loss tranche, while the ability to direct the activities that most significantly impact the VIEs economic performance will be determined based upon the rights associated with acting as the directing certificate holder, or equivalent, in a given transaction. The Company is required to reconsider its evaluation of whether to consolidate a VIE each reporting period based upon changes in the facts and circumstances pertaining to the VIE. The Company has evaluated its Non-Agency RMBS and Multi-Family MBS investments to determine if each represents a variable interest in a VIE. The Company monitors these investments and analyzes them for potential consolidation. The Company's real estate securities investments represent variable interests in VIEs. At December 31, 2016, the Company determined that it continues to be the primary beneficiary of two Multi-Family MBS transactions (FREMF 2011-K13 and FREMF 2012-KF01), and one residential mortgage loan transaction (CSMC 2014-OAK1), in each case based on its power to direct the trust’s activities and its obligations to absorb losses derived from the ownership of the first-loss tranches. In the case of the FREMF 2011-K13 and the FREMF 2012-KF01 trusts, the Company determined that it is the primary beneficiary of certain intermediate trusts that have the power to direct the activities and the obligations to absorb losses of the underlying trusts. Accordingly, the Company consolidated the assets, liabilities, income and expenses of each of the underlying trusts, and has elected the fair value option in respect of the assets and liabilities of each trust. However, the Company’s maximum exposure to loss from consolidated trusts was $24,716,861 and $117,566,291, respectively, at December 31, 2016, and December 31, 2015. At December 31, 2016 and December 31, 2015, with the exception of the above transactions, the maximum exposure of the Company to VIEs was limited to the fair value of its investment in Non-Agency RMBS and Multi-Family MBS as disclosed in Note 4 (Non-Agency RMBS $7,592,802 and $92,107,727 respectively, and Multi-Family MBS $73,146,566 and $104,025,797, respectively). GAAP also requires us to consider whether securitizations we sponsor and other transfers of financial assets should be treated as sales or financings. During the year ended December 31, 2015, the Company transferred residential mortgage loans with an aggregate unpaid principal balance of $518,455,163 to Oaks Mortgage Trust Series 2015-1 and Oaks Mortgage Trust 2015-2, and accounted for these transfers as sales for financial reporting purposes, in accordance with Accounting Standards Codification (“ASC”) 860. The Company also determined that it was not the primary beneficiary of these VIEs because it lacked the power to direct the activities that will have the most significant economic impact on the entities. The Company’s analysis incorporates the considerations applicable to Consolidation (Topic 810). The Company’s determination involves complex and subjective analysis resulting from the various legal and structural aspects of each transaction. This analysis has focused in particular on ASC 810-10-25-38C and 25-38D, along with ASC 810-10-25-38G and ASC 810-10-15-13A and 15-13B. The Company’s maximum exposure to loss from these VIEs was limited to the fair value of its investments in Non-Agency RMBS issued by the two VIEs, with an aggregate fair value of $4,413,403 at December 31, 2016 (December 31, 2015: $30,383,343). This amount is included in Available-for-sale (“AFS”) securities on the Company’s consolidated balance sheet. The Company is party to customary and standard repurchase obligations in respect of loans that it has sold to the two VIEs to the extent they have breached standard representations and warranties, but is not a party to arrangements to provide financial support to the VIEs that the Company believes could expose it to additional loss. Use of Estimates The financial statements have been prepared on the accrual basis of accounting in accordance with GAAP. The preparation of financial statements in conformity with GAAP requires the Company to make a number of significant estimates. These include estimates of fair value of certain assets and liabilities, amount and timing of credit losses, prepayment rates, and other estimates that affect the reported amounts of certain assets and liabilities as of the date of the financial statements and the reported amounts of certain revenues and expenses during the reported period. It is likely that changes in these estimates (e.g. valuation changes due to supply and demand, credit performance, prepayments, interest rates, or other reasons) will occur in the near term. The Company’s estimates are inherently subjective in nature and actual results could differ from its estimates and the differences may be material. Cash and Cash Equivalents Cash and cash equivalents include cash held in bank accounts on an overnight basis and other short term deposit accounts with banks having original maturities of 90 days or less. The Company maintains its cash and cash equivalents in highly rated financial institutions, and at times these balances exceed insurable amounts. Restricted Cash Restricted cash represents the Company’s cash held by counterparties as collateral against the Company’s securities, derivatives and/or repurchase agreements. Cash held by counterparties as collateral is not available to the Company for general corporate purposes, but may be applied against amounts due to securities, derivatives or repurchase counterparties or returned to the Company when the collateral requirements are exceeded or, at the maturity of the derivative or repurchase agreement. Deferred Income Certain service revenues received in the period are recorded as a liability in the Company’s consolidated balance sheets in the line item “Deferred income”, for subsequent recognition as income in the Company’s consolidated statements of operations. Deferred Offering Costs In accordance with ASC Subtopic 505-10, the direct costs incurred to issue shares classified as equity, such as legal and accounting fees, should be deducted from the related proceeds and the net amount recorded as stockholders’ equity. Accordingly, payments made by the Company in respect of such costs related to the issuance of shares are recorded as an asset in the accompanying consolidated balance sheets in the line item “Deferred offering costs”, for subsequent deduction from the related proceeds upon closing of the offering. To the extent that certain costs, in particular legal fees, are known to have been accrued but have not yet been invoiced and paid, they are included in “Other accounts payable and accrued expenses” on the accompanying consolidated balance sheets. Deferred Securitization Costs Certain direct costs previously associated with the acquisition of residential mortgage loans were payable by the Company in advance of the subsequent securitization of these loans. To the extent that such costs, if any, were expected to be recovered at the time of a forthcoming securitization, payments made by the Company in respect of such costs if any are recorded as an asset in the Company’s consolidated balance sheets in the line item “Deferred securitization costs”, for subsequent deduction from the securitization proceeds upon the closing of that securitization. Available-for-Sale Securities, at Fair Value Revenue Recognition, Premium Amortization, and Discount Accretion Interest income on the Company’s AFS securities portfolio, with the exception of Non-Agency RMBS IOs (as further described below), is accrued based on the actual coupon rate and the outstanding principal balance of such securities. The Company recognizes interest income using the effective interest method for all AFS securities. As such, premiums and discounts are amortized or accreted into interest income over the lives of the securities in accordance with ASC 310-20, “Nonrefundable Fees and Other Costs”, ASC 320-10, “Investments - Debt and Equity Securities” or ASC 325-40, “Beneficial Interests in Securitized Financial Assets”, as applicable. Total interest income is recorded in the “Interest Income” line item on the consolidated statements of operations. On at least a quarterly basis for securities accounted for under ASC 320-10 and ASC 310-20 (generally Agency RMBS), prepayments of the underlying collateral must be estimated, which directly affect the speed at which the Company amortizes such securities. If actual and anticipated cash flows differ from previous estimates; the Company recognizes a “catch-up” adjustment in the current period to the amortization of premiums for the impact of the cumulative change in the effective yield through the reporting date. Similarly, the Company also reassesses the cash flows on at least a quarterly basis for securities accounted for under ASC 325-40 and ASC 310-30 (generally Non-Agency RMBS and Multi-Family MBS). In estimating these cash flows, there are a number of assumptions that are subject to uncertainties and contingencies. These include the rate and timing of principal and interest receipts (including assumptions of prepayments, repurchases, defaults and liquidations), the pass-through or coupon rate and interest rate fluctuations. In addition, interest payment shortfalls due to delinquencies on the underlying mortgage loans have to be judgmentally estimated. Differences between previously estimated cash flows and current actual and anticipated cash flows are recognized prospectively through an adjustment of the yield over the remaining life of the security based on the current amortized cost of the investment as adjusted for credit impairment, if any. For investments purchased with evidence of deterioration of credit quality for which it is probable, at acquisition, that the Company will be unable to collect all contractually required payments receivable, the Company applies the provisions of ASC 310-30, “Loans and Debt Securities Acquired with Deteriorated Credit Quality.” ASC 310-30 addresses accounting for differences between contractual cash flows and cash flows expected to be collected from an investor’s initial investment in loans or debt securities acquired in a transfer if those differences are attributable, at least in part, to credit quality. ASC 310-30 limits the yield that may be accreted (accretable yield) to the excess of the investor’s estimate of undiscounted expected principal, interest and other cash flows (cash flows expected at acquisition to be collected) over the investor’s initial investment in the loan. ASC 310-30 requires that the excess of contractual cash flows over cash flows expected to be collected (nonaccretable difference) not be recognized as an adjustment of yield, loss accrual or valuation allowance. Subsequent increases in cash flows expected to be collected are generally recognized prospectively through adjustment of the investment’s yield over its remaining life. Decreases in cash flows expected to be collected are recognized as impairment to the extent that such decreases are due, at least in part, to an increase in credit loss expectations (“credit impairment”). To the extent that decreases in cash flows expected to be collected are the result of factors other than credit impairment, for example a change in rate of prepayments, such changes are generally recognized prospectively through adjustment of the investment’s yield over its remaining life. The Company’s accrual of interest, discount and premium for U.S. federal and other tax purposes is likely to differ from the financial accounting treatment of these items as described above. Gains and losses from the sale of AFS securities are recorded as realized gains (losses) within realized gain (loss) on sale of investments, net in the Company's consolidated statements of operations. Upon the sale of a security, the Company will determine the cost of the security and the amount of unrealized gains or losses to reclassify out of accumulated other comprehensive income (loss) into earnings based on the specific identification method. Unrealized gains and losses on the Company’s AFS securities are recorded as unrealized gain (loss) on available-for-sale securities, net in the Company's consolidated statements of comprehensive income (loss). Impairment The Company evaluates its MBS, on a quarterly basis, to assess whether a decline in the fair value of an AFS security below the Company's amortized cost basis is an other-than-temporary impairment (“OTTI”). The presence of OTTI is based upon a fair value decline below a security's amortized cost basis and a corresponding adverse change in expected cash flows due to credit related factors as well as non-credit factors, such as changes in interest rates and market spreads. Impairment is considered other-than-temporary if an entity (i) intends to sell the security, (ii) will more likely than not be required to sell the security before it recovers in value or (iii) does not expect to recover the security's amortized cost basis, even if the entity does not intend to sell the security. Under these scenarios, the impairment is other-than-temporary and the full amount of impairment should be recognized currently in earnings and the cost basis of the investment security is adjusted. However, if an entity does not intend to sell the impaired debt security and it is more likely than not that it will not be required to sell before recovery, an OTTI should be recognized to the extent that a decrease in future cash flows expected to be collected is due, at least in part, to an increase in credit impairment. A decrease in future cash flows due to factors other than credit, for example a change in the rate of prepayments, is considered a non-credit impairment. The full amount of the difference between the security’s previous and new cost basis resulting from credit impairment is recognized currently in earnings, and the difference between the new amortized cost basis and the cash flows expected to be collected is accreted as interest income in accordance with the effective interest method. Decreases in cash flows expected to be collected resulting from non-credit impairment are generally recognized prospectively through adjustment of the investment’s yield over its remaining life. Mortgage Loans Held-for-Sale, at Fair Value Mortgage loans held-for-sale are reported at fair value as a result of a fair value option election. See Note 3 - Fair Value Measurements for details on fair value measurement. Mortgage loans are currently classified as held-for-sale based upon the Company’s intent to sell them either in the secondary whole loan market or to include them in a securitization, including transfers to a securitization entity that the Company sponsors and expects them to be accounted for as sales for financial reporting purposes. Interest income on mortgage loans held-for-sale is recognized at the loan coupon rate. Interest income recognition is suspended when mortgage loans are placed on non-accrual status. The accrual of interest on loans is discontinued when, in management’s opinion, the interest is considered non-collectible, and in all cases when payment becomes greater than 90 days past due. Loans return to accrual status when principal and interest become current and are anticipated to be fully collectible. Multi-Family and Residential Mortgage Loans Held in Securitization Trusts Multi-family and residential mortgage loans held in consolidated securitization trusts are comprised of multi-family mortgage loans held in the FREMF 2011-K13 Trust and the FREMF 2012-KF01 Trust, and residential mortgage loans held in the CSMC 2014-OAK1 Trust, as of December 31, 2016. Based on a number of factors, the Company determined that it was the primary beneficiary of the VIEs underlying the trusts, met the criteria for consolidation and, accordingly, has consolidated the three trusts, including their assets, liabilities, income and expenses in its financial statements. The Company has elected the fair value option on each of the assets and liabilities held within the trusts. See Note 3 - Fair Value Measurement below for additional detail. As the result of the Company’s determination that it is not the primary beneficiary of JPMMT 2014-OAK4 Trust, Oaks Mortgage Trust Series 2015-1 and Oaks Mortgage Trust Series 2015-2, it does not consolidate these trusts. Interest income on multi-family and residential mortgage loans held in securitization trusts is recognized at the loan coupon rate. Interest income recognition is suspended when mortgage loans are placed on non-accrual status. The accrual of interest on loans is discontinued when, in management’s opinion, the interest is considered non-collectible, and in all cases when payment becomes greater than 90 days past due. Loans return to accrual status when principal and interest become current and are anticipated to be fully collectible Mortgage Servicing Rights and Excess Servicing Rights, at Fair Value Mortgage servicing rights (“MSRs”) are associated with residential mortgage loans that the Company has historically purchased and subsequently sold or securitized. MSRs are held and managed at the Company’s TRS. As the owner of MSRs, the Company is entitled to receive a portion of the interest payments from the associated residential mortgage loan, and is obligated to service directly or through a subservicer, the associated loan. MSRs are reported at fair value as a result of a fair value option election. See Note 3 - Fair Value Measurement below for additional detail. Residential mortgage loans for which the Company owns the MSRs are directly serviced by one or more sub-servicers retained by the Company, since the Company does not directly service any residential mortgage loans. MSR income is recognized at the contractually agreed rate, net of the costs of sub-servicers retained by the Company. If a sub-servicer with which the Company contracts were to default, an evaluation of MSR assets for impairment would be undertaken at that time. To the extent that the Company determines it is the primary beneficiary of a residential mortgage loan securitization trust into which it has sold loans, any associated MSRs are eliminated on the consolidation of the trust. The trust is contractually obligated to pay a portion of the interest payments from the associated residential mortgage loans for the direct servicing of the loans, and after deduction of sub-servicing fees payable to contracted sub-servicers, the net amount, excess servicing rights, represents a liability of the trust. See Note 3 - Fair Value Measurement below for additional detail. Non-Agency RMBS IOs, at Fair Value Non-Agency RMBS IOs that the Company owns are associated with residential mortgage loan securitizations that the Company sponsors, and are reported at fair value as a result of a fair value option election. See Note 3 - Fair Value Measurements for details on fair value measurement. Interest income on IOs is recognized at the contractually agreed rate, and changes in fair value are recognized in the Company’s consolidated statement of operations. Repurchase Agreements The Company finances the acquisition of certain of its mortgage-backed securities through the use of repurchase agreements. The repurchase agreements are generally short-term debt, which expire within one year. Borrowings under repurchase agreements generally bear interest rates at a specified margin over LIBOR and are generally uncommitted. In accordance with ASC 860 “Transfers and Servicing” the Company accounts for the repurchase agreements, other than those that were treated as Linked Transactions (see Note 3 - Accounting for Derivative Financial Instruments - Non-Hedging Activity/Linked Transactions below), as collateralized financing transactions and they are carried at their contractual amounts, as specified in the respective agreements. The contractual amounts approximate fair value due to their short-term nature. Residential Loan Warehouse Facilities The Company previously financed the acquisition of certain of its residential mortgage loans through the use of short-term, uncommitted residential loan warehouse facilities, which were structured as repurchase agreements. The Company accounted for outstandings under these facilities as collateralized financing transactions which were carried at their contractual amounts, and approximated fair value due to their short-term nature. Secured Loans In February 2015, the Company’s wholly owned subsidiary, FOI, became a member of the Federal Home Loan Bank of Indianapolis (“FHLBI”). As a member of FHLBI, FOI borrowed funds from FHLBI in the form of secured advances (“FHLB advances”). FHLB advances are treated as secured financing transactions and are carried at their contractual amounts. In connection with FHLB advances, FOI was required to purchase FHLBI stock, which is recorded on the Company’s consolidated balance sheet as an asset. See Note 10 for a further discussion of the Company’s FHLB advances and Note 3 for a description of the Company’s FHLB stock balance. Multi-Family and Residential Securitized Debt Obligations Multi-family and residential securitized debt obligations represent third-party liabilities of the FREMF 2011-K13 Trust, FREMF 2012-KF01 Trust and CSMC 2014-OAK1 Trust, and excludes liabilities of the trust acquired by the Company that are eliminated on consolidation. The third-party obligations of each trust do not have any recourse to the Company as the consolidator of each trust. Backstop Guarantees The Company, through FOAC and in return for fees, provides seller eligibility and backup guarantee services in respect of residential mortgage loans that are traded through one or more loan exchanges operated by MAXEX LLC (“MAXEX”). See Note 14 and Note 15 for additional information regarding MAXEX. To the extent that a loan seller approved by FOAC fails to honor its obligations to repurchase one or more loans based on an arbitration finding that such seller has breached its representations and warranties, FOAC provides a backstop guarantee of the repurchase obligation. The Company has evaluated its backstop guarantees pursuant to ASC 460, Guarantees, and has determined them to be performance guarantees, for which ASC 460 contains initial recognition and measurement requirements, and related disclosure requirements. FOAC is obligated in two respects: (i) a noncontingent liability, which represents FOAC’s obligation to stand ready to perform under the terms of the guarantee in the event that the specified triggering event(s) occur; and (ii) the contingent liability, which represents FOAC’s obligation to make future payments if those triggering events occur. FOAC recognizes the noncontingent liability at the inception of the guarantee at the fair value, which is the fee received or receivable, and is recorded on the Company’s consolidated balance sheet as a liability in the line item “Deferred income.” The Company amortizes these fees into income on a straight-line basis over five years, based on an assumed constant prepayment rate of 15% for residential mortgage loans and other observable data. The Company’s contingent liability is accounted for pursuant to ASC 450, Contingencies, pursuant to which the contingent liability must be recognized when its payment becomes probable and reasonably estimable. Common Stock At December 31, 2016, and December 31, 2015, the Company was authorized to issue up to 450,000,000 shares of common stock, par value $0.01 per share, with such designations, voting and other rights and preferences as may be determined from time to time by the Company’s Board of Directors. The Company had 17,539,258 shares of common stock issued and outstanding at December 31, 2016 and 14,656,394 at December 31, 2015. Stock Repurchase Program On December 15, 2015, the Company’s Board of Directors authorized a stock repurchase program (“Repurchase Program”), to repurchase up to $10 million of the Company’s outstanding common stock. Subject to applicable securities laws, repurchase of common stock under the Repurchase Program may be made at times and in amounts as the Company deems appropriate, using available cash resources. Shares of common stock repurchased by the Company under the Repurchase Program, if any, will be canceled and, until reissued by the Company, will be deemed to be authorized but unissued shares of common stock. The Repurchase Program may be suspended or discontinued by the Company at any time and without prior notice. Preferred Stock At December 31, 2016, and December 31, 2015, the Company was authorized to issue up to 50,000,000 share of preferred stock, par value $0.01 per share, with such designations, voting and other rights and preferences as may be determined from time to time by the Company’s Board. The Company had 1,610,000 shares of preferred stock issued and outstanding at both December 31, 2016 and December 31, 2015. Income Taxes The Company has elected to be taxed as a REIT under the Code for U.S. federal income tax purposes, commencing with the Company’s short taxable period ended December 31, 2012. So long as the Company qualifies as a REIT, the Company generally will not be subject to U.S. federal income taxes on its taxable income to the extent it annually distributes at least 90% of its net taxable income to stockholders and maintains its qualification as a REIT. In addition to the Company’s election to be taxed as a REIT, the Company complies with Sections 856 through 859 of the Code. Accordingly, the Company generally will not be subject to U.S. federal income tax to the extent of its distributions to stockholders and as long as certain asset, income and share ownership tests are met. To maintain its qualification as a REIT, the Company must distribute at least 90% of its REIT taxable income to its stockholders and meet certain other requirements. The Company may also be subject to certain state, local and franchise taxes. Under certain circumstances, federal income and excise taxes may be due on its undistributed taxable income. If the Company were to fail to meet these requirements, it would be subject to U.S. federal income tax, which could have a material adverse impact on its results of operations and amounts available for distributions to its stockholders. The Company believes it will meet all of the criteria to maintain the Company's REIT qualification for the applicable periods, but there can be no assurance that these criteria will continue to be met in subsequent periods. The Company assesses its tax positions for all open tax years and determines whether the Company has any material unrecognized liabilities in accordance with ASC 740, Income Taxes. The Company records these liabilities to the extent the Company deems them more likely than not to be incurred. The Company's accounting policy with respect to interest and penalties is to classify these amounts as other interest expense. As further described in Note 16, the Company declared and paid in the fourth quarter a deficiency dividend relating to a determination of an inability to offset certain net gains on hedging transactions in 2013 against net capital losses on the sale of certain mortgage-backed securities. In connection with this declaration, the Company provisioned an amount of $1.86 million for interest charges expected to be paid to the IRS following the payment of the dividend. This amount is included in the Company’s consolidated balance sheets in the line item “Other accounts payable and accrued expenses”, and is included in “Other interest expense” in the Company’s consolidated statement of operations. Certain activities of the Company are conducted through a TRS and therefore are taxed as a standalone U.S. C-Corporation. Accordingly, deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. If a TRS generates net income, the TRS can declare dividends to the Company which will be included in its taxable income and necessitate a distribution to its stockholders. Conversely, if the Company retains earnings at a TRS level, no distribution is required and the Company can increase book equity of the consolidated entity. Earnings per Share The Company calculates basic and diluted earnings per share by dividing net income attributable to common stockholders for the period by the weighted-average shares of the Company’s common stock outstanding for that period. Diluted earnings per share takes into account the effect of dilutive instruments, such as warrants, stock options, and unvested restricted stock, but use the average share price for the period in determining the number of incremental shares that are to be added to the weighted-average number of shares outstanding. See Note 16 for details of the computation of basic and diluted earnings per share. Stock-Based Compensation The Company is required to recognize compensation costs relating to stock-based payment transactions in the financial statements. The Company accounts for share-based compensation issued to its Manager and non-management directors using the fair value based methodology prescribed by ASC 505, Equity (“ASC 505”), or ASC 718, Share-Based Payment (“ASC 718”), as appropriate. Compensation cost related to restricted common stock issued to the Manager is initially measured at estimated fair value at the grant date, and is remeasured on subsequent dates to the extent the awards are unvested. Additionally, compensation cost related to restricted common stock issued to the non-management directors is measured at its estimated fair value at the grant date and amortized and expensed over the vesting period |
FAIR VALUE MEASUREMENTS
FAIR VALUE MEASUREMENTS | 12 Months Ended |
Dec. 31, 2016 | |
Fair Value Disclosures [Abstract] | |
Fair Value Disclosures [Text Block] | NOTE 3 – FAIR VALUE MEASUREMENTS The Company discloses the fair value of its financial instruments according to a fair value hierarchy (Levels 1, 2 and 3, as defined). In accordance with GAAP, the Company is required to provide enhanced disclosures regarding instruments in the Level 3 category (which require significant management judgment), including a separate reconciliation of the beginning and ending balances for each major category of assets and liabilities. Additionally, GAAP permits entities to choose to measure many financial instruments and certain other items at fair value (the “fair value option”), and the election of such choice is irrevocable. Unrealized gains and losses on items for which the fair value option has been elected are irrevocably recognized in earnings at each subsequent reporting date. Available-for-sale Securities The Company currently invests in Agency RMBS, Multi-Family MBS and Non-Agency RMBS. Designation The Company classifies its MBS securities as AFS investments. Although the Company generally intends to hold most of its investment securities until maturity, it may, from time to time, sell any of its investment securities as part of the overall management of its portfolio. All assets classified as AFS, except Non-Agency RMBS IOs, are reported at estimated fair value, with unrealized gains and losses, excluding other than temporary impairments, included in accumulated other comprehensive income, a separate component of shareholders' equity. As the result of a fair value election, unrealized gains and losses on Non-Agency RMBS IOs are recorded in the Company’s consolidated statement of operations. Determination of MBS Fair Value The Company determines the fair values for the Agency RMBS, Multi-Family MBS and Non-Agency RMBS in its portfolio based on obtaining a valuation for each Agency RMBS, Multi-Family MBS and Non-Agency RMBS from third-party pricing services, and may also obtain dealer quotes, as described below. The third-party pricing services use common market pricing methods that may include pricing models that may incorporate such factors as coupons, prepayment speeds, spread to the Treasury curves and interest rate swap curves, duration, periodic and life caps and credit enhancement, as applicable. The dealers incorporate common market pricing methods, including a spread measurement to the Treasury curve or interest rate swap curve as well as underlying characteristics of the particular security, including coupon, periodic and life caps, collateral type, rate reset period and seasoning or age of the security, as applicable. The Company obtains pricing data from a primary third-party pricing service for each Agency RMBS, Multi-Family MBS and Non-Agency RMBS. If other available market data indicates that the pricing data from the primary third-party service is materially inaccurate, or pricing data is unavailable from the primary third-party pricing service, the Company undertakes a review of other available prices and takes additional steps to determine fair value. In all cases, the Company validates its understanding of methodology and assumptions underlying the fair value used. The Company determines that the pricing data from the primary third-party service is materially inaccurate if it is not materially representative of where a specific security can be traded in the normal course of business. In making such determination, the Company follows a series of steps, including review of collateral marks from margin departments of repo counterparties, utilization of bid list, inventory list and extensive unofficial market color, review of other third-party pricing service data and a yield analysis of each Multi-Family MBS and Non-Agency RMBS based on the pricing data from the primary third-party pricing service and the Company’s cash flow assumptions. The Company reviews all pricing of Agency and Non-Agency RMBS and Multi-Family MBS used to ensure that current market conditions are properly represented. This review includes, but is not limited to, comparisons of similar market transactions or alternative third-party pricing services, dealer quotes and comparisons to a pricing model. Values obtained from the third-party pricing service for similar instruments are classified as Level 2 securities if the pricing methods used are consistent with the Level 2 definition. If quoted prices for a security are not reasonably available from the pricing service, but dealer quotes are, the Company classifies the security as a Level 2 security. If neither is available, the Company determines the fair value based on characteristics of the security that are received from the issuer and based on available market information received from dealers and classifies it as a Level 3 security. Mortgage Loans Held-for-Sale Designation The Company currently classifies its residential mortgage loans as held-for-sale (“HFS”) investments. HFS residential mortgage loans include loans that the Company is marketing for sale to third parties, including transfers to securitization trusts. The Company has elected the fair value option for residential mortgage loans it has acquired and classifies as HFS. The fair value option was elected to help mitigate earnings volatility by better matching the asset accounting with any related hedges. The Company’s policy is to record separately interest income on these fair value elected loans. Additionally, upfront costs related to these loans are not deferred or capitalized. Fair value adjustments are reported in unrealized gain (loss) on mortgage loans held-for-sale on the consolidated statements of operations. The fair value option is irrevocable once the loan is acquired. Determination of Mortgage Loan Fair Value The Company determines the fair values of the mortgage loans in its portfolio from third-party pricing services. The third-party pricing services use common market pricing methods which may include pricing models that may incorporate such factors as coupons, prepayment speeds, spread to the Treasury curves and interest rate swap curves, duration, periodic and life caps, as applicable. In addition, the third-party pricing services benchmark their pricing models against observable pricing levels being quoted by a range of market participants active in the purchase and sale of residential mortgage loans. The Company obtains pricing data from a primary third-party pricing service for each mortgage loan. If other available market data indicates that the pricing data from the primary third-party service is materially inaccurate, or pricing data is unavailable from the primary third-party pricing service, the Company undertakes a review of other available prices and takes additional steps to determine fair value. In all cases, the Company validates its understanding of methodology and assumptions underlying the fair value used. The Company determines that the pricing data from the primary third-party service is materially inaccurate if it is not materially representative of the price at which a specific loan can be traded in the normal course of business, and/or is materially divergent from the price at which the Company would be willing to purchase such a loan in the normal course of its business. The Company reviews all pricing of mortgage loans used to ensure that current market conditions are properly represented. This review includes, but is not limited to, comparisons of similar market transactions or alternative third-party pricing services, dealer quotes and comparisons to a pricing model. Values obtained from the third-party pricing service for similar instruments are classified as Level 2 assets if the pricing methods used are consistent with the Level 2 definition. If quoted prices for a loan are not reasonably available from the pricing service, but alternative quotes are, the Company classifies the loan as a Level 2 asset. If neither is available, the Company determines the fair value based on characteristics of the loan and based on other available market information and classifies it as a Level 3 asset. MSRs and Excess Servicing Rights Designation MSRs are associated with residential mortgage loans that the Company has purchased and subsequently sold or securitized, and are typically acquired directly from loan originators and recognized at the time that loans are transferred to a third party or a securitization, in each case providing such transfer meets the GAAP criteria for sale. The Company retains the rights to service certain loans that it sells or securitizes, but employs one or more sub-servicers to perform the servicing activities. To the extent that the Company determines it is the primary beneficiary of a residential mortgage loan securitization trust into which it has sold loans, any associated MSRs are eliminated on the consolidation of the trust. The trust is contractually obligated to pay a portion of the interest payments from the associated residential mortgage loans for the direct servicing of the loans, and after deduction of sub-servicing fees payable to contracted sub-servicers, the net amount, excess servicing rights, represents a liability of the trust. Upon consolidation of the trust, the fair value of the excess servicing rights is equal to the related MSRs held at the Company’s TRS. The Company has elected the fair value option in respect of MSRs and excess servicing rights. Determination of Fair Value The Company determines the fair value of its MSRs and excess servicing rights from third-party pricing services. The third-party pricing services use common market pricing methods that include market discount rates, prepayment speeds of serviced loans, the market cost of servicing, and observed market pricing for MSR purchase and sale transactions. Changes in the fair value of MSRs occur primarily as a result of the collection and realization of expected cashflows, as well as changes in valuation inputs and assumptions. The Company obtains MSR pricing data from a primary third-party pricing service, and validates its understanding of methodology and assumptions underlying the fair value used. Fair values are estimated based on applying inputs to generate the net present value of estimated net servicing income, and as a consequence of the fact that these discounted cash flow models utilize certain significant unobservable inputs and observable MSR purchase and sale transactions are relatively infrequent, the Company classifies MSRs as a Level 3 asset. See Note 12 for a further presentation on MSRs. Multi-Family Mortgage Loans Held in Securitization Trusts and Multi-Family Securitized Debt Obligations Designation Multi-family mortgage loans held in consolidated securitization trusts are comprised of multi-family mortgage loans held in the FREMF 2011-K13 Trust and the FREMF 2012-KF01 Trust as of December 31, 2016. Based on a number of factors, the Company determined that it was the primary beneficiary of the VIEs underlying the trusts, met the criteria for consolidation and, accordingly, has consolidated the FREMF 2011-K13 Trust and the FREMF 2012-KF01 Trust, including their assets, liabilities, income and expenses in its financial statements. The Company has elected the fair value option on each of the assets and liabilities held within these trusts. Determination of Fair Value As noted, the Company early adopted ASU 2014-13, and has elected the fair value option in respect of the assets and liabilities of the FREMF 2011-K13 Trust and the FREMF 2012-KF01 Trust. The trusts are “static”, that is no reinvestment is permitted and there is very limited active management of the underlying assets. Under the ASU, the Company is required to determine whether the fair value of the financial assets or the fair value of the financial liabilities of each of the trusts is more observable, but in either case, the methodology results in the fair value of the assets of each of the trusts being equal to the fair value of their liabilities. The Company has determined that the fair value of the liabilities of each of the trusts is more observable, since in all cases prices for the liabilities are available from the primary third-party pricing service utilized for Multi-Family MBS, while the individual assets of each of the trusts are inherently incapable of precise measurement given their illiquid nature and the limitations on available information related to these assets. Given that the Company’s methodology for valuing the assets of the trusts is an aggregate value derived from the fair value of the trust liabilities, the Company has determined that the valuation of the trust assets in their entirety should be classified as Level 2 valuations. Residential Mortgage Loans Held in Securitization Trusts and Residential Securitized Debt Obligations Designation Residential mortgage loans held in consolidated securitization trusts are comprised of residential mortgage loans held in the CSMC 2014-OAK1 Trust as of December 31, 2016. Based on a number of factors, the Company determined that it was the primary beneficiary of the VIE underlying the trust, met the criteria for consolidation and, accordingly, has consolidated the CSMC 2014-OAK1 Trust including its assets, liabilities, income and expenses in its financial statements. The Company has elected the fair value option on each of the assets and liabilities held within the trust. As the result of the Company’s determination that it is not the primary beneficiary of JPMMT 2014-OAK4 Trust, Oaks Mortgage Trust Series 2015-1 and 2015-2, it does not consolidate these trusts. Determination of Fair Value As noted earlier, the Company has early adopted ASU 2014-13, and has elected the fair value option in respect of the assets and liabilities of the CSMC 2014-OAK1 Trust. The trust is “static”, that is no reinvestment is permitted and there is very limited active management of the underlying assets. Under the ASU, the Company is required to determine whether the fair value of the financial assets or the fair value of the financial liabilities of the trust is more observable, but in either case, the methodology results in the fair value of the assets of the trust being equal to the fair value of its liabilities. The Company has determined that the fair value of the liabilities of the trust is more observable, since prices for the liabilities are available from the primary third-party pricing service utilized for Non-Agency RMBS, with the exception of the excess servicing rights, which are available from an alternative third-party pricing service. While the individual assets of the trust, i.e. the underlying residential mortgage loans, are capable of being priced, the Company has determined that the pricing of the liabilities is more easily and readily determined. Given that the Company’s methodology for valuing the assets of the trust is an aggregate value derived from the fair value of the trust’s liabilities, the Company has determined that the valuation of the trust assets in their entirety should be classified as Level 2 valuations. Accounting for Derivative Financial Instruments In accordance with FASB guidance ASC 815 “Derivatives and Hedging”, all derivative financial instruments, whether designated for hedging relationships or not, are recorded at fair value on the consolidated balance sheet as assets or liabilities. The Company obtains valuation information for each derivative financial instrument from the related derivative counterparty. If other available market data indicates that the valuation information from the counterparty is materially inaccurate, or pricing data is unavailable from the counterparty, the Company shall undertake a review of other available valuation information, including third party pricing services and/or dealers, and shall take additional steps to determine fair value. The Company reviews all valuations of derivative financial instruments used to ensure that current market conditions are properly represented. This review includes, but is not limited to, comparisons of similar market transactions or alternative third-party pricing services, dealer quotes and comparisons to a pricing model. Values obtained from the derivative counterparty, the third-party pricing service or dealers, as appropriate, for similar instruments are classified as Level 2 valuations if the pricing methods used are consistent with the Level 2 definition. If none of these sources is available, the Company determines the fair value based on characteristics of the instrument and based on available market information received from dealers and classifies it as a Level 3 valuation. At the inception of a derivative contract, the Company determines whether or not the instrument will be part of a qualifying hedge accounting relationship. Due to the volatility of the credit markets and difficulty in effectively matching pricing or cash flows, the Company has elected to treat all current derivative contracts as trading instruments. The changes in fair value of derivatives accounted for as trading instruments are reported in the consolidated statement of operations as unrealized gain (loss) on derivative contracts, net. The Company enters into interest rate derivative contracts for a variety of reasons, including minimizing significant fluctuations in earnings or market values on certain assets or liabilities that may be caused by changes in interest rates. The Company may, at times, enter into various forward contracts, including short securities, Agency to-be-announced securities (“TBAs”), options, futures, swaps and caps. Due to the nature of these instruments, they may be in a receivable/asset position or a payable/liability position at the end of an accounting period. Amounts payable to, and receivable from, the same party under contracts may be offset as long as the following conditions are met: (a) each of the two parties owes the other determinable amounts; (b) the reporting party has the right to offset the amount owed with the amount owed by the other party; (c) the reporting party intends to offset; and (d) the right of offset is enforceable by law. If the aforementioned conditions are not met, amounts payable to and receivable from are presented by the Company on a gross basis in the consolidated balance sheet. Non-Hedging Activity – Linked Transactions With effect from January 1, 2015, ASU 2014-11 changed the basis on which the Company accounts for repurchase to maturity transactions and linked repurchase financings to be consistent with the basis on which the Company accounts for secured borrowings. Accordingly, the assets and repurchase agreements which encompass linked transactions that were previously accounted for on a net basis and recorded as a forward purchase (derivative) contract are now bifurcated, and the gross amounts are reported in available-for-sale securities and repurchase agreements respectively. Prior to adoption of ASU 2014-11, it was presumed that the initial transfer of a financial asset (i.e. the purchase of an MBS by the Company) and contemporaneous repurchase financing of such MBS with the same counterparty were considered part of the same arrangement, or a “linked transaction”, unless certain criteria were met. The two components of a linked transaction (MBS purchase and repurchase financing) were accounted for on a net basis and recorded as a forward purchase (derivative) contract (each a Linked Transaction) at fair value on the Company’s consolidated balance sheet in the line item “Linked Transactions, net, at fair value”. See Note 11 for additional detail on the impact of the adoption of this ASU, including a description of the cumulative effect adjustment to retained earnings of the adoption of the ASU. See Note 11 for specific disclosures regarding the location and amounts of derivative instruments in the financial statements and the accounting for derivative instruments and related hedged items. Other Financial Instruments The carrying value of short term instruments, including cash and cash equivalents, receivables and repurchase agreements whose term is less than twelve months, generally approximates fair value due to the short term nature of the instruments. At December 31, 2016, the Company had redeemed $2,391,700 of its FHLB stock resulting in a remaining balance of $11,300. At December 31, 2016, the remaining balance of $11,300 has been written off by the Company. |
AVAILABLE-FOR-SALE SECURITIES (
AVAILABLE-FOR-SALE SECURITIES (as restated) | 12 Months Ended |
Dec. 31, 2016 | |
Investments, Debt and Equity Securities [Abstract] | |
Investments in Debt and Marketable Equity Securities (and Certain Trading Assets) Disclosure [Text Block] | NOTE 4 – AVAILABLE-FOR-SALE SECURITIES (as restated) The following table presents the Company’s AFS investment securities by collateral type at fair value as of December 31, 2016 and December 31, 2015: December 31, 2016 December 31, 2015 Mortgage-backed securities: Agency Federal Home Loan Mortgage Corporation $ 326,958,046 $ 148,760,159 Federal National Mortgage Association 463,232,187 182,867,134 Government National Mortgage Association - 43,705,764 Non-Agency 7,592,802 92,107,727 Multi-Family 73,146,566 104,025,797 Total mortgage-backed securities $ 870,929,601 $ 571,466,581 The following tables present the amortized cost and fair value of the Company’s AFS investment securities by collateral type as of December 31, 2016 and December 31, 2015: December 31, 2016 Agency Non-Agency (1) Multi-Family Total Face Value $ 779,219,115 $ 4,393,771 $ 100,907,815 $ 884,520,701 Unamortized premium 17,748,138 - - 17,748,138 Unamortized discount Designated credit reserve and OTTI (2) - (1,929,833 ) - (1,929,833 ) Net, unamortized (1,311,292 ) (369,887 ) (26,160,083 ) (27,841,262 ) Amortized Cost 795,655,961 2,094,051 74,747,732 872,497,744 Gross unrealized gain 2,663,975 234,647 509,519 3,408,141 Gross unrealized (loss) (8,129,703 ) - (2,110,685 ) (10,240,388 ) Fair Value $ 790,190,233 $ 2,328,698 $ 73,146,566 $ 865,665,497 December 31, 2015 Agency Non-Agency (1) Multi - Family Total Face Value $ 370,394,525 $ 116,954,842 $ 138,829,925 $ 626,179,292 Unamortized premium 5,745,862 80,257 - 5,826,119 Unamortized discount Designated credit reserve and OTTI (2) - (8,891,565 ) - (8,891,565 ) Net, unamortized (1,929,145 ) (22,101,062 ) (33,250,068 ) (57,280,275 ) Amortized Cost 374,211,242 86,042,472 105,579,857 565,833,571 Gross unrealized gain 3,234,673 1,099,957 913,556 5,248,186 Gross unrealized (loss) (2,112,858 ) (1,808,973 ) (2,467,616 ) (6,389,447 ) Fair Value $ 375,333,057 $ 85,333,456 $ 104,025,797 $ 564,692,310 (1) Non-Agency AFS does not include interest-only securities with a notional amount of $509,109,248, book value of $14,712,374 unrealized loss of $9,448,271 and a fair value of $5,264,104 at December 31, 2016 and a notional amount of $428,230,275, book value of $7,815,919 unrealized loss of $1,041,649 and a fair value of $6,774,271 at December 31, 2015 (2) Discount designated as Credit Reserve and amount related to OTTI are generally not expected to be accreted into interest income. Amounts disclosed reflect Credit Reserve of $1,929,833 and $8,146,073 at December 31, 2016 and December 31, 2015, respectively, and OTTI of ($745,492) and $745,492 at December 31, 2016 and December 31, 2015, respectively. At December 31, 2016, the Company did not intend to sell any of its MBS that were in an unrealized loss position, and it is “more likely than not” that the Company will not be required to sell these MBS before recovery of their amortized cost basis, which may be at their maturity. The Company recognized credit-related OTTI through earnings of $0.56 million $3.64 million on four Non-Agency RMBS during the years ended December 31, 2016 and December 31, 2015, respectively. Non-Agency RMBS on which OTTI is recognized have experienced, or are expected to experience, credit-related adverse cash flow changes, or credit impairment. The Company’s estimate of cash flows for its Non-Agency RMBS is based on its review of the underlying mortgage loans securing these RMBS. The Company considers information available about the structure of the securitization, including structural credit enhancement, if any, and the past and expected future performance of underlying mortgage loans, including timing of expected future cash flows, prepayment rates, default rates, loss severities, delinquency rates, percentage of non-performing loans, FICO scores at loan origination, year of origination, loan-to-value ratios, geographic concentrations, as well as Rating Agency reports, general market assessments, and dialogue with market participants. Significant judgment is used in both the Company’s analysis of the expected cash flows for its Non-Agency RMBS and any determination of OTTI that is the result, at least in part, of credit impairment. The following table present the composition of OTTI charges recorded by the Company for the years ended December 31, 2016, 2015, and 2014: Year Ended December 31, 2016 2015 2014 Cumulative credit loss at beginning of period $ (3,636,431 ) $ - - Additions: Initial (increase) in credit reserves (541,342 ) (745,492 ) - Subsequent (increase) in credit reserves - - Initial additional other-than-temporary credit impairment losses (183,790 ) (2,890,939 ) - Subsequent additional other-than-temporary credit impairment losses - - Reductions: For securities sold decrease in credit reserves 1,286,835 - - For securities sold decrease in other-than-temporary impairment - - - Cumulative credit (loss) at end of period $ (3,074,728 ) $ (3,636,431 ) - Unrealized losses on the Company’s legacy Non-Agency RMBS were $0.0 million at December 31, 2016 (2015: $1.8 million; 2014: $12,611). The following table presents the components comprising the carrying value of AFS securities not deemed to be other than temporarily impaired by length of time the securities had an unrealized loss position as of December 31, 2016, and December 31, 2015. At December 31, 2016 the Company held 46 AFS securities, of which 31 were in an unrealized loss position for less than twelve consecutive months and five were in an unrealized loss for more than twelve months. All of these securities were either Agency RMBS or Multi-Family MBS. As such, credit-related adverse cash flow changes are not applicable and consequently no OTTI is recognized. At December 31, 2015, the Company held 67 AFS securities, of which 35 were in an unrealized loss position for less than twelve consecutive months and five were in an unrealized loss position for more than twelve months. Less than 12 months Greater than 12 months Total Estimated Fair Value Gross Unrealized Losses Estimated Fair Value Gross Unrealized Losses Estimated Fair Value Gross Unrealized Losses December 31, 2016 $ 619,414,077 $ (8,129,704 ) $ 45,879,433 $ (2,110,684 ) $ 665,293,510 $ (10,240,388 ) December 31, 2015 $ 348,120,251 $ (5,983,726 ) $ 6,939,257 $ (405,720 ) $ 355,059,508 $ (6,389,446 ) To the extent the Company determines there are likely to be decreases in cash flows expected to be collected, and as a result of non-credit impairment, such changes are generally recognized prospectively through adjustment of the security’s yield over its remaining life. The following table presents a summary of the Company’s net realized gain (loss) from the sale of AFS securities, inclusive of securities previously booked as linked, for the years ended December 2016, December 2015, and December 2014. December 31, 2016 December 31, 2015 December 31, 2014 AFS securities sold, at cost $ 268,849,640 $ 267,741,325 $ 462,470,753 Proceeds from AFS securities sold 263,143,871 267,567,905 466,239,975 Net realized gain (loss) on sale of AFS securities $ (5,705,769 ) $ (173,420 ) $ 3,769,222 The following tables present the fair value of AFS investment securities by rate type as of December 31, 2016 and December 31, 2015: December 31, 2016 Agency Non-Agency Multi-Family Total Adjustable rate $ 788,727,476 $ 7,592,802 $ - $ 796,320,278 Fixed rate 1,462,757 - 73,146,566 74,609,323 Total $ 790,190,233 $ 7,592,802 $ 73,146,566 $ 870,929,601 December 31, 2015 Agency Non-Agency Multi- Family Total Adjustable rate $ 360,057,377 $ 92,107,727 $ - $ 452,165,104 Fixed rate 15,275,680 - 104,025,797 119,301,477 Total $ 375,333,057 $ 92,107,727 $ 104,025,797 $ 571,466,581 The following tables present the fair value of AFS investment securities by maturity date as December 31, 2016 and December 31, 2015: December 31, 2016 December 31, 2015 Less than one year $ - $ - Greater than one year and less than five years 399,872,894 211,800,340 Greater than or equal to five years 471,056,707 359,666,241 Total $ 870,929,601 $ 571,466,581 As described in Note 2, when the Company purchases a credit-sensitive AFS security at a significant discount to its face value, the Company generally does not amortize into income a significant portion of this discount that the Company is entitled to earn because it does not expect to collect it due to the inherent credit risk of the security. The Company may also record an OTTI for a portion of its investment in the security to the extent the Company believes that the amortized cost will exceed the present value of expected future cash flows. The amount of principal that the Company does not amortize into income is designated as an off balance sheet credit reserve on the security, with unamortized net discounts or premiums amortized into income over time to the extent realizable. Actual maturities of AFS securities are affected by the contractual lives of the associated mortgage collateral, periodic payments of principal, and prepayments of principal. Therefore actual maturities of available-for-sale securities are generally shorter than stated contractual maturities. Stated contractual maturities are generally greater than ten years. The following tables present the changes for the year ended December 31, 2016 and the year ended December 31, 2015 of the unamortized net discount and designated credit reserves on the Company’s MBS. December 31, 2016 Designated Unamortized credit reserve net discount Total Beginning Balance as of January 1, 2016 $ (8,891,565 ) $ (57,280,275 ) $ (66,171,840 ) Acquisitions - - - Dispositions 4,893,913 21,637,637 26,531,550 Accretion of net discount - 6,703,365 6,703,365 Realized gain on paydowns - 325,709 325,709 Realized credit losses 3,023,911 (183,790 ) 2,840,121 Addition to credit reserves (1,021,433 ) 1,021,433 - Release of credit reserves 65,341 (65,341 ) - Ending balance at December 31, 2016 $ (1,929,833 ) $ (27,841,262 ) $ (29,771,095 ) December 31, 2015 Designated Unamortized credit reserve net discount Total Beginning Balance as of January 1, 2015 $ (12,697,796 ) $ (17,454,022 ) $ (30,151,818 ) Cumulative - effect adjustment for Linked Transactions (36,627,321 ) (47,091,958 ) (83,719,279 ) Adjusted beginning Balance as of January 1, 2015 (49,325,117 ) (64,545,980 ) (113,871,097 ) Acquisitions - (24,446,013 ) (24,446,013 ) Dispositions - 20,963,895 20,963,895 Accretion of net discount 30,201,676 13,061,839 43,263,515 Realized gain on paydowns - 226,553 226,553 Realized credit losses 10,582,246 (2,890,939 ) 7,691,307 Addition to credit reserves (2,669,938 ) 2,669,938 - Release of credit reserves 2,319,568 (2,319,568 ) - Ending balance at December 31, 2015 $ (8,891,565 ) $ (57,280,275 ) $ (66,171,840 ) Gains and losses from the sale of AFS securities are recorded within realized gain (loss) on sale of investments, net in the Company's consolidated statements of operations. Unrealized gains and losses on the Company’s AFS securities except Non-Agency RMBS IOs are recorded as unrealized gain (loss) on available-for-sale securities, net in the Company's consolidated statement of comprehensive income (loss). For the year ended December 31, 2016 the Company had unrealized gains (losses) on AFS securities of ($6,436,169). For the years ended December 31, 2015, and December 31, 2014, the Company had unrealized gains (losses) on AFS securities of ($7,604,122) and $18,303,304, respectively. The following tables present components of interest income on the Company’s AFS securities for the years December 31, 2016, December 31, 2015, December 31, 2014: Year Ended December 31, 2016 Net (premium Coupon amortization)/ Interest interest discount accretion income Agency $ 13,138,828 $ 341,020 $ 13,479,848 Non-Agency 2,579,344 1,343,594 3,922,938 Multi-Family 1,006,106 5,066,873 6,072,979 Total $ 16,724,278 $ 6,751,487 $ 23,475,765 Year Ended December 31, 2015 Net (premium Coupon amortization)/ Interest interest discount accretion income Agency $ 7,286,166 $ 241,550 $ 7,527,716 Non-Agency 2,357,814 7,653,839 10,011,653 Multi-Family 1,443,326 5,315,461 6,758,787 Total $ 11,087,306 $ 13,210,850 $ 24,298,156 Year Ended December 31, 2014 Net (premium Coupon amortization)/ Interest interest discount accretion income Agency $ 11,409,239 $ 603,547 $ 12,012,786 Non-Agency 261,050 4,077,481 4,338,531 Multi-Family 184,411 24,610 209,021 Total $ 11,854,700 $ 4,705,638 $ 16,560,338 |
MORTGAGE LOANS HELD-FOR-SALE, a
MORTGAGE LOANS HELD-FOR-SALE, at FAIR VALUE | 12 Months Ended |
Dec. 31, 2016 | |
Mortgage loans held-for-sale Disclosure [Abstract] | |
Mortgage loans held-for-sale Disclosure [Text Block] | NOTE 5 – MORTGAGE LOANS HELD-FOR-SALE, at FAIR VALUE Mortgage loans held-for-sale consists of residential mortgage loans carried at fair value as a result of the fair value option. The following table presents the carrying value of the Company’s mortgage loans held-for-sale as of December 31, 2016 and December 31, 2015: December 31, 2016 December 31, 2015 Unpaid principal balance $ 2,867,263 $ 10,767,856 Fair value adjustment (17,727 ) 132,546 Carrying value $ 2,849,536 $ 10,900,402 At December 31, 2016 and December 31, 2015, the Company pledged mortgage loans with a fair value of $0.0 million and $10.9 million, respectively, as collateral for repurchase or warehouse agreements. See Note 10 – Borrowings . The geographic concentrations of credit risk exceeding 5% of the total loan balances related to the mortgage loans held-for-sale as of December 31, 2016 are as follows: December 31, 2016 December 31, 2015 Texas 56.0 % 20.7 % Arizona - 16.8 % Massachusetts - 12.8 % California 24.4 % 11.9 % Minnesota - 9.9 % New York - 6.6 % Pennsylvania - 5.9 % North Carolina 19.6 % 5.5 % Illinois - 5.1 % |
THE FREMF TRUSTS
THE FREMF TRUSTS | 12 Months Ended |
Dec. 31, 2016 | |
FREMF trusts [Member] | |
Balance Sheet | |
Variable Interest Entity Disclosure [Text Block] | NOTE 6 – THE FREMF TRUSTS The Company has elected the fair value option on the assets and liabilities of the FREMF 2011-K13 Trust and the FREMF 2012-KF01 Trust, which requires that changes in valuations of the trusts be reflected in the Company’s statements of operations. The Company’s net investment in the trusts is limited to the Multi-Family MBS comprised of first loss PO securities and IO securities acquired by the Company in 2014 with an aggregate net carrying value of $18,342,040 at December 31, 2016 and $86,030,550 at December 31, 2015. The consolidated balance sheets of the FREMF trusts at December 31, 2016 and December 31, 2015 are set out below: Balance Sheets December 31, 2016 December 31, 2015 Assets Multi-family mortgage loans held in securitization trusts $ 1,222,905,433 $ 1,449,774,383 Receivables 4,617,642 5,380,956 Total assets $ 1,227,523,075 $ 1,455,155,339 Liabilities and Equity Multi-family securitized debt obligations $ 1,204,583,678 $ 1,364,077,012 Payables 4,597,357 5,047,777 $ 1,209,181,035 $ 1,369,124,789 Equity 18,342,040 86,030,550 Total liabilities and equity $ 1,227,523,075 $ 1,455,155,339 The multi-family mortgage loans held in securitization trusts had an unpaid principal balance of $1,147,753,367 at December 31, 2016 and $1,371,258,074 at December 31, 2015. The multi-family securitized debt obligations had an unpaid principal balance of $1,147,753,367 at December 31, 2016 and $1,371,258,074 at December 31, 2015. The consolidated statements of operations of the FREMF trusts for the years ended December 31, 2016 and December 31, 2015 and for the period from date of consolidation to December 31, 2014 are set out below: Statements of Operations December 31, 2016 December 31, 2015 For the period from date of consolidation to December 31, 2014* Interest income $ 58,587,780 $ 68,016,595 $ 21,158,102 Interest expense (54,940,386 ) (62,157,176 ) (19,400,851 ) Net interest income $ 3,647,394 $ 5,859,419 $ 1,757,251 General and administrative fees (2,711,189 ) (3,249,208 ) (1,086,165 ) Unrealized gain (loss) on multi-family loans held in securitization trusts (5,219,530 ) 6,097,000 1,473,484 Net income (loss) $ (4,283,325 ) $ 8,707,211 $ 2,144,570 * The Company consolidated the first trust in September, 2014 and the second trust in October, 2014. The geographic concentrations of credit risk exceeding 5% of the total loan balances related to the FREMF trusts as of December 31, 2016 are as follows: December 31, 2016 December 31, 2015 Texas 17.9 % Texas 19.3 % New York 15.7 % New York 13.2 % Washington 8.4 % California 12.2 % Colorado 7.5 % Washington 7.1 % Georgia 5.5 % Colorado 6.4 % |
RESIDENTIAL MORTGAGE LOAN SECUR
RESIDENTIAL MORTGAGE LOAN SECURITIZATION TRUSTS | 12 Months Ended |
Dec. 31, 2016 | |
Residential Mortgage [Member] | |
Balance Sheet | |
Variable Interest Entity Disclosure [Text Block] | NOTE 7 – RESIDENTIAL MORTGAGE LOAN SECURITIZATION TRUSTS The Company has elected the fair value option on the assets and liabilities of the CSMC 2014-OAK1 Trust, which requires that changes in valuations of the trust be reflected in the Company’s statements of operations. The Company’s net investment in the trust is limited to the Non-Agency RMBS comprised of subordinated and first loss securities, IO securities and excess servicing rights acquired by the Company in 2014 with an aggregate net carrying value of $6,374,821 at December 31, 2016 and $31,535,741 at December 31, 2015. The Company previously consolidated the assets and liabilities of the JPMMT 2014-OAK4 Trust, but based on the sale of subordinated and first loss securities during the second quarter of 2016, has determined that it is no longer the primary beneficiary of the trust, and accordingly no longer consolidates the assets and liabilities of this trust. The consolidated balance sheets of the residential mortgage loan securitization trusts at December 31, 2016 and December 31, 2015 are set out below: Balance Sheets December 31, 2016 December 31, 2015 Assets Residential mortgage loans held in securitization trusts $ 141,126,720 $ 411,881,097 Receivables 471,146 1,446,120 Total assets $ 141,597,866 $ 413,327,217 Liabilities and Equity Residential securitized debt obligations $ 134,846,348 $ 380,638,423 Payables 376,697 1,153,053 $ 135,223,045 $ 381,791,476 Equity 6,374,821 31,535,741 Total liabilities and equity $ 141,597,866 $ 413,327,217 The residential mortgage loans held in securitization trusts had an unpaid principal balance of $140,690,705 at December 31, 2016 and $411,650,561 at December 31, 2015. The residential mortgage loan securitized debt obligations had an unpaid principal balance of $140,690,705 at December 31, 2016 and $411,650,561 at December 31, 2015. As of March 31, 2016, the most recent quarterly reporting date prior to deconsolidation of the JPMMT 2014-OAK4 Trust, the residential mortgage loans held in the trust and the residential securitized debt obligations issued by the trust both had an unpaid principal balance of $202,911,543. The consolidated statements of operations of the residential mortgage loan securitization trusts for the years ended December 31, 2016 and December 31, 2015 and for the period from date of consolidation to December 31, 2014 are set out below: Statements of Operations December 31, 2016 December 31, 2015 For the period from date of consolidation to December 31, 2014* Interest income $ 10,585,191 $ 19,986,204 $ 4,438,633 Interest expense (8,117,402 ) (13,156,912 ) (3,575,168 ) Net interest income $ 2,467,789 $ 6,829,292 $ 863,465 General and administrative fees (266,957 ) (635,547 ) (44,267 ) Unrealized gain (loss) on residential mortgage loans held in securitization trusts 404,720 (8,153,474 ) 3,059,647 Net income (loss) $ 2,605,552 $ (1,959,729 ) $ 3,878,845 * The Company consolidated the first trust in October, 2014, and the second trust in December, 2014. The geographic concentrations of credit risk exceeding 5% of the total loan balances related to the residential mortgage loan securitization trusts as at December 31, 2016 are as follows: December 31, 2016 December 31, 2015 California 37.6 % 45.5 % Washington 15.4 % 13.3 % Massachusetts 8.4 % 6.4 % Florida 5.7 % - Tennessee 4.8 % - |
USE OF SPECIAL PURPOSE ENTITIES
USE OF SPECIAL PURPOSE ENTITIES AND VARIABLE INTEREST ENTITIES | 12 Months Ended |
Dec. 31, 2016 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Special Purpose Entity And Variable Interest Entity Disclosure [Text Block] | NOTE 8 – USE OF SPECIAL PURPOSE ENTITIES AND VARIABLE INTEREST ENTITIES A Special Purpose Entity (“SPE”) is an entity designed to fulfill a specific limited purpose of the company that organized it, and a SPE is frequently used for the purpose of securitizing, or re-securitizing, financial assets. SPEs are typically structured as pass through entities that receive principal and interest on the underlying collateral and distribute those payments to certificate holders. As a consequence of their purpose and design, SPEs are typically VIEs. As further discussed in Notes 2, 6 and 7, the Company has evaluated its investments in Multi-Family MBS and Non-Agency RMBS and has determined that they are VIEs. The Company has then undertaken an analysis of whether it is the primary beneficiary of any of these VIEs, and has determined that it is the primary beneficiary of the FREMF 2011-K13 Trust, FREMF 2012-KF01 Trust and CSMC 2014-OAK1 Trust. Accordingly, the Company consolidated the assets, liabilities, income and expenses of these trusts in its financial statements as of and for the periods ending December 31, 2016, December 31, 2015 and December 31, 2014. However, the assets of each of the trusts are restricted, and can only be used to fulfill the obligations of the respective trusts. Additionally, the obligations of each of the trusts do not have any recourse to the Company as the consolidator of the trusts. The Company has elected the fair value option in respect of the assets and liabilities of the trusts. For the Company’s remaining Multi-Family and Non-Agency MBS investments that are VIEs, the Company has determined that it is not the primary beneficiary, and accordingly these investments are accounted for as further described in Notes 2, 6 and 7. As further described in Note 2, GAAP also requires the Company to consider whether securitizations the Company sponsors and other transfers of financial assets should be treated as sales or financings. During the year ended December 31, 2015, the Company transferred residential mortgage loans to Oaks Mortgage Trust Series 2015-1 and Oaks Mortgage Trust 2015-2, and accounted for these transfers as sales for financial reporting purposes, in accordance with ASC 860. The Company also determined that it was not the primary beneficiary of these VIEs because it lacked the power to direct the activities that will have the most significant economic impact on the entities. The Company’s maximum exposure to loss from these VIEs is limited to the fair value of its investments in Non-Agency RMBS issued by the two VIEs, with a fair value of $4,413,403 at December 31, 2016. This amount is included in Available-for-Sale securities, which are further described in Note 4. |
RESTRICTED CASH AND DUE TO BROK
RESTRICTED CASH AND DUE TO BROKER | 12 Months Ended |
Dec. 31, 2016 | |
Cash and Cash Equivalents [Abstract] | |
Restricted Cash And Due To Broker Disclosure [Text Block] | NOTE 9 – RESTRICTED CASH AND DUE TO BROKER As of December 31, 2016, the Company is required to maintain certain cash balances with counterparties for broker activity and collateral for the Company's repurchase agreements in non-interest bearing accounts. The following table presents the Company's restricted cash balances as of December 31, 2016 and December 31, 2015: December 31, 2016 December 31, 2015 Restricted cash balance held by: Broker counterparties for derivatives trading $ (4,244,678 ) $ 528,564 Repurchase counterparties as restricted collateral 10,355,222 7,646,074 Total $ 6,110,544 $ 8,174,638 |
BORROWINGS
BORROWINGS | 12 Months Ended |
Dec. 31, 2016 | |
Debt Disclosure [Abstract] | |
Debt Disclosure [Text Block] | NOTE 10 – BORROWINGS Repurchase Agreements The Company has entered into repurchase agreements at December 31, 2016 to finance its portfolio of investments. The repurchase agreements bear interest at a contractually agreed rate. The repurchase obligations mature and typically reinvest every 30 days to one year and have a weighted average aggregate interest rate of 1.07% at December 31, 2016. Repurchase agreements are accounted for as secured borrowings since the Company maintains effective control of the financed assets. The following table summarizes certain characteristics of the Company’s repurchase agreements at December 31, 2016 and December 31, 2015: December 31, 2016 December 31, 2015 Weighted Weighted Amount average Market value Amount average Market value outstanding interest rate of collateral held outstanding interest rate of collateral held Agency $ 755,221,000 0.97 % $ 790,190,232 $ 358,239,000 0.66 % $ 374,952,510 Non-Agency 7,313,000 2.39 % 12,784,707 114,512,000 2.24 % 121,475,112 Multi-Family 42,277,000 2.52 % 73,146,566 86,177,000 1.83 % 190,056,347 Mortgage loans - 0.00 % - 9,504,457 2.87 % 10,900,403 Total $ 804,811,000 1.07 % $ 876,121,505 $ 568,432,457 1.19 % $ 697,384,372 At December 31, 2016 and December 31, 2015, the repurchase agreements had the following remaining maturities: December 31, 2016 December 31, 2015 < 30 days $ 737,823,000 $ 449,063,000 31 to 60 days 19,897,000 76,044,000 61 to 90 days 47,091,000 37,873,540 > 90 days - 5,451,917 Total $ 804,811,000 $ 568,432,457 Under the repurchase agreements, the respective lender retains the right to mark the underlying collateral to fair value. A reduction in the value of pledged assets would require the Company to provide additional collateral or fund margin calls. In addition, the repurchase agreements are subject to certain financial covenants, which include minimum net worth and/or profitability requirements, maximum debt-to-equity ratios and minimum market capitalization requirements. The most restrictive of these covenants requires that, on the last day of any fiscal quarter, our total stockholders’ equity shall not be less than the greater of (1) $75,000,000 or (2) 50% of the highest stockholders’ equity on the last day of the preceding eight fiscal quarters. The Company was in compliance with these covenants as of December 31, 2016 and December 31, 2015. The following tables summarize certain characteristics of the Company’s repurchase agreements at December 31, 2016 and December 31, 2015: December 31, 2016 Amount Percent of total Weighted average Market Value Repurchase Agreement Counterparties Outstanding amount outstanding days to maturity of collateral held Wells Fargo Securities $ 33,666,000 4.18 % 8 $ 57,627,433 Other North America 703,788,000 87.45 % 16 742,690,286 Asia (1) 62,733,000 7.79 % 14 66,198,478 Europe (1) 4,624,000 0.57 % 44 9,605,308 Total $ 804,811,000 100.00 % 16 $ 876,121,505 (1) Counterparties domiciled in Europe and Asia, or their U.S. subsidiaries. December 31, 2015 Amount Percent of total Weighted average Market Value Repurchase Agreement Counterparties Outstanding amount outstanding days to maturity of collateral held Merrill Lynch $ 99,770,000 17.55 % 30 $ 154,005,234 Wells Fargo Securities 32,192,000 5.66 % 10 53,711,547 Other North America 291,806,000 51.34 % 25 315,040,818 Asia (1) 88,565,000 15.58 % 16 97,970,226 Europe (1) 56,099,457 9.87 % 46 76,656,547 Total $ 568,432,457 100.00 % 26 $ 697,384,372 (1) Counterparties domiciled in Europe and Asia, or their U.S. subsidiaries. Secured Loans On February 24, 2015, our wholly owned captive insurance subsidiary, FOI, became a member of the FHLBI. A condition of FOI’s membership was the purchase of FHLBI membership stock. On January 12, 2016, the regulator of the FHLB system, the Federal Housing Finance Agency, or the FHFA, published a Final Rule that amended FHLB membership regulations for captive insurance subsidiaries. Under the regulations, FOI was required to terminate its membership and repay its advances on or before February 19, 2017. FOI was dissolved on July 18, 2016 and accordingly, at December 31, 2016, FOI had repaid all secured FHLBI advances and replaced them with repurchase agreements. |
DERIVATIVE INSTRUMENTS HEDGING
DERIVATIVE INSTRUMENTS HEDGING AND NON-HEDGING ACTIVITIES | 12 Months Ended |
Dec. 31, 2016 | |
Derivative Instrument Detail [Abstract] | |
Derivative Instruments and Hedging Activities Disclosure [Text Block] | NOTE 11 – DERIVATIVE INSTRUMENTS HEDGING AND NON-HEDGING ACTIVITIES The Company enters into a variety of derivative instruments in connection with its risk management activities. The Company's primary objective for executing these derivatives and non-derivative instruments is to mitigate the Company's economic exposure to future events that are outside its control. The Company's derivative financial instruments are utilized principally to manage market risk and cash flow volatility associated with interest rate risk (including associated prepayment risk) related to certain assets and liabilities. As part of its risk management activities, the Company may, at times, enter into various forward contracts, including short securities, Agency to-be-announced securities, or TBAs, options, futures, swaps, swaptions and caps. In executing on the Company's current risk management strategy, the Company has entered into interest rate swap, swaption agreements, TBA’s and futures contracts. Amounts receivable and payable under interest rate swap agreements are accounted for as unrealized gain (loss) on derivative contracts, net in the consolidated statement of operations. Premiums on swaptions are amortized on a straight line basis between trade date and expiration date and are recognized in the consolidated statement of operations as a realized loss on derivative contracts. The following summarizes the Company's significant asset and liability derivatives, the risk exposure for these derivatives and the Company's risk management activities used to mitigate certain of these risks. While the Company uses derivative instruments to achieve the Company's risk management activities, it is possible that these instruments will not effectively mitigate all or a substantial portion of the Company's market rate risk. In addition, the Company might elect, at times, not to enter into certain hedging arrangements in order to maintain compliance with REIT requirements. Balance Sheet Presentation The following tables present the gross fair value and notional amounts of the Company’s derivative financial instruments as of December 31, 2016 and December 31, 2015. December 31, 2016 Derivative Assets Derivative Liabilities Contracts Fair value Notional Contracts Fair value Notional Eurodollar Futures 10,501 8,053,813 10,501,000,000 - - - Total 10,501 $ 8,053,813 10,501,000,000 - $ - - December 31, 2015 Derivative Assets Derivative Liabilities Contracts Fair value Notional Contracts Fair value Notional Deliverable Swap Futures 70 27,343 7,000,000 - - - Eurodollar Futures 5,908 2,425,538 5,908,000,000 - - - Treasury Note Futures 300 105,469 30,000,000 - - - Total 6,278 $ 2,558,350 5,945,000,000 - $ - - Offsetting of Financial Assets and Liabilities The Company’s repurchase agreements are governed by underlying agreements that provide for a right of setoff in the event of default of either counterparty to the agreement. The Company also has in place with its counterparties ISDA Master Agreements (“Master Agreements”) for its derivative contracts. In accordance with the Master Agreements with each counterparty, if on any date amounts would otherwise be payable in the same currency and in respect of the same transaction by each party to the other, then, on such date, each party’s obligation to make payment of any such amount will be automatically satisfied and discharged and, if the aggregate amount that would otherwise have been payable by one party exceeds the aggregate amount that would otherwise have been payable by the other party, is replaced by an obligation upon the party by whom the larger aggregate amount would have been payable to pay to the other party the excess of the larger aggregate amount over the smaller aggregate amount. The Company has pledged financial instruments and financial collateral as restricted cash to its counterparties for its derivative contracts and repurchase agreements. See Note 2 for specific details on the terms of restricted cash with counterparties and Note 9 for the amounts of restricted cash outstanding. Under GAAP, if the Company has a valid right of setoff, it may offset the related asset and liability and report the net amount. The Company presents repurchase agreements subject to Master Agreements or similar agreements on a gross basis, and derivative assets and liabilities subject to such arrangements on a net basis, based on derivative type and counterparty, in its consolidated balance sheets. Separately, the company presents cash collateral subject to such arrangements on a net basis, based on counterparty, in its c onsolidated balance sheets. However, the Company does not offset financial assets and liabilities with the associated cash collateral on its consolidated balance sheets. The below tables provide a reconciliation of these assets and liabilities that are subject to Master Agreements or similar agreements and can be potentially offset on the Company’s consolidated balance sheets as of December 31, 2016 and December 31, 2015: As of December 31, 2016 the Company did not have any assets subject to Master Agreements or similar agreements. December 31, 2016 Gross amounts not offset in the Balance Sheet (1) Net amounts Gross amounts Gross amounts of assets Cash collateral of recognized offset in the presented in the Financial (Received)/ Net Description assets Balance Sheet Balance Sheet instruments Pledged amount Futures $ 8,053,813 $ - $ 8,053,813 $ - $ - $ 8,053,813 Total $ 8,053,813 $ - $ 8,053,813 $ - $ - $ 8,053,813 December 31, 2015 Gross amounts not offset in the Balance Sheet (1) Net amounts Gross amounts Gross amounts of assets Cash collateral of recognized offset in the presented in the Financial (Received)/ Net Description assets Balance Sheet Balance Sheet instruments Pledged amount Futures $ 2,558,350 $ - $ 2,558,350 $ - $ - $ 2,558,350 Total $ 2,558,350 $ - $ 2,558,350 $ - $ - $ 2,558,350 December 31, 2016 Gross amounts not offset in the Balance Sheet (1) Net amounts Gross amounts Gross amounts of liabilities Cash collateral of recognized offset in the presented in the Financial (Received)/ Net Description liabilities Balance Sheet Balance Sheet instruments Pledged amount Repurchase agreements $ (804,811,000 ) $ - $ (804,811,000 ) $ - $ - $ (804,811,000 ) Total $ (804,811,000 ) $ - $ (804,811,000 ) $ - $ - $ (804,811,000 ) December 31, 2015 Gross amounts not offset in the Balance Sheet (1) Net amounts Gross amounts Gross amounts of liabilities Cash collateral of recognized offset in the presented in the Financial (Received)/ Net Description liabilities Balance Sheet Balance Sheet instruments Pledged amount Repurchase agreements $ (518,735,457 ) $ - $ (518,735,457 ) $ - $ - $ (518,735,457 ) FHLB advances (49,697,000 ) - (49,697,000 ) - - (49,697,000 ) Total $ (568,432,457 ) $ - $ (568,432,457 ) $ - $ - $ (568,432,457 ) (1) Amounts presented are limited in total to the net amount of assets or liabilities presented in the consolidated balance sheets by instrument. Excess cash collateral or financial assets that are pledged to counterparties may exceed the financial liabilities subject to Master Agreements or similar agreements, or counterparties may have pledged excess cash collateral to the Company that exceed the corresponding financial assets. These excess amounts are excluded from the tables above. Linked Transactions In June 2014, the FASB issued financial guidance for repurchase financings, ASU 2014-11, “Repurchase-to-Maturity Transactions, Repurchase Financings, and Disclosures,” which required separate accounting for a transfer of a financial asset executed contemporaneously with a repurchase agreement with the same counterparty. If all de-recognition criteria were met, the initial transferee accounted for the initial transfer as a purchase and the related repurchase agreement component of the transaction was accounted for as a secured borrowing. ASU 2014-11 also required repurchase-to-maturity transactions to be accounted for as secured borrowings as if the transferor retained effective control, even though the transferred financial assets are not returned to the transferor at settlement. The accounting changes were effective for public business entities for the first interim or annual period beginning after December 15, 2014. Entities were required to present changes in accounting for transactions outstanding on the effective date as a cumulative-effect adjustment for retained earnings as of the beginning of the period of adoption. The Company adopted the guidance as of January 1, 2015. This change had no effect on net income or stockholder’s equity, but did impact the amounts reported on the consolidated balance sheet and the consolidated statement of operations. The Company disaggregated amounts previously netted together in the “Linked transactions, net, at fair value” line item on the consolidated balance sheet and has presented these amounts gross. As of January 1, 2015, the Company made a cumulative-effect adjustment to transfer real estate securities with values of $210,238,657 to the “Available-for-sale securities, at fair value” line item, and to transfer secured borrowings of $149,293,000 to the “Repurchase agreements” line item on the consolidated balance sheet. As part of the cumulative-effect adjustment the Company also transferred interest receivable and payable of $0.2 million and $0.3 million to the “Accrued interest receivable” and “Accrued interest payable” line items, respectively. There was no effect on prior periods as the FASB did not require full retrospective application. As a result, disclosures for periods prior to January 1, 2015, are not comparable to disclosures subsequent to that date. Under previous GAAP, when the initial transfer of a financial asset and repurchase agreement financings were entered into contemporaneously with, or in contemplation of, one another, the transaction was considered linked unless all of the criteria found in ASC 860-10 were met at the inception of the transaction. If the transaction was determined to be linked, the Company recorded the initial transfer and repurchase financing on a net basis and recorded a forward commitment to purchase assets as a derivative instrument. Gains and losses were recorded together with net interest income in the “Unrealized gain (loss) and net interest income from Linked Transactions” line item on the consolidated statement of operations. When, or if a transaction was no longer considered linked, the security and related repurchase agreement was recorded on a gross basis. The fair value of linked transactions reflected the value of the underlying security’s fair market value netted with the respective linked repurchase agreement borrowings and net accrued interest. Disclosures required under previous GAAP have been presented for periods under which the superseded guidance applied. The following table presents certain information concerning the Non-Agency RMBS, Multi-Family MBS and repurchase financings underlying the Company’s Linked Transactions as of December 31, 2014: December 31, 2014 Non-Agency Multi-Family Total Face Value $ 186,532,050 $ 102,968,560 $ 289,500,610 Unamortized premium - - - Unamortized discount Designated credit reserve and OTTI (36,627,428 ) - (36,627,428 ) Net, unamortized (28,768,448 ) (18,323,619 ) (47,092,067 ) Amortized Cost 121,136,174 84,644,941 205,781,115 Gross unrealized gain 5,676,815 1,770,361 7,447,176 Gross unrealized (loss) (2,384,676 ) (604,957 ) (2,989,633 ) Fair Value $ 124,428,313 85,810,345 $ 210,238,658 The following table presents the change for the year ended December 31, 2014 of the unamortized net discount and designated credit reserves on Non-Agency RMBS and Multi-Family MBS underlying Linked Transactions: December 31, 2014 Designated Unamortized credit reserve net discount Total Beginning Balance as of January 1, 2014 $ (29,857,597 ) $ (30,770,386 ) $ (60,627,983 ) Acquisitions (19,384,939 ) (47,651,628 ) (67,036,567 ) Dispositions 9,468,964 15,465,093 24,934,057 Accretion of net discount - 12,122,919 12,122,919 Realized credit losses 3,146,144 - 3,146,144 Release of credit reserves - 3,741,935 3,741,935 Ending balance at December 31, 2014 $ (36,627,428 ) $ (47,092,067 ) $ (83,719,495 ) Linked Repurchase Agreements Amount Percent of total Weighted average Market Value Repurchase Agreement Counterparties Outstanding amount outstanding days to maturity of collateral held North America $ 86,985,000 58.26 % 33 $ 124,620,917 Europe (1) 46,381,000 31.07 % 15 62,487,229 Asia (1) 15,927,000 10.67 % 9 23,130,512 Total $ 149,293,000 100.00 % 25 $ 210,238,658 (1) Counterparties domiciled in Europe and Asia, or their U.S. subsidiaries At December 31, 2014, Linked Transactions also included $163,970 of associated interest receivable and $291,518 of accrued interest payable The following table presents certain information about the components of the unrealized gain (loss) and net interest income from Linked Transactions included in the Company’s consolidated statement of operations for the year ended December 31, 2014: Year Ended December 31, 2014 Interest income attributable to AFS underlying Linked Transactions $ 15,427,632 Interest expense attributable to linked repurchase agreement borrowings underlying Linked Transactions (2,893,375 ) Change in fair value of Linked Transactions included in earnings (1,928,409 ) Unrealized gain (loss) and net interest income from Linked Transactions $ 10,605,848 Income Statement Presentation The Company has not applied hedge accounting to its current derivative portfolio held to mitigate the interest rate risk associated with its debt portfolio. As a result, the Company is subject to volatility in its earnings due to movement in the unrealized gains and losses associated with its interest rate swaps, swaptions and any other derivative instruments. The following table summarizes the underlying hedged risks and the amount of gains and losses on derivative instruments reported net in the consolidated statement of operations as realized gain (loss) on derivative contracts, net and unrealized gain (loss) on derivative contracts, net for the years ended December 31, 2016, December 31, 2015, and December 31, 2014: Year Ended December 31, 2016 Amount of realized Amount of unrealized Primary underlying risk gain (loss) appreciation (depreciation) Total Interest rate: Futures (3,089,001 ) 5,495,463 2,406,462 Total $ (3,089,001 ) $ 5,495,463 $ 2,406,462 Year Ended December 31, 2015 Amount of realized Amount of unrealized Primary underlying risk gain (loss) appreciation (depreciation) Total Interest rate: Interest rate swaps (1) $ (7,047,875 ) $ 1,755,108 $ (5,292,767 ) Swaptions (84,000 ) 62,450 (21,550 ) Futures (4,892,855 ) 3,092,300 (1,800,555 ) Total $ (12,024,730 ) $ 4,909,858 $ (7,114,872 ) Year Ended December 31, 2014 Amount of realized Amount of unrealized Primary underlying risk gain (loss) appreciation (depreciation) Total Interest rate: Interest rate swaps (1) $ (9,705,847 ) $ (761,429 ) $ (10,467,276 ) Swaptions (336,000 ) (1,413,244 ) (1,749,244 ) Futures (8,621,211 ) (688,217 ) (9,309,428 ) TBAs 448,598 (68,359 ) 380,239 Total $ (18,214,460 ) $ (2,931,249 ) $ (21,145,709 ) (1) In the year ended December 31, 2015,net swap interest expense totaled $2,216,417 comprised of $2,719,563 in interest expense paid (included in realized gain (loss)) and $503,146 in accrued interest income (included in unrealized gain (loss)). In the year ended December 31, 2014, net swap interest expense totaled $3,495,232 comprised of $3,329,219 in interest expense paid (included in realized gain (loss)) and $166,013 in accrued interest income (included in unrealized gain (loss)). |
MSRs
MSRs | 12 Months Ended |
Dec. 31, 2016 | |
Mortgage Servicing Rights MSR Disclosure [Abstract] | |
Mortgage Servicing Rights MSR Disclosure [Text Block] | NOTE 12 - MSRs During the year ended December 31, 2016, the Company retained the servicing rights associated with an aggregate principal balance of $397,925,409 of residential mortgage loans that the Company had previously transferred to four residential mortgage loan securitization trusts. The Company’s MSRs are held and managed at the Company’s TRS, and the Company employs one or more licensed sub-servicers to perform the related servicing activities. To the extent that the Company determines it is the primary beneficiary of a residential mortgage loan securitization trust into which it has sold loans, any associated MSRs are eliminated on the consolidation of the trust. The trust is contractually obligated to pay a portion of the interest payments from the associated residential mortgage loans for the direct servicing of the loans, and after deduction of sub-servicing fees payable to contracted sub-servicers, the net amount, excess servicing rights, represents a liability of the trust. Upon consolidation of the trust, the fair value of the excess servicing rights is equal to the related MSRs held at the Company’s TRS. As a result of the Company’s determination that it is not the primary beneficiary of OAKS Mortgage Trust 2015-1 and OAKS Mortgage Trust 2015-2, it does not consolidate these trusts, and as a consequence, MSRs associated with these trusts are recorded on the Company’s consolidated balance sheet at December 31, 2016. In addition, the Company previously consolidated the assets and liabilities of the JPMMT 2014-OAK4 Trust, but based on the sale of subordinated and first loss securities during the second quarter of 2016, has determined that it is no longer the primary beneficiary of the trust, and accordingly no longer consolidates its assets and liabilities. As a consequence, MSRs associated with this trust are now recorded on the Company’s consolidated balance sheet at December 31, 2016. The following table presents the Company’s MSR activity as of December 31, 2016 and the year ended December 31, 2015: December 31, 2016 December 31, 2015 Balance at beginning of year $ 4,268,673 $ - MSRs retained from sales to securitizations - 4,940,630 MSRs related to deconsolidation of securitization trust 364,163 - Changes in fair value due to: Changes in valuation inputs or assumptions used in valuation model (102,855 ) (217,663 ) Other changes to fair value (1) (1,089,172 ) (454,294 ) Balance at end of period $ 3,440,809 $ 4,268,673 Loans associated with MSRs (2) $ 397,925,409 $ 472,886,810 MSR values as percent of loans (3) 0.86 % 0.90 % (1) Amounts represent changes due to realization of expected cash flows (2) Amounts represent the principal balance of loans associated with MSRs outstanding at December 31, 2016 and December 31, 2015, respectively (3) Amounts represent the carrying value of MSRs at December 31, 2016 and December 31, 2015, respectively divided by the outstanding balance of the loans associated with these MSRs The following table presents the components of servicing income recorded on the Company’s statements of operations for the years ended December 31, 2016, December 31, 2015 and December 31, 2014: Year Ended Year Ended Year Ended December 31, 2016 December 31, 2015 December 31, 2014 Servicing income, net $ 932,425 $ 211,878 $ - Income from MSRs, net $ 932,425 $ 211,878 $ - |
FINANCIAL INSTRUMENTS
FINANCIAL INSTRUMENTS | 12 Months Ended |
Dec. 31, 2016 | |
Fair Value Disclosures [Abstract] | |
Financial Instruments Disclosure [Text Block] | NOTE 13 – FINANCIAL INSTRUMENTS GAAP defines fair value and provides a consistent framework for measuring fair value under GAAP. ASC 820 “Fair Value Measurement” expands fair value financial statement disclosure requirements. ASC 820 does not require any new fair value measurements and only applies to accounting pronouncements that already require or permit fair value measures, except for standards that relate to share-based payments. Valuation techniques are based on observable and unobservable inputs. Observable inputs reflect readily obtainable data from independent sources, while unobservable inputs reflect the Company’s market assumptions. The three levels are defined as follows: • Level 1 Inputs – Quoted prices for identical instruments in active markets. • Level 2 Inputs – Quoted prices for similar instruments in active markets; quoted prices for identical or similar instruments in markets that are not active; and model-derived valuations whose inputs are observable or whose significant value drivers are observable. • Level 3 Inputs – Instruments with primarily unobservable value drivers. The following tables summarize the valuation of the Company’s assets and liabilities at fair value within the fair value hierarchy levels as of December 31, 2016 and December 31, 2015: December 31, 2016 Quoted prices in Significant active markets other observable Unobservable for identical assets inputs inputs Balance as of Level 1 Level 2 Level 3 December 31, 2016 Assets: Residential mortgage-backed securities (a) $ - $ 870,929,601 $ - $ 870,929,601 Residential mortgage loans - 2,849,536 - 2,849,536 Multi-Family mortgage loans held in securitization trusts - 1,222,905,433 - 1,222,905,433 Residential mortgage loans held in securitization trusts - 141,126,720 - 141,126,720 Mortgage servicing rights - - 3,440,809 3,440,809 Futures 8,053,813 - - 8,053,813 Total $ 8,053,813 $ 2,237,811,290 $ 3,440,809 $ 2,249,305,912 Liabilities: Multi-family securitized debt obligations $ - $ (1,204,583,678 ) $ - $ (1,204,583,678 ) Residential securitized debt obligations - (134,846,348 ) - (134,846,348 ) Total $ - $ (1,339,430,026 ) $ - $ (1,339,430,026 ) December 31, 2015 Quoted prices in Significant active markets other observable Unobservable for identical assets inputs inputs Balance as of Level 1 Level 2 Level 3 December 31, 2015 Assets: Residential mortgage-backed securities (a) $ - $ 571,466,581 $ - $ 571,466,581 Residential mortgage loans - 10,900,402 - 10,900,402 Multi-Family mortgage loans held in securitization trusts - 1,449,774,383 - 1,449,774,383 Residential mortgage loans held in securitization trusts - 411,881,097 - 411,881,097 Mortgage servicing rights - - 4,268,673 4,268,673 FHLB Stock 2,403,000 - - 2,403,000 Futures 2,558,350 - - 2,558,350 Total $ 4,961,350 $ 2,444,022,463 $ 4,268,673 $ 2,453,252,486 Liabilities: Multi-family securitized debt obligations $ - $ (1,364,077,012 ) $ - $ (1,364,077,012 ) Residential securitized debt obligations - (380,638,423 ) - (380,638,423 ) Total $ - $ (1,744,715,435 ) $ - $ (1,744,715,435 ) (a) For more detail about the fair value of the Company’s MBS, see Note 3 and Note 4. During the years ended December 31, 2016 and December 31, 2015, the Company did not have any transfers between any of the levels of the fair value hierarchy. Transfers between levels are deemed to take place on the last day of the reporting period in which the transfer takes place. As of December 31, 2016 and December 31, 2015, the Company had $3,440,809 and $4,268,673, respectively, in Level 3 assets. The Company’s Level 3 assets are comprised of MSRs. Accordingly, for more detail about Level 3 assets, also see Note 12. The following table provides quantitative information about the significant unobservable inputs used in the fair value measurement of the Company’s MSRs classified as Level 3 fair value assets at December 31, 2016 and December 31, 2015: As of December 31, 2016 Valuation Technique Unobservable Input Range Weighted Average Discounted cash flow Constant prepayment rate 8.0 - 26.5 % 13.7 % Discount rate 12.0 % 12.0 % As of December 31, 2015 Valuation Technique Unobservable Input Range Weighted Average Discounted cash flow Constant prepayment rate 6.5 - 28.6 % 13.3 % Discount rate 12.0 % 12.0 % |
RELATED PARTY TRANSACTIONS
RELATED PARTY TRANSACTIONS | 12 Months Ended |
Dec. 31, 2016 | |
Related Party Transactions [Abstract] | |
Related Party Transactions Disclosure [Text Block] | NOTE 14 – RELATED PARTY TRANSACTIONS Management Fee The Company is externally managed and advised by the Manager. Pursuant to the terms of the management agreement, the Company pays the Manager a management fee equal to 1.5% per annum, calculated and payable monthly in arrears. For purposes of calculating the management fee, the Company’s stockholders’ equity means the sum of the net proceeds from all issuances of the Company’s equity securities since inception (allocated on a pro rata daily basis for such issuances during the fiscal quarter of any such issuance), plus the Company’s retained earnings at the end of the most recently completed calendar quarter (without taking into account any non-cash equity compensation expense incurred in current or prior periods), less any amount that the Company pays for repurchases of the Company’s common stock since inception, and excluding any unrealized gains, losses or other items that do not affect realized net income (regardless of whether such items are included in other comprehensive income or loss, or in net income). This amount will be adjusted to exclude one-time events pursuant to changes in GAAP and certain non-cash items after discussions between the Manager and the Company’s independent directors and approval by a majority of the Company’s independent directors. To the extent asset impairment reduces the Company’s retained earnings at the end of any completed calendar quarter, it will reduce the management fee for such quarter. The Company’s stockholders’ equity for the purposes of calculating the management fee could be greater than the amount of stockholders’ equity shown on the financial statements. The Manager’s liability is limited under the management agreement and the Company has agreed to indemnify the Manager and its affiliates against certain liabilities. As a result, the Manager would not be liable for poor performance or losses. The initial term of the management agreement expired on May 16, 2014, but there continue to be automatic, one-year renewals at the end of the initial term and each year thereafter. For the year ended December 31, 2016, the Company incurred management fees of $2,472,353 (2015: $2,774,432; 2014: $2,627,592), included in Management Fee in the consolidated statement of operations, of which $400,000 (2015: $225,000) was accrued but had not been paid, included in fees and expenses payable to Manager in the consolidated balance sheets. Expense Reimbursement Pursuant to the management agreement, the Company is required to reimburse the Manager for operating expenses related to the Company incurred by the Manager, including accounting services, auditing and tax services, technology and office facilities, operations, compliance, legal and filing fees, and miscellaneous general and administrative costs, including the cost of non-investment management personnel of the Manager who spend all or a portion of their time managing the Company’s affairs. For the year ended December 31, 2016, the Company incurred reimbursable expenses of $4,747,275 (2015: $4,980,348; 2014: $3,247,683) included in operating expenses reimbursable to Manager in the consolidated statement of operations, of which $480,000 (2015: $592,903) was accrued but had not yet been paid, included in fees and expenses payable to Manager in the consolidated balance sheets. Fulfillment and Securitization Fees During 2015, the Company’s Manager accrued fees pursuant to Section 8(b) of the management agreement in addition to the Management Fee for services rendered in connection to FOAC’s aggregation of loans and subsequent contribution of these and certain other loans into the OAKS 2015-1 Trust and OAKS 2015-2 Trust. All of the invoices for such fees were approved by the Company’s Audit Committee pursuant to the Company’s related party transaction policies. There were no fees accrued during 2016 (2015: $200,000; 2014: $1,017,627) and no fees payable at December 31, 2016 (2015: $25,000; 2014: $272,000). Manager Equity Plan The Company has adopted a Manager Equity Plan under which the Company may compensate the Manager and the Company’s independent directors or consultants, or officers whom it may employ in the future. In turn, the Manager, in its sole discretion, grants such awards to its directors, officers, employees or consultants. The Company will be able to issue under the Manager Equity Plan up to 3.0% of the total number of issued and outstanding shares of common stock (on a fully diluted basis) at the time of each award. Stock based compensation arrangements may include incentive stock options and non-qualified stock options, stock appreciation rights, restricted stock, restricted stock units, unrestricted stock awards and other awards based on the Company’s common stock. During the years ended December 31, 2016, 2015 and 2014, the Company granted 4,500, 6,000 and 4,500 shares of common stock, respectively, to its independent directors pursuant to the Manager Equity Plan. The estimated fair value of these awards was $5.97, $10.07 and $11.27 per share on grant date, based on the closing price of the Company’s common stock on the NYSE on such date. The grants vest on the first anniversary of the grant date. As of the closing of the IPO on March 27, 2013, the Company’s Board of Directors granted the Manager 28,500 shares of restricted common stock. One-third of these restricted common stock shares vested on each of the first, second and third anniversaries of the grant date and are therefore, as at March 31, 2016 fully vested. The estimated fair value of these awards was $14.50 per share on grant date, based on the closing price of the Company’s common stock on the NYSE on such date. However, the Company accounts for restricted common stock shares issued to the Manager based on their aggregate fair value at measurement dates, per ASC 505, Equity , or ASC 505. On March 27, 2016, 9,500 shares of restricted stock granted to the Manager fully vested for net proceeds of $49,875. The following table summarizes the activity related to restricted common stock for the years December 31, 2016 and 2015: Year Ended December 31, 2016 2015 Shares Weighted Average Grant Date Fair Market Value Shares Weighted Average Grant Date Fair Market Value Outstanding Unvested Shares at Beginning of Period 15,500 $ 12.79 23,500 $ 13.88 Granted 4,500 5.97 6,000 10.07 Vested (15,500 ) 12.79 (14,000 ) 13.46 Outstanding Unvested Shares at End of Period 4,500 $ 5.97 15,500 $ 12.79 For the year ended December 31, 2016, the Company recognized compensation expense related to restricted common stock of $35,785 (2015: $63,275; 2014: $113,635). The Company has unrecognized compensation expense of $16,634 as of December 31, 2016 (2015: $46,405; 2014: $28,375) for unvested shares of restricted common stock. As of December 31, 2016, the weighted average period for which the unrecognized compensation expense will be recognized is 7.4 months. The Company’s lead independent director is also an independent director of an entity, MAXEX LLC (“MAXEX”), with which the Company has a commercial business relationship. The objective of MAXEX, together with its subsidiaries, is to create a whole loan mortgage trading platform which encompasses a centralized counterparty with a standardized purchase and sale contract and an independent dispute resolution process. As of December 31, 2016, the Company has sold $22.5 million of residential mortgage loans to a third party buyer that were effected through MAXEX, for which the Company did not receive compensation other than receipt of loan sale proceeds from the buyer. As of December 31, 2016, the Company has received $209,088 in fees, net of $44,354 in marketing services fees paid to MAXEX, relating to its provision to MAXEX of seller eligibility review and backstop services. The Company’s services entail evaluating the eligibility of loan sellers to participate in one or more of the loan exchanges operated by MAXEX. These fees are recorded on the Company’s consolidated balance sheet as a liability in the line item “Deferred Income”. See Note 15 for additional disclosure relating to the backstop services. |
GUARANTEES
GUARANTEES | 12 Months Ended |
Dec. 31, 2016 | |
Guarantees [Abstract] | |
Guarantees [Text Block] | NOTE 15 – GUARANTEES The Company, through FOAC, is party to customary and standard loan repurchase obligations in respect of residential mortgage loans that it has sold into securitizations or to third parties, to the extent it is determined that there has been a breach of standard seller representations and warranties in respect of such loans. To date, the Company has not been required to repurchase any loan due to a claim of breached seller reps and warranties. In July 2016, the Company announced that it would no longer aggregate and securitize residential mortgage loans; however, given FOAC’s extensive experience understanding and analyzing seller rep and warranty risk, the Company has sought to capitalize on its infrastructure and knowledge to become the provider of seller eligibility review and backstop services to MAXEX. See Note 14 for a further description of MAXEX. MAXEX’s wholly owned clearinghouse subsidiary, Central Clearing and Settlement LLC (“CCAS”) functions as the central counterparty with which buyers and sellers transact, and acts as the buyer’s counterparty for each transaction. Pursuant to a Master Agreement dated June 15, 2016, as amended August 29, 2016, among MAXEX, CCAS and FOAC, FOAC provides seller eligibility review services under which it reviews, approves and monitors sellers that are to sell loans via CCAS. Once approved, and having signed the standardized loan sale contract, the seller then sells loan(s) to CCAS, and CCAS simultaneously sells loan(s) to the buyer on substantially the same terms including reps and warranties. To the extent that a seller approved by FOAC fails to honor its obligation to repurchase a loan based on an arbitration finding that it breached its reps and warranties, FOAC is obligated to backstop the seller’s repurchase obligation. The term of the backstop guarantee is the earlier of the contractual maturity of the underlying mortgage, or its earlier repayment in full; however, the incidence of claims for breaches of reps and warranties declines over time and is considered unlikely to occur more than five years from the sale of a mortgage. The maximum potential amount of future payments that the Company could be required to make under the outstanding backstop guarantees, which represents the outstanding balance of all underlying mortgage loans sold by approved sellers to CCAS, was estimated to be $469,015,145 as of December 31, 2016. Amounts payable in excess of the outstanding principal balance of related mortgage, for example any premium paid by the loan buyer or costs associated with collecting mortgage payments, are not currently estimable. Amounts that may become payable under the backstop guarantee are normally recoverable from the related seller, as well as from any payments received on (or from the sale of property securing) the mortgage loan repurchased. Pursuant to the Master Agreement, FOAC is required to maintain minimum available liquidity equal to the greater of (i) $5.0 million or (ii) 0.10% of the aggregate unpaid principal balance of loans backstopped by FOAC, either directly or through a credit support agreement acceptable by MAXEX, As of December 31, 2016, the Company was not aware of any circumstances expected to lead to the triggering of a backstop guarantee obligation. The Company assessed its backstop guarantee obligation as of December 31, 2016 in accordance with ASC 460, “Guarantees”, and the carrying value of the liability was the unamortized portion of fees receivable in respect of the issuance of the guarantees. See Note 2 for more information on the Company’s accounting policy with respect to guarantee fees receivable. In addition, the Company enters into certain contracts that contain a variety of indemnification obligations, principally with the Manager, brokers and counterparties to repurchase agreements. The maximum potential future payment amount the Company could be required to pay under these indemnification obligations is unlimited. The Company has not incurred any costs to defend lawsuits or settle claims related to these indemnification obligations. As a result, the estimated fair value of these agreements is minimal. Accordingly, the Company recorded no liabilities for these agreements as of December 31, 2016. |
STOCKHOLDERS' EQUITY
STOCKHOLDERS' EQUITY | 12 Months Ended |
Dec. 31, 2016 | |
Stockholders' Equity Note [Abstract] | |
Stockholders' Equity Note Disclosure [Text Block] | NOTE 16 – STOCKHOLDERS’ EQUITY Ownership and Warrants As a result of the May 2012 and March 2013 private offerings of common stock to XL Investments Ltd, an indirectly wholly owned subsidiary of XL Group Ltd, XL Investments Ltd owns a significant minority investment in the Company. Pursuant to the terms of the May 2012 private offering, the Company agreed to issue to XL Investments Ltd warrants to purchase the Company’s common stock. The warrants were subsequently issued, effective as of September 29, 2012, and entitled XL Investments Ltd, commencing on July 25, 2013 (120 days following the closing of the Company’s IPO) to purchase an aggregate of 3,125,000 shares of the Company’s common stock at a per share exercise price equal to 105% of the $15.00 IPO price, or $15.75. Pursuant to the terms of the warrants and as a result of the deficiency dividend paid on December 27, 2016, the exercise price of the warrants was adjusted to $13.11 per share of common stock, and the number of shares of common stock purchasable upon exercise of the warrants increased to 3,753,492. XL Global, Inc., a subsidiary of XL Group Ltd, holds a minority stake in the Manager. Common Stock The Company has 450,000,000 authorized shares of common stock, par value $0.01 per share, with 17,539,258 and 14,656,394 shares issued and outstanding as of December 31, 2016 and December 31, 2015, respectively. On February 19, 2014, the Company issued 3,000,000 shares of common stock for $11.30 per share. Net proceeds to the Company were $31,927,377. The Company granted the underwriters the right to purchase up to an additional 450,000 shares of common stock from the Company at the offering price of $11.30 per share within 30 days after the issuance date of the common stock. The underwriters exercised their right and purchased 300,000 shares of common stock at the offering price of $11.30 per share on March 7, 2014, resulting in additional net proceeds of $3,214,325. On June 19, 2014, the Company issued 3,500,000 shares of common stock for $11.00 per share. Net proceeds to the Company were $38,442,925. The Company granted the underwriters the right to purchase up to an additional 525,000 shares of common stock from the Company at the offering price of $11.00 per share within 30 days after the issuance date of the common stock. The underwriters exercised their right and purchased 525,000 shares of common stock at the offering price of $11.00 per share on July 14, 2014, resulting in additional net proceeds of $5,769,750. On December 27, 2016 the Company paid a deficiency dividend in the amount of $19,384,684, representing $1.33 for each common share, payable in a combination of cash and stock with an aggregate payment of 20% of the deficiency dividend, or $3,878,042, in cash and 80% of the deficiency dividend, or $15,506,642, in stock. Pursuant to this deficiency dividend, the Company issued 2,936,864 shares of common stock for $5.28 per share. Stock Repurchase Program On December 15, 2015, the Company’s board of directors authorized a stock repurchase program (or the “Repurchase Program”), to repurchase up to $10 million of the Company’s outstanding common stock. Shares of the Company’s common stock may be purchased in the open market, including through block purchases, or through privately negotiated transactions, or pursuant to any trading plan that may be adopted in accordance with Rule 10b 18(b)(1) of the Securities Exchange Act of 1934, as amended. The timing, manner, price and amount of any repurchases will be determined at the Company’s discretion and the program may be suspended, terminated or modified at any time for any reason. Among other factors, the Company intends to only consider repurchasing shares of the Company’s common stock when the purchase price is less than the Company’s estimate of the Company’s current net asset value per common share. Shares of common stock repurchased by the Company under the Repurchase Program, if any, will be canceled and, until reissued by the Company, will be deemed to be authorized but unissued shares of the Company’s common stock. Through December 31, 2016, the Company had repurchased 126,856 shares of common stock at a weighted average share price of $5.09. At December 31, 2016, $9.4 million of common stock remained authorized for future share repurchase under the Repurchase Program. The following table presents a summary of the Company’s common stock repurchases under the Repurchase Program during the year ended December 31, 2016: Month Purchased Total Number of Shares Repurchased Weighted Average Price Paid per Share (1) Total Cost of Shares Repurchased January 2016 58,500.00 $ 4.87 $ 284,885 (1) Average price paid per share includes transaction costs Preferred Stock The Company has 50,000,000 authorized shares of preferred stock, par value $0.01 per share, with 1,610,000 shares of 8.75% Series A Cumulative Redeemable Preferred Stock (“Series A Preferred Stock”), par value of $0.01 per share and liquidation preference of $25.00 per share, issued and outstanding as of both December 31, 2016 and December 31, 2015. The Series A Preferred Stock is entitled to receive a dividend rate of 8.75% per year on the $25 liquidation preference and is senior to the common stock with respect to distributions upon liquidation, dissolution or winding up. The Company declares quarterly and pays monthly dividends on the shares of the Series A Preferred Stock, in arrears, on the 27 th th On December 23, 2013, the Company closed an offering of 800,000 shares of Series A Preferred Stock. The net proceeds to the Company from this issuance were $18,060,897. The Company granted the underwriters the right to purchase up to an additional 120,000 shares of Series A Preferred Stock from the Company at the offering price of $25.00 per share within 30 days after the issuance date of Series A Preferred Stock. The underwriters fully exercised their right and purchased 120,000 shares of Series A Preferred Stock at $25.00 per share on January 24, 2014, resulting in additional net proceeds of $2,778,201. On May 27, 2014, the Company closed an offering of 690,000 additional shares of Series A Preferred Stock, including the concurrent exercise of the underwriters’ overallotment option. The net proceeds to the Company from this issuance were $16,325,373. Distributions to stockholders For the 2016 taxable year to date, the Company has declared dividends to common stockholders totaling $29,898,918, or $2.04 per share. The following table presents cash dividends declared by the Company on its common stock for the year ended December 31, 2016: Declaration Date Record Date Payment Date Dividend Amount Cash Dividend Per Share December 16, 2015 January 15, 2016 January 28, 2016 $ 878,274 $ 0.05998 December 16, 2015 February 16, 2016 February 26, 2016 $ 875,874 $ 0.05982 December 16, 2015 March 15, 2016 March 30, 2016 $ 875,873 $ 0.05982 March 16, 2016 April 15, 2016 April 28, 2016 $ 875,874 $ 0.05982 March 16, 2016 May 16, 2016 May 27, 2016 $ 875,873 $ 0.05982 March 16, 2016 June 15, 2016 June 29, 2016 $ 875,874 $ 0.05982 June 15, 2016 July 15, 2016 July 28, 2016 $ 875,874 $ 0.05982 June 15, 2016 August 15, 2016 August 30, 2016 $ 876,144 $ 0.05984 June 15, 2016 September 15, 2016 September 29, 2016 $ 876,144 $ 0.05984 September 16, 2016 October 17, 2016 October 28, 2016 $ 876,144 $ 0.05984 September 16, 2016 November 15, 2016 November 29, 2016 $ 876,144 $ 0.05984 September 16, 2016 December 15, 2016 December 29, 2016 $ 876,144 $ 0.05984 November 9, 2016 November 21, 2016 December 27, 2016 $ 19,384,684 $ 1.32394 The following table presents cash dividends declared by the Company on its Series A Preferred Stock for the year ended December 31, 2016: Declaration Date Record Date Payment Date Dividend Amount Cash Dividend Per Share December 16, 2015 January 15, 2016 January 27, 2016 $ 293,503 $ 0.18230 December 16, 2015 February 16, 2016 February 26, 2016 $ 293,503 $ 0.18230 December 16, 2015 March 15, 2016 March 28, 2016 $ 293,503 $ 0.18230 March 16, 2016 April 15, 2016 April 27, 2016 $ 293,503 $ 0.18230 March 16, 2016 May 16, 2016 May 27, 2016 $ 293,503 $ 0.18230 March 16, 2016 June 15, 2016 June 27, 2016 $ 293,503 $ 0.18230 June 15, 2016 July 15, 2016 July 27, 2016 $ 293,503 $ 0.18230 June 15, 2016 August 15, 2016 August 29, 2016 $ 293,503 $ 0.18230 June 15, 2016 September 15, 2016 September 27, 2016 $ 293,503 $ 0.18230 September 16, 2016 October 17, 2016 October 27, 2016 $ 293,503 $ 0.18230 September 16, 2016 November 15, 2016 November 28, 2016 $ 293,503 $ 0.18230 September 16, 2016 December 15, 2016 December 27, 2016 $ 293,503 $ 0.18230 |
EARNINGS PER SHARE (as restated
EARNINGS PER SHARE (as restated) | 12 Months Ended |
Dec. 31, 2016 | |
Earnings Per Share [Abstract] | |
Earnings Per Share [Text Block] | NOTE 17 – EARNINGS PER SHARE (as restated) In accordance with ASC 260, outstanding instruments that contain rights to non-forfeitable dividends are considered participating securities. The Company is required to apply the two-class method or the treasury stock method of computing basic and diluted earnings per share when there are participating securities outstanding. The Company has determined that outstanding unvested restricted shares issued under the Manager Equity Plan are participating securities, and they are therefore included in the computation of basic and diluted earnings per share. The following tables provide additional disclosure regarding the computation for the years ended December 31, 2016, December 31, 2015 and December 31, 2014: Year Ended December 31, 2016 Year Ended December 31, 2015 Year Ended December 31, 2014 Net income (loss) $ (10,426,645 ) $ 450,479 $ 3,313,785 Less dividends paid: Common stock $ 29,898,918 $ 19,874,663 $ 18,229,875 Preferred stock 3,522,036 3,522,036 2,887,296 33,420,954 23,396,699 21,117,171 Undistributed earnings $ (43,847,599 ) $ (22,946,220 ) $ (17,803,386 ) Unvested Share-Based Unvested Share-Based Unvested Share-Based Payment Awards Common Stock Payment Awards Common Stock Payment Awards Common Stock Distributed earnings $ 2.04 $ 2.04 $ 1.35 $ 1.35 $ 1.47 $ 1.47 Undistributed earnings (deficit) (2.99 ) (2.99 ) (1.56 ) (1.56 ) (1.44 ) (1.44 ) Total $ (0.95 ) $ (0.95 ) $ (0.21 ) $ (0.21 ) $ 0.03 $ 0.03 No adjustment was required for the calculation of diluted earnings per share for the warrants described in Note 16 because the warrants’ exercise price is greater than the average market price of the common shares for the period, and thereby anti-dilutive. |
SEGMENT REPORTING
SEGMENT REPORTING | 12 Months Ended |
Dec. 31, 2016 | |
Segment Reporting [Abstract] | |
Segment Reporting Disclosure [Text Block] | NOTE 18 – SEGMENT REPORTING The Company invests in a portfolio comprised of MBS, residential mortgage loans, and other mortgage-related investments, and operates as a single reporting segment. |
INCOME TAXES (as restated)
INCOME TAXES (as restated) | 12 Months Ended |
Dec. 31, 2016 | |
Income Tax Disclosure [Abstract] | |
Income Tax Disclosure [Text Block] | NOTE 19 – INCOME TAXES (as restated) Certain activities of the Company are conducted through a TRS, FOAC, which is therefore subject to tax as a corporation. Pursuant to ASC 740, deferred tax assets are reduced by a valuation allowance if, based on the weight of available evidence, it is more likely than not (a likelihood of more than 50%) that some portion or all of the deferred tax assets will not be realized. The following table reconciles the Company’s TRS GAAP net income (loss) to taxable income (in thousands): Year Ended December 31, 2016 2015 2014 (in thousands) (in thousands) (in thousands) GAAP consolidated net income (loss) attributable to Five Oaks Investment Corp (10,426 ) 450 3,313 GAAP net loss (income) from REIT operations 9,090 (1,826 ) (3,650 ) GAAP net income (loss) of taxable subsidiary (1,336 ) (1,376 ) (337 ) Capitalized transaction fees (41 ) (41 ) 596 Unrealized gain (loss) 1,964 2,041 (3,670 ) Deferred income 204 - - Tax income (loss) of taxable subsidiary before utilization of net operating losses 791 624 (3,411 ) Utilizations of net operating losses (791 ) (624 ) - Net tax income of taxable subsidiaries - - - The TRS has a deferred tax asset on which the Company has a 100% valuation allowance, comprised of the following (in thousands): As of December 31, 2016 As of December 31, 2015 Accumulated net operating losses of TRS 758 1,058 Unrealized gain (loss) 127 (618 ) Capitalized transaction costs 196 210 Deferred income 77 - AMT Credit 12 9 Deferred tax asset 1,170 659 Valuation allowance (1,170 ) (659 ) Net non-current deferred tax asset (liability) - - The Company has provided a valuation allowance against its deferred tax asset that results in no deferred tax asset at December 31, 2016, and December 31, 2015. The Company recorded a 100% valuation allowance related to the TRS net deferred tax asset because it believes it is more likely than not that the deferred tax asset will not be fully realized. The valuation allowance increased by $511,000 as a result of the corresponding increase in the deferred tax asset. The realization of the deferred tax asset associated with net operating losses is dependent on projections of future taxable income, for which there is uncertainty when considering historic results and the nature of the business. Accordingly, no provision or benefit (current or deferred tax expense) for income taxes has been reflected in the accompanying financial statements. At December 31, 2016, and 2015 the TRS had net operating loss carryforwards for federal income tax purposes of $2.0 and $2.8 million, which are available to offset future taxable income and begin expiring in 2034. As of December 31, 2016, the Company is not aware of any uncertain tax positions, but the Company could be subject to federal and state taxes for its open tax years of 2014, 2015 and 2016. The Company has potential nexus in several states in which it did not file a 2015 tax return. The exposure would be immaterial due to the Company being in a Net Operating Loss (NOL) position. The losses incurred in 2014 and 2015 would be sufficient to offset any taxable income in 2016. For state purposes the Company is in the process of determining filing requirements, but anticipates materially all prior losses to be recognized. The Company declared and paid in the fourth quarter of 2016 a deficiency dividend relating to a determination of an inability to offset certain net gains on hedging transactions in 2013 against net capital losses on the sale of certain mortgage-backed securities. In connection with this declaration, the Company provisioned an amount of $1.86 million for interest charges expected to be paid to the IRS following the payment of the dividend. This amount is included in the Company’s consolidated balance sheets in the line item “Other accounts payable and accrued expenses”, and is included in “Other interest expense” in the Company’s consolidated statements of operations. The Company’s estimate of the expected interest charges was based on the anticipated timing of the deficiency dividend payment, and the Company’s understanding of the rules, procedures and existing precedent relating to such dividend payments. |
SUBSEQUENT EVENT
SUBSEQUENT EVENT | 12 Months Ended |
Dec. 31, 2016 | |
Subsequent Events [Abstract] | |
Subsequent Events [Text Block] | NOTE 20 – SUBSEQUENT EVENT On March 8, 2017, the Company paid an amount of $2.01 million to the IRS for interest charges related to the fourth quarter 2016 deficiency dividend payment. The amount paid exceeds the provision of $1.86 million taken in the third quarter of 2016 due to the timing of the payment and accordingly the Company will incur an additional interest expense of $0.15 million in the first quarter of 2017. The revised amount paid is based on the Company’s understanding of the rules, procedures and existing precedent relating to such dividend payments. As such, the actual amount of interest payable may differ from the Company’s estimate, and such difference could be material. |
RESTATEMENT OF PREVIOUSLY ISSUE
RESTATEMENT OF PREVIOUSLY ISSUED FINANCIAL STATEMENTS | 12 Months Ended |
Dec. 31, 2016 | |
Accounting Changes and Error Corrections [Abstract] | |
Accounting Changes and Error Corrections [Text Block] | NOTE 21 – RESTATEMENT OF PREVIOUSLY ISSUED FINANCIAL STATEMENTS In connection with the preparation of the Quarterly Report on Form 10-Q for the period ended September 30, 2018, the Company determined that it had improperly accounted for unrealized losses on Residential Mortgage-Backed Securities (“RMBS”) Interest Only Certificates (“RMBS IOs”) upon our deconsolidation of the JPMMT 2014-OAK4 Trust and incorrectly reported releases of credit reserves relating to certain RMBS upon their sale in 2016. The unrealized losses on the RMBS IOs were incorrectly reported through other comprehensive income (loss) instead of through unrealized gain (loss) on fair value options securities for the fiscal year ended December 31, 2016. The release of credit reserves was incorrectly reported through other comprehensive income (loss) instead of through our consolidated statement of operations for the fiscal year ended December 31, 2016. While having no impact on total stockholders’ equity, as a result of these errors, accumulated other comprehensive income (loss) and accumulated earnings (deficit) were incorrectly stated by equal and offsetting amounts in our consolidated balance sheet as of December 31, 2016. The following tables represent the restated audited consolidated balance sheet, restated audited consolidated statement of operations, restated audited statement of other comprehensive income and restated statement of cash flows as of, and for the year ended December 31, 2016. FIVE OAKS INVESTMENT CORP. AND SUBSIDIARIES Consolidated Balance Sheets December 31, 2016 As previously reported Restatement adjustments As restated ASSETS Available-for-sale securities, at fair value (includes pledged securities of $876,121,505 for December 31, 2016 $ 870,929,601 $ - $ 870,929,601 Mortgage loans held-for-sale, at fair value 2,849,536 - 2,849,536 Multi-family loans held in securitization trusts, at fair value 1,222,905,433 - 1,222,905,433 Residential loans held in securitization trusts, at fair value 141,126,720 - 141,126,720 Mortgage servicing rights, at fair value 3,440,809 - 3,440,809 Cash and cash equivalents 27,534,374 - 27,534,374 Restricted cash 10,355,222 - 10,355,222 Deferred offering costs 96,489 - 96,489 Accrued interest receivable 7,619,717 - 7,619,717 Dividends receivable 122 - 122 Investment related receivable 3,914,458 - 3,914,458 Derivative assets, at fair value 8,053,813 - 8,053,813 Other assets 774,909 - 774,909 Total assets $ 2,299,601,203 $ - $ 2,299,601,203 LIABILITIES AND STOCKHOLDERS' EQUITY LIABILITIES: Repurchase agreements: Available-for-sale securities $ 804,811,000 $ - $ 804,811,000 Multi-family securitized debt obligations 1,204,583,678 - 1,204,583,678 Residential securitized debt obligations 134,846,348 - 134,846,348 Accrued interest payable 5,467,916 - 5,467,916 Dividends payable 39,132 - 39,132 Deferred income 203,743 - 203,743 Due to broker 4,244,678 - 4,244,678 Fees and expenses payable to Manager 880,000 - 880,000 Other accounts payable and accrued expenses 2,057,843 - 2,057,843 Total liabilities 2,157,134,338 - 2,157,134,338 STOCKHOLDERS' EQUITY: Preferred Stock: par value $0.01 per share; 50,000,000 shares authorized, 8.75% Series A cumulative redeemable, $25 liquidation preference, 1,610,000 issued and outstanding at December 31, 2016 37,156,972 - 37,156,972 Common Stock: par value $0.01 per share; 450,000,000 shares authorized, 17,539,258 shares issued and outstanding, at December 31, 2016 175,348 - 175,348 Additional paid-in capital 204,264,868 - 204,264,868 Accumulated other comprehensive income (loss) (9,268,630 ) 2,436,690 (6,831,940 ) Cumulative distributions to stockholders (89,224,194 ) - (89,224,194 ) Accumulated earnings (deficit) (637,499 ) (2,436,690 ) (3,074,189 ) Total stockholders' equity 142,466,865 - 142,466,865 Total liabilities and stockholders' equity $ 2,299,601,203 $ - $ 2,299,601,203 FIVE OAKS INVESTMENT CORP. AND SUBSIDIARIES Consolidated Statements of Operations Year Ended December 31, 2016 As previously reported Restatement adjustments As restated Revenues: Interest income: Available-for-sale securities $ 23,475,765 $ - $ 23,475,765 Mortgage loans held-for-sale 430,986 - 430,986 Multi-family loans held in securitization trusts 58,587,780 - 58,587,780 Residential loans held in securitization trusts 10,585,191 - 10,585,191 Cash and cash equivalents 41,994 - 41,994 Interest expense: - Repurchase agreements - available-for-sale securities (6,237,777 ) - (6,237,777 ) Repurchase agreements - mortgage loans held-for-sale (237,807 ) - (237,807 ) Multi-family securitized debt obligations (54,940,386 ) - (54,940,386 ) Residential securitized debt obligations (8,117,402 ) - (8,117,402 ) Net interest income 23,588,344 - 23,588,344 Other-than-temporary impairments Increase in credit reserves (541,342 ) 1,286,834 745,492 Additional other-than-temporary credit impairment losses (183,790 ) - (183,790 ) Total impairment losses recognized in earnings (725,132 ) 1,286,834 561,702 Other income: Realized gain (loss) on sale of investments, net (7,216,137 ) - (7,216,137 ) Change in unrealized gain (loss) on fair value option securities (4,683,410 ) (3,723,524 ) (8,406,934 ) Realized gain (loss) on derivative contracts, net (3,089,001 ) - (3,089,001 ) Change in unrealized gain (loss) on derivative contracts, net 5,495,463 - 5,495,463 Realized gain (loss) on mortgage loans held-for-sale 94,187 - 94,187 Change in unrealized gain (loss) on mortgage loans held-for-sale (151,023 ) - (151,023 ) Change in unrealized gain (loss) on mortgage service rights (827,864 ) - (827,864 ) Change in unrealized gain (loss) on multi-family loans held in securitization trusts (5,219,530 ) - (5,219,530 ) Change in unrealized gain (loss) on residential loans held in securitization trusts 404,720 - 404,720 Tax interest expense (1,860,000 ) - (1,860,000 ) Servicing income 932,424 - 932,424 Other income 32,276 - 32,276 Total other income (loss) (16,087,895 ) (3,723,524 ) (19,811,419 ) Expenses: Management fee 2,472,353 - 2,472,353 General and administrative expenses 5,867,851 - 5,867,851 Operating expenses reimbursable to Manager 4,747,275 - 4,747,275 Other operating expenses 1,480,341 - 1,480,341 Compensation expense 197,452 - 197,452 Total expenses 14,765,272 - 14,765,272 Net income (loss) (7,989,955 ) (2,436,690 ) (10,426,645 ) Dividends to preferred stockholders (3,522,036 ) - (3,522,036 ) Net income (loss) attributable to common stockholders $ (11,511,991 ) $ (2,436,690 ) $ (13,948,681 ) Earnings (loss) per share: Net income attributable to common stockholders (basic and diluted) $ (11,511,991 ) $ (2,436,690 ) $ (13,948,681 ) Weighted average number of shares of common stock outstanding 14,641,701 14,641,701 14,641,701 Basic and diluted income per share $ (0.79 ) $ (0.17 ) $ (0.95 ) Dividends declared per share of common stock $ 2.04 $ - $ 2.04 FIVE OAKS INVESTMENT CORP. AND SUBSIDIARIES Consolidated Statements of Comprehensive Income (Loss) Year Ended December 31, 2016 As previously reported Restatement adjustments As restated Net income $ (7,989,955 ) $ (2,436,690 ) $ (10,426,645 ) Other comprehensive income (loss): Increase (decrease) in net unrealized gain on available-for-sale securities, net (3,824,461 ) 3,723,524 (100,937 ) Reclassification adjustment for net gain (loss) included in net income (5,589,740 ) - (5,589,740 ) Reclassification adjustment for other-than-temporary impairments included in net income 541,342 (1,286,834 ) (745,492 ) Total other comprehensive income (loss) (8,872,859 ) 2,436,690 (6,436,169 ) Less: Dividends to preferred stockholders (3,522,036 ) - (3,522,036 ) Comprehensive income (loss) attributable to common stockholders $ (20,384,850 ) $ - $ (20,384,850 ) FIVE OAKS INVESTMENT CORP. AND SUBSIDIARIES Consolidated Statements of Cash Flows December 31, 2016 As previously reported Restatement adjustments As restated Cash flows from operating activities: Net income (loss) $ (7,989,955 ) $ (2,436,690 ) $ (10,426,645 ) Adjustments to reconcile net income (loss) to net cash provided by operating activities: Other-than-temporary impairment charges 725,132 (1,286,834 ) (561,702 ) Amortization/accretion of available-for-sale securities premiums and discounts, net (6,751,667 ) - (6,751,667 ) Realized (gain) loss on sale of investments, net 7,216,137 - 7,216,137 Realized (gain) loss on derivative contracts 3,089,001 - 3,089,001 Realized (gain) loss on mortgage loans held-for-sale (94,187 ) - (94,187 ) Unrealized (gain) loss on fair value option securities 4,683,410 3,723,524 8,406,934 Unrealized (gain) loss on derivative contracts (5,495,463 ) - (5,495,463 ) Unrealized (gain) loss on mortgage loans held-for-sale 151,023 - 151,023 Unrealized (gain) loss on mortgage service rights 827,864 - 827,864 Unrealized (gain) loss on multi-family loans held in securitization trusts 5,219,530 - 5,219,530 Unrealized (gain) loss on residential loans held in securitization trusts (404,720 ) - (404,720 ) Restricted stock compensation expense 35,785 - 35,785 Net change in: Accrued interest receivable (707,019 ) - (707,019 ) Deferred offering costs (96,489 ) - (96,489 ) Dividends receivable 25,900 - 25,900 Other assets (244,441 ) - (244,441 ) Accrued interest payable 119,993 - 119,993 Deferred income 203,743 - 203,743 Fees and expenses payable to Manager 37,097 - 37,097 Other accounts payable and accrued expenses 1,790,336 - 1,790,336 Net cash provided by operating activities 2,341,010 - 2,341,010 Cash flows from investing activities: Purchase of available-for-sale securities (585,984,081 ) - (585,984,081 ) Purchase of mortgage loans held-for-sale (14,772,535 ) - (14,772,535 ) Proceeds from sales of available-for-sale securities 263,153,843 - 263,153,843 Proceeds from mortgage loans held-for-sale 22,490,929 - 22,490,929 Proceeds from FHLBI stock 2,403,000 - 2,403,000 Net proceeds from (payments for) derivative contracts (3,089,001 ) - (3,089,001 ) Principal payments from available-for-sale securities 96,655,967 - 96,655,967 Principal payments from mortgage loans held-for-sale 275,636 - 275,636 Investment related receivable (2,323,115 ) - (2,323,115 ) Restricted cash (2,180,584 ) - (2,180,584 ) Due to broker 4,244,678 - 4,244,678 Net cash used in investing activities (219,125,263 ) - (219,125,263 ) Cash flows from financing activities: Net proceeds from issuance of common stock 15,503,885 - 15,503,885 Purchase of treasury stock (283,565 ) - (283,565 ) Dividends paid on common stock (29,898,918 ) - (29,898,918 ) Dividends paid on preferred stock (3,522,036 ) - (3,522,036 ) Proceeds from repurchase agreements - available-for-sale securities 7,940,492,000 - 7,940,492,000 Proceeds from repurchase agreements - mortgage loans held-for-sale 16,405,081 - 16,405,081 Payments for FHLBI advances (49,697,000 ) - (49,697,000 ) Principal repayments of repurchase agreements - available-for-sale securities (7,644,912,000 ) - (7,644,912,000 ) Principal repayments of repurchase agreements - mortgage loans held-for-sale (25,909,538 ) - (25,909,538 ) Net cash provided by financing activities 218,177,909 - 218,177,909 Net increase (decrease) in cash and cash equivalents 1,393,656 - 1,393,656 Cash and cash equivalents, beginning of period 26,140,718 - 26,140,718 Cash and cash equivalents, end of period $ 27,534,374 $ - $ 27,534,374 Supplemental disclosure of cash flow information Cash paid for interest $ 6,355,591 $ - $ 6,355,591 Non-cash investing and financing activities information $ $ $ Dividends declared but not paid at end of period $ 39,132 $ - $ 39,132 Net change in unrealized gain (loss) on available-for-sale securities $ (8,872,859 ) $ 2,436,690 $ (6,436,169 ) Consolidation of multi-family loans held in securitization trusts $ 1,227,523,075 $ - $ 1,227,523,075 Consolidation of residential loans held in securitization trusts $ 141,597,866 $ - $ 141,597,866 Consolidation of multi-family securitized debt obligations $ 1,209,181,035 $ - $ 1,209,181,035 Consolidation of residential securitized debt obligations $ 135,223,045 $ - $ 135,223,045 |
QUARTERLY FINANCIAL DATA (UNAUD
QUARTERLY FINANCIAL DATA (UNAUDITED) | 12 Months Ended |
Dec. 31, 2016 | |
Quarterly Financial Information Disclosure [Abstract] | |
Quarterly Financial Information [Text Block] | NOTE 22 – QUARTERLY FINANCIAL DATA (UNAUDITED) The following table presents a comparative breakdown of our unaudited summary quarterly financial data for the immediately preceding eight quarters. 2016 Quarter Ended (as restated *) March 31 June 30 * September 30 * December 31* Total interest income $ 24,617 $ 23,610 $ 22,733 $ 22,162 Total interest expense (18,857 ) (17,837 ) (16,580 ) (16,259 ) Net interest income 5,760 5,772 6,153 5,903 Other-than-temporary impairment (21 ) (146 ) (204 ) 933 Other income (loss) (18,275 ) (9,561 ) (908 ) 8,932 Total expenses 4,412 3,864 3,191 3,298 Net income (loss) (16,948 ) (7,800 ) 1,851 12,470 Net income (loss) attributable to common shareholders (basic and diluted) (17,828 ) (8,671 ) 970 11,580 Earnings (loss) per share: Net income (loss) attributable to common shareholders (basic and diluted) (17,828 ) (8,671 ) 970 11,580 Weighted average number of shares of common stock outstanding: 14,605,515 14,597,894 14,600,193 14,762,006 Basic and diluted income (loss) per share (1.22 ) (0.59 ) 0.07 0.78 2015 Quarter Ended March 31 June 30 September 30 December 31 Total interest income $ 31,043 $ 29,632 $ 27,401 $ 26,338 Total interest expense (21,940 ) (21,062 ) (20,301 ) (19,801 ) Net interest income 9,103 8,570 7,100 6,537 Other-than-temporary impairment (4,868 ) 567 (351 ) 1,016 Other income (loss) (5,232 ) (1,216 ) (4,944 ) 1,289 Total expenses 4,133 4,120 3,505 5,363 Net income (loss) (5,130 ) 3,801 (1,699 ) 3,479 Net income (loss) attributable to common shareholders (basic and diluted) (6,011 ) 2,930 (2,579 ) 2,588 Earnings (loss) per share: Net income (loss) attributable to common shareholders (basic and diluted) (6,011 ) 2,930 (2,579 ) 2,588 Weighted average number of shares of common stock outstanding: 14,718,750 14,721,492 14,724,750 14,719,632 Basic and diluted income (loss) per share (0.41 ) 0.20 (0.18 ) 0.18 |
Mortgage Loans on Real Estate
Mortgage Loans on Real Estate | 12 Months Ended |
Dec. 31, 2016 | |
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Abstract] | |
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Text Block] | Schedule IV – Mortgage Loans on Real Estate (1) (dollars in thousands) Asset Type Rate Final Maturity Date Periodic Payment Terms Face Amount Carrying Amount Residential whole loan at fair value 3.625 % 4/1/2030 P&I $ 558 $ 559 Residential whole loan at fair value 4.375 % 11/1/2044 P&I 502 507 Residential whole loan at fair value 3.750 % 5/1/2046 P&I 509 498 Residential whole loan at fair value 4.375 % 6/1/2046 P&I 585 591 Residential whole loan at fair value 4.125 % 7/1/2046 P&I 696 695 $ 2,850 $ 2,850 (1) No loans subject to delinquent principal or interest Reconciliation Beginning Balance 10,650,566 Additions during period Mortgage loans purchased 14,650,573 Other 3,215 Deductions during period Mortgage loans sold (22,169,409 ) Amortization (284,963 ) Ending Balance 2,849,981 |
SUMMARY OF SIGNIFICANT ACCOUN_2
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 12 Months Ended |
Dec. 31, 2016 | |
Accounting Policies [Abstract] | |
Basis of Accounting, Policy [Policy Text Block] | Basis of Presentation These financial statements have been prepared in accordance with U.S. GAAP and are expressed in United States dollars. The consolidated financial statements of the Company include the accounts of its subsidiaries. |
Consolidation, Policy [Policy Text Block] | Principles of Consolidation The accompanying consolidated financial statements of the Company include the accounts of the Company and all its subsidiaries which are majority-owned, controlled by the Company or a variable interest entity where the Company is the primary beneficiary. All significant intercompany transactions have been eliminated on consolidation. |
Consolidation, Variable Interest Entity, Policy [Policy Text Block] | VIEs An entity is referred to as a VIE if it lacks one or more of the following characteristics: (1) sufficient equity at risk to finance its activities without additional subordinated financial support provided by any parties, including the equity holders; (2) as a group the holders of the equity investment at risk have (a) the power, through voting rights or similar rights, to direct the activities of a legal entity that most significantly impacts the entity's economic performance, (b) the obligation to absorb the expected losses of the legal entity and (c) the right to receive the expected residual returns of the legal entity; and (3) the voting rights of these investors are proportional to their obligations to absorb the expected losses of the entity, their rights to receive the expected returns of their equity, or both, and whether substantially all of the entity's activities involve or are conducted on behalf of an investor that has disproportionately fewer voting rights. An investment that lacks one or more of the above three characteristics is considered to be a VIE. The Company reassesses its initial evaluation of an entity as a VIE based upon changes in the facts and circumstances pertaining to the VIE. VIEs are required to be consolidated by their primary beneficiary. The primary beneficiary of a VIE is determined to be the party that has both the power to direct the activities that most significantly impact the VIE's economic performance and the obligation to absorb losses of, or the right to receive benefits from, the VIE that could potentially be significant to the VIE. This determination may involve complex and subjective analyses. In general, the obligation to absorb losses is a function of holding a majority of the first loss tranche, while the ability to direct the activities that most significantly impact the VIEs economic performance will be determined based upon the rights associated with acting as the directing certificate holder, or equivalent, in a given transaction. The Company is required to reconsider its evaluation of whether to consolidate a VIE each reporting period based upon changes in the facts and circumstances pertaining to the VIE. The Company has evaluated its Non-Agency RMBS and Multi-Family MBS investments to determine if each represents a variable interest in a VIE. The Company monitors these investments and analyzes them for potential consolidation. The Company's real estate securities investments represent variable interests in VIEs. At December 31, 2016, the Company determined that it continues to be the primary beneficiary of two Multi-Family MBS transactions (FREMF 2011-K13 and FREMF 2012-KF01), and one residential mortgage loan transaction (CSMC 2014-OAK1), in each case based on its power to direct the trust’s activities and its obligations to absorb losses derived from the ownership of the first-loss tranches. In the case of the FREMF 2011-K13 and the FREMF 2012-KF01 trusts, the Company determined that it is the primary beneficiary of certain intermediate trusts that have the power to direct the activities and the obligations to absorb losses of the underlying trusts. Accordingly, the Company consolidated the assets, liabilities, income and expenses of each of the underlying trusts, and has elected the fair value option in respect of the assets and liabilities of each trust. However, the Company’s maximum exposure to loss from consolidated trusts was $24,716,861 and $117,566,291, respectively, at December 31, 2016, and December 31, 2015. At December 31, 2016 and December 31, 2015, with the exception of the above transactions, the maximum exposure of the Company to VIEs was limited to the fair value of its investment in Non-Agency RMBS and Multi-Family MBS as disclosed in Note 4 (Non-Agency RMBS $7,592,802 and $92,107,727 respectively, and Multi-Family MBS $73,146,566 and $104,025,797, respectively). GAAP also requires us to consider whether securitizations we sponsor and other transfers of financial assets should be treated as sales or financings. During the year ended December 31, 2015, the Company transferred residential mortgage loans with an aggregate unpaid principal balance of $518,455,163 to Oaks Mortgage Trust Series 2015-1 and Oaks Mortgage Trust 2015-2, and accounted for these transfers as sales for financial reporting purposes, in accordance with Accounting Standards Codification (“ASC”) 860. The Company also determined that it was not the primary beneficiary of these VIEs because it lacked the power to direct the activities that will have the most significant economic impact on the entities. The Company’s analysis incorporates the considerations applicable to Consolidation (Topic 810). The Company’s determination involves complex and subjective analysis resulting from the various legal and structural aspects of each transaction. This analysis has focused in particular on ASC 810-10-25-38C and 25-38D, along with ASC 810-10-25-38G and ASC 810-10-15-13A and 15-13B. The Company’s maximum exposure to loss from these VIEs was limited to the fair value of its investments in Non-Agency RMBS issued by the two VIEs, with an aggregate fair value of $4,413,403 at December 31, 2016 (December 31, 2015: $30,383,343). This amount is included in Available-for-sale (“AFS”) securities on the Company’s consolidated balance sheet. The Company is party to customary and standard repurchase obligations in respect of loans that it has sold to the two VIEs to the extent they have breached standard representations and warranties, but is not a party to arrangements to provide financial support to the VIEs that the Company believes could expose it to additional loss. |
Use of Estimates, Policy [Policy Text Block] | Use of Estimates The financial statements have been prepared on the accrual basis of accounting in accordance with GAAP. The preparation of financial statements in conformity with GAAP requires the Company to make a number of significant estimates. These include estimates of fair value of certain assets and liabilities, amount and timing of credit losses, prepayment rates, and other estimates that affect the reported amounts of certain assets and liabilities as of the date of the financial statements and the reported amounts of certain revenues and expenses during the reported period. It is likely that changes in these estimates (e.g. valuation changes due to supply and demand, credit performance, prepayments, interest rates, or other reasons) will occur in the near term. The Company’s estimates are inherently subjective in nature and actual results could differ from its estimates and the differences may be material. |
Cash and Cash Equivalents, Policy [Policy Text Block] | Cash and Cash Equivalents Cash and cash equivalents include cash held in bank accounts on an overnight basis and other short term deposit accounts with banks having original maturities of 90 days or less. The Company maintains its cash and cash equivalents in highly rated financial institutions, and at times these balances exceed insurable amounts. |
Cash and Cash Equivalents, Restricted Cash and Cash Equivalents, Policy [Policy Text Block] | Restricted Cash Restricted cash represents the Company’s cash held by counterparties as collateral against the Company’s securities, derivatives and/or repurchase agreements. Cash held by counterparties as collateral is not available to the Company for general corporate purposes, but may be applied against amounts due to securities, derivatives or repurchase counterparties or returned to the Company when the collateral requirements are exceeded or, at the maturity of the derivative or repurchase agreement. |
Deferred Income [Policy Text Block] | Deferred Income Certain service revenues received in the period are recorded as a liability in the Company’s consolidated balance sheets in the line item “Deferred income”, for subsequent recognition as income in the Company’s consolidated statements of operations. |
Deferred Offering Costs, Policy [Policy Text Block] | Deferred Offering Costs In accordance with ASC Subtopic 505-10, the direct costs incurred to issue shares classified as equity, such as legal and accounting fees, should be deducted from the related proceeds and the net amount recorded as stockholders’ equity. Accordingly, payments made by the Company in respect of such costs related to the issuance of shares are recorded as an asset in the accompanying consolidated balance sheets in the line item “Deferred offering costs”, for subsequent deduction from the related proceeds upon closing of the offering. To the extent that certain costs, in particular legal fees, are known to have been accrued but have not yet been invoiced and paid, they are included in “Other accounts payable and accrued expenses” on the accompanying consolidated balance sheets. |
Deferred Charges, Policy [Policy Text Block] | Deferred Securitization Costs Certain direct costs previously associated with the acquisition of residential mortgage loans were payable by the Company in advance of the subsequent securitization of these loans. To the extent that such costs, if any, were expected to be recovered at the time of a forthcoming securitization, payments made by the Company in respect of such costs if any are recorded as an asset in the Company’s consolidated balance sheets in the line item “Deferred securitization costs”, for subsequent deduction from the securitization proceeds upon the closing of that securitization. |
Available-for-Sale Securities, at Fair Value, Policy [Policy Text Block] | Available-for-Sale Securities, at Fair Value |
Revenue Recognition, Policy [Policy Text Block] | Revenue Recognition, Premium Amortization, and Discount Accretion Interest income on the Company’s AFS securities portfolio, with the exception of Non-Agency RMBS IOs (as further described below), is accrued based on the actual coupon rate and the outstanding principal balance of such securities. The Company recognizes interest income using the effective interest method for all AFS securities. As such, premiums and discounts are amortized or accreted into interest income over the lives of the securities in accordance with ASC 310-20, “Nonrefundable Fees and Other Costs”, ASC 320-10, “Investments - Debt and Equity Securities” or ASC 325-40, “Beneficial Interests in Securitized Financial Assets”, as applicable. Total interest income is recorded in the “Interest Income” line item on the consolidated statements of operations. On at least a quarterly basis for securities accounted for under ASC 320-10 and ASC 310-20 (generally Agency RMBS), prepayments of the underlying collateral must be estimated, which directly affect the speed at which the Company amortizes such securities. If actual and anticipated cash flows differ from previous estimates; the Company recognizes a “catch-up” adjustment in the current period to the amortization of premiums for the impact of the cumulative change in the effective yield through the reporting date. Similarly, the Company also reassesses the cash flows on at least a quarterly basis for securities accounted for under ASC 325-40 and ASC 310-30 (generally Non-Agency RMBS and Multi-Family MBS). In estimating these cash flows, there are a number of assumptions that are subject to uncertainties and contingencies. These include the rate and timing of principal and interest receipts (including assumptions of prepayments, repurchases, defaults and liquidations), the pass-through or coupon rate and interest rate fluctuations. In addition, interest payment shortfalls due to delinquencies on the underlying mortgage loans have to be judgmentally estimated. Differences between previously estimated cash flows and current actual and anticipated cash flows are recognized prospectively through an adjustment of the yield over the remaining life of the security based on the current amortized cost of the investment as adjusted for credit impairment, if any. For investments purchased with evidence of deterioration of credit quality for which it is probable, at acquisition, that the Company will be unable to collect all contractually required payments receivable, the Company applies the provisions of ASC 310-30, “Loans and Debt Securities Acquired with Deteriorated Credit Quality.” ASC 310-30 addresses accounting for differences between contractual cash flows and cash flows expected to be collected from an investor’s initial investment in loans or debt securities acquired in a transfer if those differences are attributable, at least in part, to credit quality. ASC 310-30 limits the yield that may be accreted (accretable yield) to the excess of the investor’s estimate of undiscounted expected principal, interest and other cash flows (cash flows expected at acquisition to be collected) over the investor’s initial investment in the loan. ASC 310-30 requires that the excess of contractual cash flows over cash flows expected to be collected (nonaccretable difference) not be recognized as an adjustment of yield, loss accrual or valuation allowance. Subsequent increases in cash flows expected to be collected are generally recognized prospectively through adjustment of the investment’s yield over its remaining life. Decreases in cash flows expected to be collected are recognized as impairment to the extent that such decreases are due, at least in part, to an increase in credit loss expectations (“credit impairment”). To the extent that decreases in cash flows expected to be collected are the result of factors other than credit impairment, for example a change in rate of prepayments, such changes are generally recognized prospectively through adjustment of the investment’s yield over its remaining life. The Company’s accrual of interest, discount and premium for U.S. federal and other tax purposes is likely to differ from the financial accounting treatment of these items as described above. Gains and losses from the sale of AFS securities are recorded as realized gains (losses) within realized gain (loss) on sale of investments, net in the Company's consolidated statements of operations. Upon the sale of a security, the Company will determine the cost of the security and the amount of unrealized gains or losses to reclassify out of accumulated other comprehensive income (loss) into earnings based on the specific identification method. Unrealized gains and losses on the Company’s AFS securities are recorded as unrealized gain (loss) on available-for-sale securities, net in the Company's consolidated statements of comprehensive income (loss). |
Property, Plant and Equipment, Impairment [Policy Text Block] | Impairment The Company evaluates its MBS, on a quarterly basis, to assess whether a decline in the fair value of an AFS security below the Company's amortized cost basis is an other-than-temporary impairment (“OTTI”). The presence of OTTI is based upon a fair value decline below a security's amortized cost basis and a corresponding adverse change in expected cash flows due to credit related factors as well as non-credit factors, such as changes in interest rates and market spreads. Impairment is considered other-than-temporary if an entity (i) intends to sell the security, (ii) will more likely than not be required to sell the security before it recovers in value or (iii) does not expect to recover the security's amortized cost basis, even if the entity does not intend to sell the security. Under these scenarios, the impairment is other-than-temporary and the full amount of impairment should be recognized currently in earnings and the cost basis of the investment security is adjusted. However, if an entity does not intend to sell the impaired debt security and it is more likely than not that it will not be required to sell before recovery, an OTTI should be recognized to the extent that a decrease in future cash flows expected to be collected is due, at least in part, to an increase in credit impairment. A decrease in future cash flows due to factors other than credit, for example a change in the rate of prepayments, is considered a non-credit impairment. The full amount of the difference between the security’s previous and new cost basis resulting from credit impairment is recognized currently in earnings, and the difference between the new amortized cost basis and the cash flows expected to be collected is accreted as interest income in accordance with the effective interest method. Decreases in cash flows expected to be collected resulting from non-credit impairment are generally recognized prospectively through adjustment of the investment’s yield over its remaining life. |
Mortgage Loans Held-for-Sale, at Fair Value, Policy [Policy Text Block] | Mortgage Loans Held-for-Sale, at Fair Value Mortgage loans held-for-sale are reported at fair value as a result of a fair value option election. See Note 3 - Fair Value Measurements for details on fair value measurement. Mortgage loans are currently classified as held-for-sale based upon the Company’s intent to sell them either in the secondary whole loan market or to include them in a securitization, including transfers to a securitization entity that the Company sponsors and expects them to be accounted for as sales for financial reporting purposes. Interest income on mortgage loans held-for-sale is recognized at the loan coupon rate. Interest income recognition is suspended when mortgage loans are placed on non-accrual status. The accrual of interest on loans is discontinued when, in management’s opinion, the interest is considered non-collectible, and in all cases when payment becomes greater than 90 days past due. Loans return to accrual status when principal and interest become current and are anticipated to be fully collectible. |
Multi Family Mortgage Loans Held in Securitization Trusts [Policy Text Block] | Multi-Family and Residential Mortgage Loans Held in Securitization Trusts Multi-family and residential mortgage loans held in consolidated securitization trusts are comprised of multi-family mortgage loans held in the FREMF 2011-K13 Trust and the FREMF 2012-KF01 Trust, and residential mortgage loans held in the CSMC 2014-OAK1 Trust, as of December 31, 2016. Based on a number of factors, the Company determined that it was the primary beneficiary of the VIEs underlying the trusts, met the criteria for consolidation and, accordingly, has consolidated the three trusts, including their assets, liabilities, income and expenses in its financial statements. The Company has elected the fair value option on each of the assets and liabilities held within the trusts. See Note 3 - Fair Value Measurement below for additional detail. As the result of the Company’s determination that it is not the primary beneficiary of JPMMT 2014-OAK4 Trust, Oaks Mortgage Trust Series 2015-1 and Oaks Mortgage Trust Series 2015-2, it does not consolidate these trusts. Interest income on multi-family and residential mortgage loans held in securitization trusts is recognized at the loan coupon rate. Interest income recognition is suspended when mortgage loans are placed on non-accrual status. The accrual of interest on loans is discontinued when, in management’s opinion, the interest is considered non-collectible, and in all cases when payment becomes greater than 90 days past due. Loans return to accrual status when principal and interest become current and are anticipated to be fully collectible |
Mortgage Servicing Rights and Excess Servicing Rights, at Fair Value [Policy Text Block] | Mortgage Servicing Rights and Excess Servicing Rights, at Fair Value Mortgage servicing rights (“MSRs”) are associated with residential mortgage loans that the Company has historically purchased and subsequently sold or securitized. MSRs are held and managed at the Company’s TRS. As the owner of MSRs, the Company is entitled to receive a portion of the interest payments from the associated residential mortgage loan, and is obligated to service directly or through a subservicer, the associated loan. MSRs are reported at fair value as a result of a fair value option election. See Note 3 - Fair Value Measurement below for additional detail. Residential mortgage loans for which the Company owns the MSRs are directly serviced by one or more sub-servicers retained by the Company, since the Company does not directly service any residential mortgage loans. MSR income is recognized at the contractually agreed rate, net of the costs of sub-servicers retained by the Company. If a sub-servicer with which the Company contracts were to default, an evaluation of MSR assets for impairment would be undertaken at that time. To the extent that the Company determines it is the primary beneficiary of a residential mortgage loan securitization trust into which it has sold loans, any associated MSRs are eliminated on the consolidation of the trust. The trust is contractually obligated to pay a portion of the interest payments from the associated residential mortgage loans for the direct servicing of the loans, and after deduction of sub-servicing fees payable to contracted sub-servicers, the net amount, excess servicing rights, represents a liability of the trust. See Note 3 - Fair Value Measurement below for additional detail. |
Non-Agency Residential Mortgage Loan Securitizations Fair Value [Policy Text Block] | Non-Agency RMBS IOs, at Fair Value Non-Agency RMBS IOs that the Company owns are associated with residential mortgage loan securitizations that the Company sponsors, and are reported at fair value as a result of a fair value option election. See Note 3 - Fair Value Measurements for details on fair value measurement. Interest income on IOs is recognized at the contractually agreed rate, and changes in fair value are recognized in the Company’s consolidated statement of operations. |
Repurchase and Resale Agreements Policy [Policy Text Block] | Repurchase Agreements The Company finances the acquisition of certain of its mortgage-backed securities through the use of repurchase agreements. The repurchase agreements are generally short-term debt, which expire within one year. Borrowings under repurchase agreements generally bear interest rates at a specified margin over LIBOR and are generally uncommitted. In accordance with ASC 860 “Transfers and Servicing” the Company accounts for the repurchase agreements, other than those that were treated as Linked Transactions (see Note 3 - Accounting for Derivative Financial Instruments - Non-Hedging Activity/Linked Transactions below), as collateralized financing transactions and they are carried at their contractual amounts, as specified in the respective agreements. The contractual amounts approximate fair value due to their short-term nature. |
Residential Loan Warehouse Facilities, Policy [Policy Text Block] | Residential Loan Warehouse Facilities The Company previously financed the acquisition of certain of its residential mortgage loans through the use of short-term, uncommitted residential loan warehouse facilities, which were structured as repurchase agreements. The Company accounted for outstandings under these facilities as collateralized financing transactions which were carried at their contractual amounts, and approximated fair value due to their short-term nature. |
Debt, Policy [Policy Text Block] | Secured Loans In February 2015, the Company’s wholly owned subsidiary, FOI, became a member of the Federal Home Loan Bank of Indianapolis (“FHLBI”). As a member of FHLBI, FOI borrowed funds from FHLBI in the form of secured advances (“FHLB advances”). FHLB advances are treated as secured financing transactions and are carried at their contractual amounts. In connection with FHLB advances, FOI was required to purchase FHLBI stock, which is recorded on the Company’s consolidated balance sheet as an asset. See Note 10 for a further discussion of the Company’s FHLB advances and Note 3 for a description of the Company’s FHLB stock balance. |
Multi Family and Residential Securitized Debt Obligations [Policy Text Block] | Multi-Family and Residential Securitized Debt Obligations Multi-family and residential securitized debt obligations represent third-party liabilities of the FREMF 2011-K13 Trust, FREMF 2012-KF01 Trust and CSMC 2014-OAK1 Trust, and excludes liabilities of the trust acquired by the Company that are eliminated on consolidation. The third-party obligations of each trust do not have any recourse to the Company as the consolidator of each trust. |
Backstop Guarantees [Policy Text Block] | Backstop Guarantees The Company, through FOAC and in return for fees, provides seller eligibility and backup guarantee services in respect of residential mortgage loans that are traded through one or more loan exchanges operated by MAXEX LLC (“MAXEX”). See Note 14 and Note 15 for additional information regarding MAXEX. To the extent that a loan seller approved by FOAC fails to honor its obligations to repurchase one or more loans based on an arbitration finding that such seller has breached its representations and warranties, FOAC provides a backstop guarantee of the repurchase obligation. The Company has evaluated its backstop guarantees pursuant to ASC 460, Guarantees, and has determined them to be performance guarantees, for which ASC 460 contains initial recognition and measurement requirements, and related disclosure requirements. FOAC is obligated in two respects: (i) a noncontingent liability, which represents FOAC’s obligation to stand ready to perform under the terms of the guarantee in the event that the specified triggering event(s) occur; and (ii) the contingent liability, which represents FOAC’s obligation to make future payments if those triggering events occur. FOAC recognizes the noncontingent liability at the inception of the guarantee at the fair value, which is the fee received or receivable, and is recorded on the Company’s consolidated balance sheet as a liability in the line item “Deferred income.” The Company amortizes these fees into income on a straight-line basis over five years, based on an assumed constant prepayment rate of 15% for residential mortgage loans and other observable data. The Company’s contingent liability is accounted for pursuant to ASC 450, Contingencies, pursuant to which the contingent liability must be recognized when its payment becomes probable and reasonably estimable. |
Common Stock [Policy Text Block] | Common Stock At December 31, 2016, and December 31, 2015, the Company was authorized to issue up to 450,000,000 shares of common stock, par value $0.01 per share, with such designations, voting and other rights and preferences as may be determined from time to time by the Company’s Board of Directors. The Company had 17,539,258 shares of common stock issued and outstanding at December 31, 2016 and 14,656,394 at December 31, 2015. |
Stock Repurchase Program [Policy Text Block] | Stock Repurchase Program On December 15, 2015, the Company’s Board of Directors authorized a stock repurchase program (“Repurchase Program”), to repurchase up to $10 million of the Company’s outstanding common stock. Subject to applicable securities laws, repurchase of common stock under the Repurchase Program may be made at times and in amounts as the Company deems appropriate, using available cash resources. Shares of common stock repurchased by the Company under the Repurchase Program, if any, will be canceled and, until reissued by the Company, will be deemed to be authorized but unissued shares of common stock. The Repurchase Program may be suspended or discontinued by the Company at any time and without prior notice. |
Preferred Stock [Policy Text Block] | Preferred Stock At December 31, 2016, and December 31, 2015, the Company was authorized to issue up to 50,000,000 share of preferred stock, par value $0.01 per share, with such designations, voting and other rights and preferences as may be determined from time to time by the Company’s Board. The Company had 1,610,000 shares of preferred stock issued and outstanding at both December 31, 2016 and December 31, 2015. |
Income Tax, Policy [Policy Text Block] | Income Taxes The Company has elected to be taxed as a REIT under the Code for U.S. federal income tax purposes, commencing with the Company’s short taxable period ended December 31, 2012. So long as the Company qualifies as a REIT, the Company generally will not be subject to U.S. federal income taxes on its taxable income to the extent it annually distributes at least 90% of its net taxable income to stockholders and maintains its qualification as a REIT. In addition to the Company’s election to be taxed as a REIT, the Company complies with Sections 856 through 859 of the Code. Accordingly, the Company generally will not be subject to U.S. federal income tax to the extent of its distributions to stockholders and as long as certain asset, income and share ownership tests are met. To maintain its qualification as a REIT, the Company must distribute at least 90% of its REIT taxable income to its stockholders and meet certain other requirements. The Company may also be subject to certain state, local and franchise taxes. Under certain circumstances, federal income and excise taxes may be due on its undistributed taxable income. If the Company were to fail to meet these requirements, it would be subject to U.S. federal income tax, which could have a material adverse impact on its results of operations and amounts available for distributions to its stockholders. The Company believes it will meet all of the criteria to maintain the Company's REIT qualification for the applicable periods, but there can be no assurance that these criteria will continue to be met in subsequent periods. The Company assesses its tax positions for all open tax years and determines whether the Company has any material unrecognized liabilities in accordance with ASC 740, Income Taxes. The Company records these liabilities to the extent the Company deems them more likely than not to be incurred. The Company's accounting policy with respect to interest and penalties is to classify these amounts as other interest expense. As further described in Note 16, the Company declared and paid in the fourth quarter a deficiency dividend relating to a determination of an inability to offset certain net gains on hedging transactions in 2013 against net capital losses on the sale of certain mortgage-backed securities. In connection with this declaration, the Company provisioned an amount of $1.86 million for interest charges expected to be paid to the IRS following the payment of the dividend. This amount is included in the Company’s consolidated balance sheets in the line item “Other accounts payable and accrued expenses”, and is included in “Other interest expense” in the Company’s consolidated statement of operations. Certain activities of the Company are conducted through a TRS and therefore are taxed as a standalone U.S. C-Corporation. Accordingly, deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. If a TRS generates net income, the TRS can declare dividends to the Company which will be included in its taxable income and necessitate a distribution to its stockholders. Conversely, if the Company retains earnings at a TRS level, no distribution is required and the Company can increase book equity of the consolidated entity. |
Earnings Per Share, Policy [Policy Text Block] | Earnings per Share The Company calculates basic and diluted earnings per share by dividing net income attributable to common stockholders for the period by the weighted-average shares of the Company’s common stock outstanding for that period. Diluted earnings per share takes into account the effect of dilutive instruments, such as warrants, stock options, and unvested restricted stock, but use the average share price for the period in determining the number of incremental shares that are to be added to the weighted-average number of shares outstanding. See Note 16 for details of the computation of basic and diluted earnings per share. |
Share-based Compensation, Option and Incentive Plans Policy [Policy Text Block] | Stock-Based Compensation The Company is required to recognize compensation costs relating to stock-based payment transactions in the financial statements. The Company accounts for share-based compensation issued to its Manager and non-management directors using the fair value based methodology prescribed by ASC 505, Equity (“ASC 505”), or ASC 718, Share-Based Payment (“ASC 718”), as appropriate. Compensation cost related to restricted common stock issued to the Manager is initially measured at estimated fair value at the grant date, and is remeasured on subsequent dates to the extent the awards are unvested. Additionally, compensation cost related to restricted common stock issued to the non-management directors is measured at its estimated fair value at the grant date and amortized and expensed over the vesting period. See Note 14 for details of stock-based awards issuable under the Manager Equity Plan. |
Comprehensive Income, Policy [Policy Text Block] | Comprehensive Income (Loss) Attributable to Common Stockholders Comprehensive income (loss) is comprised of net income, as presented in the consolidated statement of comprehensive income (loss), adjusted for changes in unrealized gain or loss on AFS securities (excluding Non-Agency RMBS IOs), reclassification adjustments for net gain (loss) and other-than-temporary impairments included in net income, reclassification adjustment for Linked Transactions, and dividends paid to preferred stockholders. |
New Accounting Pronouncements, Policy [Policy Text Block] | Recently Issued and/or Adopted Accounting Standards Revenue from Contracts with Customers In May 2014, the Financial Accounting Standards Board, or FASB, issued ASU 2014-09, which is a comprehensive revenue recognition standard that supersedes virtually all existing revenue guidance under GAAP. The standard’s core principle is that an entity will recognize revenue when it transfers promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods and services. As a result of the issuance of ASU 2015-14 in August 2015, deferring the effective date of ASU 2014-09 by one year, the ASU is effective for annual periods, and interim periods within those annual periods, beginning on or after December 15, 2017, with early adoption prohibited. Revenue recognition with respect to financial instruments is not within the scope of ASU 2014-09 and is not therefore expected to have a significant impact on the Company’s consolidated financial statements. In May 2016, the FASB issued ASU 2016-11, “Revenue Recognition (TOPIC 605) and Derivatives and Hedging (Topic 815): Rescission of SEC Guidance Because of Accounting Standards Updates 2014-09 and 2014-16 Pursuant to Staff Announcements at the March 3, 2016 EITF Meeting.” The amendments make targeted improvements to clarify the principal versus agent assessment and are intended to make the guidance more operable and lead to more consistent application. The amendments in this update are effective immediately. Repurchase-to-Maturity Transactions, Repurchase Financings, and Disclosures In June 2014, the FASB issued ASU No. 2014-11, which required repurchase-to-maturity transactions to be accounted for as secured borrowings, eliminated the existing guidance for repurchase financings, and required new disclosures for certain transactions accounted for as secured borrowings and sales. This ASU was effective for the first interim or annual period beginning after December 15, 2014, except for the disclosures related to transactions accounted for as secured borrowings, which was effective for periods beginning on or after March 15, 2015. Adoption of this ASU did not have any impact on the Company’s financial condition or stockholders’ equity. Measuring the Financial Assets and the Financial Liabilities of a Consolidated Collateralized Financing Entity In August 2014, the FASB issued ASU No. 2014-13, which updates the guidance on measuring the financial assets and financial liabilities of consolidated collateralized financing entities, or CFEs. The update allows an entity to measure both the financial assets and financial liabilities of a qualifying CFE it consolidates using the fair value of either the CFE’s financial assets or financial liabilities, whichever is more observable. The ASU required certain recurring disclosures and was effective for annual periods beginning on or after December 15, 2015, with early adoption permitted as of the beginning of an annual period. Early adoption of this ASU was applied, which did not have a material impact on the Company’s financial condition or results of operations, but did impact financial statement disclosures as further described in Note 3. Amendments to the Consolidation Analysis In February 2015, the FASB issued ASU No. 2015-02, which changed the guidance on the consolidation of certain investment funds as well as both the variable interest model and the voting model. The ASU requires certain recurring disclosures and is effective for annual periods, and interim periods within those annual periods, beginning on or after December 15, 2015, with early adoption permitted. The adoption of this guidance did not have a material impact on the Company’s financial condition or results of operations. Simplifying the Presentation of Debt Issuance Costs In April 2015, the FASB issued ASU No. 2015-03, which simplifies the presentation of debt issuance costs by requiring debt issuance costs to be presented as a deduction from the corresponding debt liability. The ASU was effective for annual periods, and interim periods within those annual periods, beginning on or after December 15, 2015, with early adoption permitted. Early adoption of this ASU did not have a material impact on the Company's financial condition or results of operations. Balance Sheet Classification of Deferred Taxes In November 2015, the FASB issued ASU 2015-17, which requires deferred tax liabilities and assets to be classified as non-current in a classified statement of financial condition. The Company early adopted ASU 2015-17 as of December 31, 2015, on a retrospective basis, based on the ASU’s intention to simplify the financial presentation of deferred taxes. The adoption of this guidance did not have a material impact on the Company’s financial condition or results of operations. Recognition and Measurement of Financial Assets and Financial Liabilities In January 2016, the FASB issued ASU No. 2016-01, which changes how entities measure certain equity investments and present changes in the fair value of financial liabilities measured under the fair value option that are attributable to their own credit. The ASU requires certain recurring disclosures and is effective for annual periods, and interim periods within those annual periods, beginning on or after December 15, 2017, with early adoption permitted. The Company has determined this ASU will not have a material impact on the Company's financial condition or results of operation. Stock Compensation In March 2016, the FASB issued ASU 2016-09, effective January 1, 2017, which simplifies several aspects of the accounting for employee share-based payment transactions for both public and nonpublic entities. The areas for simplifications in the update involve several aspects of the accounting for share-based payment transactions, including income tax consequences, classifications of awards as either equity or liabilities, and classification on the statement of cash flows. The Company has determined this ASU will not have a material impact on the Company's financial condition or results of operation. Credit Losses In June 2016, the FASB issued ASU 2016-13 which is a comprehensive amendment of credit losses on financial instruments. Currently GAAP requires an “incurred loss” methodology for recognizing credit losses that delays recognition until it is probable a loss has been incurred. The standard’s core principle is that an entity replaces the “incurred loss” impairment methodology in current GAAP with a methodology that reflects expected credit losses and requires consideration of a broader range of reasonable and supportable information to inform credit loss estimates. For public business entities that are SEC filers, the amendment in this update are effective for fiscal years beginning after December 15, 2019, including interim periods within those fiscal years. The Company is currently assessing the impact of this guidance. Classification of Certain Cash Receipts and Cash Payments In August 2016, the FASB issued ASU 2016-15, which amends ASC Topic 230, Statement of Cash Flows (“ASC 230”), to reduce diversity in how certain transactions are classified in the statement of cash flows. The ASU is effective for public business entities for fiscal years beginning after December 15, 2017, and interim periods within those fiscal years. The Company is currently assessing the impact of this guidance. Interests Held Through Related Parties That Are under Common Control In October 2016, the FASB issued ASU 2016-17, to amend the consolidation guidance on how a reporting entity that is the single decision maker of a VIE should treat indirect interests in the entity held through related parties that are under common control with the reporting entity when determining whether it is the primary beneficiary of that VIE. The ASU is effective for public business entities for fiscal years beginning after December 15, 2016, including interim periods within those fiscal years. The Company has determined this ASU will not have a material impact on the Company’s financial condition or results of operations. Restricted Cash In November 2016, the FASB issued ASU 2016-18, which amends ASC Topic 230, Statement of Cash Flows, to reduce diversity in how entities present restricted cash and restricted cash equivalents in the statement of cash flows. The amendments in ASU 2016-18 require restricted cash and restricted cash equivalents to be included with cash and cash equivalents when reconciling the beginning-of-period and end-of-period total amounts shown on the statement of cash flows. The ASU is effective for public business entities for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2017. Early application is permitted, provided that all of the amendments are adopted in the same period. The amendments of this ASU should generally be applied using a retrospective transition method to each period presented. The Company currently presents net changes in restricted cash as a component of investing activities; therefore, the application of this ASU will represent a change in the Company’s consolidated cash flow presentation. |
AVAILABLE-FOR-SALE SECURITIES_2
AVAILABLE-FOR-SALE SECURITIES (as restated) (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Investments, Debt and Equity Securities [Abstract] | |
Available-for-sale Securities [Table Text Block] | The following table presents the Company’s AFS investment securities by collateral type at fair value as of December 31, 2016 and December 31, 2015: December 31, 2016 December 31, 2015 Mortgage-backed securities: Agency Federal Home Loan Mortgage Corporation $ 326,958,046 $ 148,760,159 Federal National Mortgage Association 463,232,187 182,867,134 Government National Mortgage Association - 43,705,764 Non-Agency 7,592,802 92,107,727 Multi-Family 73,146,566 104,025,797 Total mortgage-backed securities $ 870,929,601 $ 571,466,581 |
Schedule of Available-for-sale Securities Reconciliation [Table Text Block] | The following tables present the amortized cost and fair value of the Company’s AFS investment securities by collateral type as of December 31, 2016 and December 31, 2015: December 31, 2016 Agency Non-Agency (1) Multi-Family Total Face Value $ 779,219,115 $ 4,393,771 $ 100,907,815 $ 884,520,701 Unamortized premium 17,748,138 - - 17,748,138 Unamortized discount Designated credit reserve and OTTI (2) - (1,929,833 ) - (1,929,833 ) Net, unamortized (1,311,292 ) (369,887 ) (26,160,083 ) (27,841,262 ) Amortized Cost 795,655,961 2,094,051 74,747,732 872,497,744 Gross unrealized gain 2,663,975 234,647 509,519 3,408,141 Gross unrealized (loss) (8,129,703 ) - (2,110,685 ) (10,240,388 ) Fair Value $ 790,190,233 $ 2,328,698 $ 73,146,566 $ 865,665,497 December 31, 2015 Agency Non-Agency (1) Multi - Family Total Face Value $ 370,394,525 $ 116,954,842 $ 138,829,925 $ 626,179,292 Unamortized premium 5,745,862 80,257 - 5,826,119 Unamortized discount Designated credit reserve and OTTI (2) - (8,891,565 ) - (8,891,565 ) Net, unamortized (1,929,145 ) (22,101,062 ) (33,250,068 ) (57,280,275 ) Amortized Cost 374,211,242 86,042,472 105,579,857 565,833,571 Gross unrealized gain 3,234,673 1,099,957 913,556 5,248,186 Gross unrealized (loss) (2,112,858 ) (1,808,973 ) (2,467,616 ) (6,389,447 ) Fair Value $ 375,333,057 $ 85,333,456 $ 104,025,797 $ 564,692,310 (1) Non-Agency AFS does not include interest-only securities with a notional amount of $509,109,248, book value of $14,712,374 unrealized loss of $9,448,271 and a fair value of $5,264,104 at December 31, 2016 and a notional amount of $428,230,275, book value of $7,815,919 unrealized loss of $1,041,649 and a fair value of $6,774,271 at December 31, 2015 (2) Discount designated as Credit Reserve and amount related to OTTI are generally not expected to be accreted into interest income. Amounts disclosed reflect Credit Reserve of $1,929,833 and $8,146,073 at December 31, 2016 and December 31, 2015, respectively, and OTTI of ($745,492) and $745,492 at December 31, 2016 and December 31, 2015, respectively. At December 31, 2016, the Company did not intend to sell any of its MBS that were in an unrealized loss position, and it is “more likely than not” that the Company will not be required to sell these MBS before recovery of their amortized cost basis, which may be at their maturity. |
Other than Temporary Impairment, Credit Losses Recognized in Earnings [Table Text Block] | The following table present the composition of OTTI charges recorded by the Company for the years ended December 31, 2016, 2015, and 2014: Year Ended December 31, 2016 2015 2014 Cumulative credit loss at beginning of period $ (3,636,431 ) $ - - Additions: Initial (increase) in credit reserves (541,342 ) (745,492 ) - Subsequent (increase) in credit reserves - - Initial additional other-than-temporary credit impairment losses (183,790 ) (2,890,939 ) - Subsequent additional other-than-temporary credit impairment losses - - Reductions: For securities sold decrease in credit reserves 1,286,835 - - For securities sold decrease in other-than-temporary impairment - - - Cumulative credit (loss) at end of period $ (3,074,728 ) $ (3,636,431 ) - |
Available-for-sale Securities, Continuous Unrealized Loss Position, Fair Value [Table Text Block] | At December 31, 2015, the Company held 67 AFS securities, of which 35 were in an unrealized loss position for less than twelve consecutive months and five were in an unrealized loss position for more than twelve months. Less than 12 months Greater than 12 months Total Estimated Fair Value Gross Unrealized Losses Estimated Fair Value Gross Unrealized Losses Estimated Fair Value Gross Unrealized Losses December 31, 2016 $ 619,414,077 $ (8,129,704 ) $ 45,879,433 $ (2,110,684 ) $ 665,293,510 $ (10,240,388 ) December 31, 2015 $ 348,120,251 $ (5,983,726 ) $ 6,939,257 $ (405,720 ) $ 355,059,508 $ (6,389,446 ) |
Summary of Net Realized Gain (Loss) From the Sale of AFS Securities [Table Text Block] | The following table presents a summary of the Company’s net realized gain (loss) from the sale of AFS securities, inclusive of securities previously booked as linked, for the years ended December 2016, December 2015, and December 2014. December 31, 2016 December 31, 2015 December 31, 2014 AFS securities sold, at cost $ 268,849,640 $ 267,741,325 $ 462,470,753 Proceeds from AFS securities sold 263,143,871 267,567,905 466,239,975 Net realized gain (loss) on sale of AFS securities $ (5,705,769 ) $ (173,420 ) $ 3,769,222 |
Schedule Of Available For Sale Securities By Rate Type [Table Text Block] | The following tables present the fair value of AFS investment securities by rate type as of December 31, 2016 and December 31, 2015: December 31, 2016 Agency Non-Agency Multi-Family Total Adjustable rate $ 788,727,476 $ 7,592,802 $ - $ 796,320,278 Fixed rate 1,462,757 - 73,146,566 74,609,323 Total $ 790,190,233 $ 7,592,802 $ 73,146,566 $ 870,929,601 December 31, 2015 Agency Non-Agency Multi- Family Total Adjustable rate $ 360,057,377 $ 92,107,727 $ - $ 452,165,104 Fixed rate 15,275,680 - 104,025,797 119,301,477 Total $ 375,333,057 $ 92,107,727 $ 104,025,797 $ 571,466,581 |
Investments Classified by Contractual Maturity Date [Table Text Block] | The following tables present the fair value of AFS investment securities by maturity date as December 31, 2016 and December 31, 2015: December 31, 2016 December 31, 2015 Less than one year $ - $ - Greater than one year and less than five years 399,872,894 211,800,340 Greater than or equal to five years 471,056,707 359,666,241 Total $ 870,929,601 $ 571,466,581 |
Schedule Of Investments In Debt and Marketable Equity Securities and Certain Trading Assets Disclosure [Table Text Block] | The following tables present the changes for the year ended December 31, 2016 and the year ended December 31, 2015 of the unamortized net discount and designated credit reserves on the Company’s MBS. December 31, 2016 Designated Unamortized credit reserve net discount Total Beginning Balance as of January 1, 2016 $ (8,891,565 ) $ (57,280,275 ) $ (66,171,840 ) Acquisitions - - - Dispositions 4,893,913 21,637,637 26,531,550 Accretion of net discount - 6,703,365 6,703,365 Realized gain on paydowns - 325,709 325,709 Realized credit losses 3,023,911 (183,790 ) 2,840,121 Addition to credit reserves (1,021,433 ) 1,021,433 - Release of credit reserves 65,341 (65,341 ) - Ending balance at December 31, 2016 $ (1,929,833 ) $ (27,841,262 ) $ (29,771,095 ) December 31, 2015 Designated Unamortized credit reserve net discount Total Beginning Balance as of January 1, 2015 $ (12,697,796 ) $ (17,454,022 ) $ (30,151,818 ) Cumulative - effect adjustment for Linked Transactions (36,627,321 ) (47,091,958 ) (83,719,279 ) Adjusted beginning Balance as of January 1, 2015 (49,325,117 ) (64,545,980 ) (113,871,097 ) Acquisitions - (24,446,013 ) (24,446,013 ) Dispositions - 20,963,895 20,963,895 Accretion of net discount 30,201,676 13,061,839 43,263,515 Realized gain on paydowns - 226,553 226,553 Realized credit losses 10,582,246 (2,890,939 ) 7,691,307 Addition to credit reserves (2,669,938 ) 2,669,938 - Release of credit reserves 2,319,568 (2,319,568 ) - Ending balance at December 31, 2015 $ (8,891,565 ) $ (57,280,275 ) $ (66,171,840 ) |
Investment Income [Table Text Block] | The following tables present components of interest income on the Company’s AFS securities for the years December 31, 2016, December 31, 2015, December 31, 2014: Year Ended December 31, 2016 Net (premium Coupon amortization)/ Interest interest discount accretion income Agency $ 13,138,828 $ 341,020 $ 13,479,848 Non-Agency 2,579,344 1,343,594 3,922,938 Multi-Family 1,006,106 5,066,873 6,072,979 Total $ 16,724,278 $ 6,751,487 $ 23,475,765 Year Ended December 31, 2015 Net (premium Coupon amortization)/ Interest interest discount accretion income Agency $ 7,286,166 $ 241,550 $ 7,527,716 Non-Agency 2,357,814 7,653,839 10,011,653 Multi-Family 1,443,326 5,315,461 6,758,787 Total $ 11,087,306 $ 13,210,850 $ 24,298,156 Year Ended December 31, 2014 Net (premium Coupon amortization)/ Interest interest discount accretion income Agency $ 11,409,239 $ 603,547 $ 12,012,786 Non-Agency 261,050 4,077,481 4,338,531 Multi-Family 184,411 24,610 209,021 Total $ 11,854,700 $ 4,705,638 $ 16,560,338 |
MORTGAGE LOANS HELD-FOR-SALE,_2
MORTGAGE LOANS HELD-FOR-SALE, at FAIR VALUE (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Mortgage Loans Held For Sale At Fair Value [Line Items] | |
Schedules of Concentration of Risk, by Risk Factor [Table Text Block] | The geographic concentrations of credit risk exceeding 5% of the total loan balances related to the mortgage loans held-for-sale as of December 31, 2016 are as follows: December 31, 2016 December 31, 2015 Texas 56.0 % 20.7 % Arizona - 16.8 % Massachusetts - 12.8 % California 24.4 % 11.9 % Minnesota - 9.9 % New York - 6.6 % Pennsylvania - 5.9 % North Carolina 19.6 % 5.5 % Illinois - 5.1 % |
Mortgage Loans Held-for-sale [Member] | |
Mortgage Loans Held For Sale At Fair Value [Line Items] | |
Schedule of Mortgage loans held-for-sale [Table Text Block] | The following table presents the carrying value of the Company’s mortgage loans held-for-sale as of December 31, 2016 and December 31, 2015: December 31, 2016 December 31, 2015 Unpaid principal balance $ 2,867,263 $ 10,767,856 Fair value adjustment (17,727 ) 132,546 Carrying value $ 2,849,536 $ 10,900,402 |
THE FREMF TRUSTS (Tables)
THE FREMF TRUSTS (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Balance Sheet | |
Schedules of Concentration of Risk, by Risk Factor [Table Text Block] | The geographic concentrations of credit risk exceeding 5% of the total loan balances related to the mortgage loans held-for-sale as of December 31, 2016 are as follows: December 31, 2016 December 31, 2015 Texas 56.0 % 20.7 % Arizona - 16.8 % Massachusetts - 12.8 % California 24.4 % 11.9 % Minnesota - 9.9 % New York - 6.6 % Pennsylvania - 5.9 % North Carolina 19.6 % 5.5 % Illinois - 5.1 % |
FREMF trusts [Member] | |
Balance Sheet | |
Condensed Balance Sheet [Table Text Block] | The consolidated balance sheets of the FREMF trusts at December 31, 2016 and December 31, 2015 are set out below: Balance Sheets December 31, 2016 December 31, 2015 Assets Multi-family mortgage loans held in securitization trusts $ 1,222,905,433 $ 1,449,774,383 Receivables 4,617,642 5,380,956 Total assets $ 1,227,523,075 $ 1,455,155,339 Liabilities and Equity Multi-family securitized debt obligations $ 1,204,583,678 $ 1,364,077,012 Payables 4,597,357 5,047,777 $ 1,209,181,035 $ 1,369,124,789 Equity 18,342,040 86,030,550 Total liabilities and equity $ 1,227,523,075 $ 1,455,155,339 |
Condensed Income Statement [Table Text Block] | The consolidated statements of operations of the FREMF trusts for the years ended December 31, 2016 and December 31, 2015 and for the period from date of consolidation to December 31, 2014 are set out below: Statements of Operations December 31, 2016 December 31, 2015 For the period from date of consolidation to December 31, 2014* Interest income $ 58,587,780 $ 68,016,595 $ 21,158,102 Interest expense (54,940,386 ) (62,157,176 ) (19,400,851 ) Net interest income $ 3,647,394 $ 5,859,419 $ 1,757,251 General and administrative fees (2,711,189 ) (3,249,208 ) (1,086,165 ) Unrealized gain (loss) on multi-family loans held in securitization trusts (5,219,530 ) 6,097,000 1,473,484 Net income (loss) $ (4,283,325 ) $ 8,707,211 $ 2,144,570 * The Company consolidated the first trust in September, 2014 and the second trust in October, 2014. |
Schedules of Concentration of Risk, by Risk Factor [Table Text Block] | The geographic concentrations of credit risk exceeding 5% of the total loan balances related to the FREMF trusts as of December 31, 2016 are as follows: December 31, 2016 December 31, 2015 Texas 17.9 % Texas 19.3 % New York 15.7 % New York 13.2 % Washington 8.4 % California 12.2 % Colorado 7.5 % Washington 7.1 % Georgia 5.5 % Colorado 6.4 % |
RESIDENTIAL MORTGAGE LOAN SEC_2
RESIDENTIAL MORTGAGE LOAN SECURITIZATION TRUSTS (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Balance Sheet | |
Geographic Concentrations [Table Text Block] | The geographic concentrations of credit risk exceeding 5% of the total loan balances related to the mortgage loans held-for-sale as of December 31, 2016 are as follows: December 31, 2016 December 31, 2015 Texas 56.0 % 20.7 % Arizona - 16.8 % Massachusetts - 12.8 % California 24.4 % 11.9 % Minnesota - 9.9 % New York - 6.6 % Pennsylvania - 5.9 % North Carolina 19.6 % 5.5 % Illinois - 5.1 % |
Residential Mortgage [Member] | |
Balance Sheet | |
Condensed Balance Sheet [Table Text Block] | The consolidated balance sheets of the residential mortgage loan securitization trusts at December 31, 2016 and December 31, 2015 are set out below: Balance Sheets December 31, 2016 December 31, 2015 Assets Residential mortgage loans held in securitization trusts $ 141,126,720 $ 411,881,097 Receivables 471,146 1,446,120 Total assets $ 141,597,866 $ 413,327,217 Liabilities and Equity Residential securitized debt obligations $ 134,846,348 $ 380,638,423 Payables 376,697 1,153,053 $ 135,223,045 $ 381,791,476 Equity 6,374,821 31,535,741 Total liabilities and equity $ 141,597,866 $ 413,327,217 |
Condensed Income Statement [Table Text Block] | The consolidated statements of operations of the residential mortgage loan securitization trusts for the years ended December 31, 2016 and December 31, 2015 and for the period from date of consolidation to December 31, 2014 are set out below: Statements of Operations December 31, 2016 December 31, 2015 For the period from date of consolidation to December 31, 2014* Interest income $ 10,585,191 $ 19,986,204 $ 4,438,633 Interest expense (8,117,402 ) (13,156,912 ) (3,575,168 ) Net interest income $ 2,467,789 $ 6,829,292 $ 863,465 General and administrative fees (266,957 ) (635,547 ) (44,267 ) Unrealized gain (loss) on residential mortgage loans held in securitization trusts 404,720 (8,153,474 ) 3,059,647 Net income (loss) $ 2,605,552 $ (1,959,729 ) $ 3,878,845 |
Geographic Concentrations [Table Text Block] | The geographic concentrations of credit risk exceeding 5% of the total loan balances related to the residential mortgage loan securitization trusts as at December 31, 2016 are as follows: December 31, 2016 December 31, 2015 California 37.6 % 45.5 % Washington 15.4 % 13.3 % Massachusetts 8.4 % 6.4 % Florida 5.7 % - Tennessee 4.8 % - |
RESTRICTED CASH AND DUE TO BR_2
RESTRICTED CASH AND DUE TO BROKER (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Cash and Cash Equivalents [Abstract] | |
Schedule of Restricted Cash and Cash Equivalents [Table Text Block] | The following table presents the Company's restricted cash balances as of December 31, 2016 and December 31, 2015: December 31, 2016 December 31, 2015 Restricted cash balance held by: Broker counterparties for derivatives trading $ (4,244,678 ) $ 528,564 Repurchase counterparties as restricted collateral 10,355,222 7,646,074 Total $ 6,110,544 $ 8,174,638 |
BORROWINGS (Tables)
BORROWINGS (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Debt Disclosure [Abstract] | |
Schedule of Repurchase Agreements [Table Text Block] | The following table summarizes certain characteristics of the Company’s repurchase agreements at December 31, 2016 and December 31, 2015: December 31, 2016 December 31, 2015 Weighted Weighted Amount average Market value Amount average Market value outstanding interest rate of collateral held outstanding interest rate of collateral held Agency $ 755,221,000 0.97 % $ 790,190,232 $ 358,239,000 0.66 % $ 374,952,510 Non-Agency 7,313,000 2.39 % 12,784,707 114,512,000 2.24 % 121,475,112 Multi-Family 42,277,000 2.52 % 73,146,566 86,177,000 1.83 % 190,056,347 Mortgage loans - 0.00 % - 9,504,457 2.87 % 10,900,403 Total $ 804,811,000 1.07 % $ 876,121,505 $ 568,432,457 1.19 % $ 697,384,372 |
Schedule Of Remaining Maturities Under Repurchase Agreement [Table Text Block] | At December 31, 2016 and December 31, 2015, the repurchase agreements had the following remaining maturities: December 31, 2016 December 31, 2015 < 30 days $ 737,823,000 $ 449,063,000 31 to 60 days 19,897,000 76,044,000 61 to 90 days 47,091,000 37,873,540 > 90 days - 5,451,917 Total $ 804,811,000 $ 568,432,457 |
Schedule of Repurchase Agreement Counterparties with Whom Repurchase Agreements Exceed 10 Percent of Stockholders' Equity [Table Text Block] | The following tables summarize certain characteristics of the Company’s repurchase agreements at December 31, 2016 and December 31, 2015: December 31, 2016 Amount Percent of total Weighted average Market Value Repurchase Agreement Counterparties Outstanding amount outstanding days to maturity of collateral held Wells Fargo Securities $ 33,666,000 4.18 % 8 $ 57,627,433 Other North America 703,788,000 87.45 % 16 742,690,286 Asia (1) 62,733,000 7.79 % 14 66,198,478 Europe (1) 4,624,000 0.57 % 44 9,605,308 Total $ 804,811,000 100.00 % 16 $ 876,121,505 (1) Counterparties domiciled in Europe and Asia, or their U.S. subsidiaries. December 31, 2015 Amount Percent of total Weighted average Market Value Repurchase Agreement Counterparties Outstanding amount outstanding days to maturity of collateral held Merrill Lynch $ 99,770,000 17.55 % 30 $ 154,005,234 Wells Fargo Securities 32,192,000 5.66 % 10 53,711,547 Other North America 291,806,000 51.34 % 25 315,040,818 Asia (1) 88,565,000 15.58 % 16 97,970,226 Europe (1) 56,099,457 9.87 % 46 76,656,547 Total $ 568,432,457 100.00 % 26 $ 697,384,372 (1) Counterparties domiciled in Europe and Asia, or their U.S. subsidiaries. |
DERIVATIVE INSTRUMENTS HEDGIN_2
DERIVATIVE INSTRUMENTS HEDGING AND NON-HEDGING ACTIVITIES (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Derivative Instrument Detail [Abstract] | |
Schedule of Derivative Instruments in Statement of Financial Position, Fair Value [Table Text Block] | The following tables present the gross fair value and notional amounts of the Company’s derivative financial instruments as of December 31, 2016 and December 31, 2015. December 31, 2016 Derivative Assets Derivative Liabilities Contracts Fair value Notional Contracts Fair value Notional Eurodollar Futures 10,501 8,053,813 10,501,000,000 - - - Total 10,501 $ 8,053,813 10,501,000,000 - $ - - December 31, 2015 Derivative Assets Derivative Liabilities Contracts Fair value Notional Contracts Fair value Notional Deliverable Swap Futures 70 27,343 7,000,000 - - - Eurodollar Futures 5,908 2,425,538 5,908,000,000 - - - Treasury Note Futures 300 105,469 30,000,000 - - - Total 6,278 $ 2,558,350 5,945,000,000 - $ - - |
Schedule of Derivative Instruments [Table Text Block] | The below tables provide a reconciliation of these assets and liabilities that are subject to Master Agreements or similar agreements and can be potentially offset on the Company’s consolidated balance sheets as of December 31, 2016 and December 31, 2015: As of December 31, 2016 the Company did not have any assets subject to Master Agreements or similar agreements. December 31, 2016 Gross amounts not offset in the Balance Sheet (1) Net amounts Gross amounts Gross amounts of assets Cash collateral of recognized offset in the presented in the Financial (Received)/ Net Description assets Balance Sheet Balance Sheet instruments Pledged amount Futures $ 8,053,813 $ - $ 8,053,813 $ - $ - $ 8,053,813 Total $ 8,053,813 $ - $ 8,053,813 $ - $ - $ 8,053,813 December 31, 2015 Gross amounts not offset in the Balance Sheet (1) Net amounts Gross amounts Gross amounts of assets Cash collateral of recognized offset in the presented in the Financial (Received)/ Net Description assets Balance Sheet Balance Sheet instruments Pledged amount Futures $ 2,558,350 $ - $ 2,558,350 $ - $ - $ 2,558,350 Total $ 2,558,350 $ - $ 2,558,350 $ - $ - $ 2,558,350 December 31, 2016 Gross amounts not offset in the Balance Sheet (1) Net amounts Gross amounts Gross amounts of liabilities Cash collateral of recognized offset in the presented in the Financial (Received)/ Net Description liabilities Balance Sheet Balance Sheet instruments Pledged amount Repurchase agreements $ (804,811,000 ) $ - $ (804,811,000 ) $ - $ - $ (804,811,000 ) Total $ (804,811,000 ) $ - $ (804,811,000 ) $ - $ - $ (804,811,000 ) December 31, 2015 Gross amounts not offset in the Balance Sheet (1) Net amounts Gross amounts Gross amounts of liabilities Cash collateral of recognized offset in the presented in the Financial (Received)/ Net Description liabilities Balance Sheet Balance Sheet instruments Pledged amount Repurchase agreements $ (518,735,457 ) $ - $ (518,735,457 ) $ - $ - $ (518,735,457 ) FHLB advances (49,697,000 ) - (49,697,000 ) - - (49,697,000 ) Total $ (568,432,457 ) $ - $ (568,432,457 ) $ - $ - $ (568,432,457 ) (1) Amounts presented are limited in total to the net amount of assets or liabilities presented in the consolidated balance sheets by instrument. Excess cash collateral or financial assets that are pledged to counterparties may exceed the financial liabilities subject to Master Agreements or similar agreements, or counterparties may have pledged excess cash collateral to the Company that exceed the corresponding financial assets. These excess amounts are excluded from the tables above. |
Schedule Of Derivative Non-Agency Rmbs and Repurchase Financings Underlying [Table Text Block] | The following table presents certain information concerning the Non-Agency RMBS, Multi-Family MBS and repurchase financings underlying the Company’s Linked Transactions as of December 31, 2014: December 31, 2014 Non-Agency Multi-Family Total Face Value $ 186,532,050 $ 102,968,560 $ 289,500,610 Unamortized premium - - - Unamortized discount Designated credit reserve and OTTI (36,627,428 ) - (36,627,428 ) Net, unamortized (28,768,448 ) (18,323,619 ) (47,092,067 ) Amortized Cost 121,136,174 84,644,941 205,781,115 Gross unrealized gain 5,676,815 1,770,361 7,447,176 Gross unrealized (loss) (2,384,676 ) (604,957 ) (2,989,633 ) Fair Value $ 124,428,313 85,810,345 $ 210,238,658 |
Schedule Of Unamortized Net Discount And Designated Credit Reserves On Non Agency Rmbs Underlying Linked Transactions [Table Text Block] | The following table presents the change for the year ended December 31, 2014 of the unamortized net discount and designated credit reserves on Non-Agency RMBS and Multi-Family MBS underlying Linked Transactions: December 31, 2014 Designated Unamortized credit reserve net discount Total Beginning Balance as of January 1, 2014 $ (29,857,597 ) $ (30,770,386 ) $ (60,627,983 ) Acquisitions (19,384,939 ) (47,651,628 ) (67,036,567 ) Dispositions 9,468,964 15,465,093 24,934,057 Accretion of net discount - 12,122,919 12,122,919 Realized credit losses 3,146,144 - 3,146,144 Release of credit reserves - 3,741,935 3,741,935 Ending balance at December 31, 2014 $ (36,627,428 ) $ (47,092,067 ) $ (83,719,495 ) |
Schedule Of Linked Repurchase Agreement Counterparties With Whom Repurchase Agreements Exceed 10 Percent Of Stockholders Equity [Table Text Block] | Amount Percent of total Weighted average Market Value Repurchase Agreement Counterparties Outstanding amount outstanding days to maturity of collateral held North America $ 86,985,000 58.26 % 33 $ 124,620,917 Europe (1) 46,381,000 31.07 % 15 62,487,229 Asia (1) 15,927,000 10.67 % 9 23,130,512 Total $ 149,293,000 100.00 % 25 $ 210,238,658 (1) Counterparties domiciled in Europe and Asia, or their U.S. subsidiaries |
Schedule Of Unrealized Gain and Net Interest Income From Derivatives [Table Text Block] | The following table presents certain information about the components of the unrealized gain (loss) and net interest income from Linked Transactions included in the Company’s consolidated statement of operations for the year ended December 31, 2014: Year Ended December 31, 2014 Interest income attributable to AFS underlying Linked Transactions $ 15,427,632 Interest expense attributable to linked repurchase agreement borrowings underlying Linked Transactions (2,893,375 ) Change in fair value of Linked Transactions included in earnings (1,928,409 ) Unrealized gain (loss) and net interest income from Linked Transactions $ 10,605,848 |
Schedule of Price Risk Derivatives [Table Text Block] | The following table summarizes the underlying hedged risks and the amount of gains and losses on derivative instruments reported net in the consolidated statement of operations as realized gain (loss) on derivative contracts, net and unrealized gain (loss) on derivative contracts, net for the years ended December 31, 2016, December 31, 2015, and December 31, 2014: Year Ended December 31, 2016 Amount of realized Amount of unrealized Primary underlying risk gain (loss) appreciation (depreciation) Total Interest rate: Futures (3,089,001 ) 5,495,463 2,406,462 Total $ (3,089,001 ) $ 5,495,463 $ 2,406,462 Year Ended December 31, 2015 Amount of realized Amount of unrealized Primary underlying risk gain (loss) appreciation (depreciation) Total Interest rate: Interest rate swaps (1) $ (7,047,875 ) $ 1,755,108 $ (5,292,767 ) Swaptions (84,000 ) 62,450 (21,550 ) Futures (4,892,855 ) 3,092,300 (1,800,555 ) Total $ (12,024,730 ) $ 4,909,858 $ (7,114,872 ) Year Ended December 31, 2014 Amount of realized Amount of unrealized Primary underlying risk gain (loss) appreciation (depreciation) Total Interest rate: Interest rate swaps (1) $ (9,705,847 ) $ (761,429 ) $ (10,467,276 ) Swaptions (336,000 ) (1,413,244 ) (1,749,244 ) Futures (8,621,211 ) (688,217 ) (9,309,428 ) TBAs 448,598 (68,359 ) 380,239 Total $ (18,214,460 ) $ (2,931,249 ) $ (21,145,709 ) (1) In the year ended December 31, 2015,net swap interest expense totaled $2,216,417 comprised of $2,719,563 in interest expense paid (included in realized gain (loss)) and $503,146 in accrued interest income (included in unrealized gain (loss)). In the year ended December 31, 2014, net swap interest expense totaled $3,495,232 comprised of $3,329,219 in interest expense paid (included in realized gain (loss)) and $166,013 in accrued interest income (included in unrealized gain (loss)). |
MSRs (Tables)
MSRs (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Mortgage Servicing Rights MSR Disclosure [Abstract] | |
Schedule Of Mortgage Service Rights Activity [Table Text Block] | The following table presents the Company’s MSR activity as of December 31, 2016 and the year ended December 31, 2015: December 31, 2016 December 31, 2015 Balance at beginning of year $ 4,268,673 $ - MSRs retained from sales to securitizations - 4,940,630 MSRs related to deconsolidation of securitization trust 364,163 - Changes in fair value due to: Changes in valuation inputs or assumptions used in valuation model (102,855 ) (217,663 ) Other changes to fair value (1) (1,089,172 ) (454,294 ) Balance at end of period $ 3,440,809 $ 4,268,673 Loans associated with MSRs (2) $ 397,925,409 $ 472,886,810 MSR values as percent of loans (3) 0.86 % 0.90 % (1) Amounts represent changes due to realization of expected cash flows (2) Amounts represent the principal balance of loans associated with MSRs outstanding at December 31, 2016 and December 31, 2015, respectively (3) Amounts represent the carrying value of MSRs at December 31, 2016 and December 31, 2015, respectively divided by the outstanding balance of the loans associated with these MSRs |
Schedule Of Components Of Servicing Income [Table Text Block] | The following table presents the components of servicing income recorded on the Company’s statements of operations for the years ended December 31, 2016, December 31, 2015 and December 31, 2014: Year Ended Year Ended Year Ended December 31, 2016 December 31, 2015 December 31, 2014 Servicing income, net $ 932,425 $ 211,878 $ - Income from MSRs, net $ 932,425 $ 211,878 $ - |
FINANCIAL INSTRUMENTS (Tables)
FINANCIAL INSTRUMENTS (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements, Recurring and Nonrecurring [Table Text Block] | The following tables summarize the valuation of the Company’s assets and liabilities at fair value within the fair value hierarchy levels as of December 31, 2016 and December 31, 2015: December 31, 2016 Quoted prices in Significant active markets other observable Unobservable for identical assets inputs inputs Balance as of Level 1 Level 2 Level 3 December 31, 2016 Assets: Residential mortgage-backed securities (a) $ - $ 870,929,601 $ - $ 870,929,601 Residential mortgage loans - 2,849,536 - 2,849,536 Multi-Family mortgage loans held in securitization trusts - 1,222,905,433 - 1,222,905,433 Residential mortgage loans held in securitization trusts - 141,126,720 - 141,126,720 Mortgage servicing rights - - 3,440,809 3,440,809 Futures 8,053,813 - - 8,053,813 Total $ 8,053,813 $ 2,237,811,290 $ 3,440,809 $ 2,249,305,912 Liabilities: Multi-family securitized debt obligations $ - $ (1,204,583,678 ) $ - $ (1,204,583,678 ) Residential securitized debt obligations - (134,846,348 ) - (134,846,348 ) Total $ - $ (1,339,430,026 ) $ - $ (1,339,430,026 ) December 31, 2015 Quoted prices in Significant active markets other observable Unobservable for identical assets inputs inputs Balance as of Level 1 Level 2 Level 3 December 31, 2015 Assets: Residential mortgage-backed securities (a) $ - $ 571,466,581 $ - $ 571,466,581 Residential mortgage loans - 10,900,402 - 10,900,402 Multi-Family mortgage loans held in securitization trusts - 1,449,774,383 - 1,449,774,383 Residential mortgage loans held in securitization trusts - 411,881,097 - 411,881,097 Mortgage servicing rights - - 4,268,673 4,268,673 FHLB Stock 2,403,000 - - 2,403,000 Futures 2,558,350 - - 2,558,350 Total $ 4,961,350 $ 2,444,022,463 $ 4,268,673 $ 2,453,252,486 Liabilities: Multi-family securitized debt obligations $ - $ (1,364,077,012 ) $ - $ (1,364,077,012 ) Residential securitized debt obligations - (380,638,423 ) - (380,638,423 ) Total $ - $ (1,744,715,435 ) $ - $ (1,744,715,435 ) (a) For more detail about the fair value of the Company’s MBS, see Note 3 and Note 4. |
Fair Value Measurement Inputs and Valuation Techniques [Table Text Block] | The following table provides quantitative information about the significant unobservable inputs used in the fair value measurement of the Company’s MSRs classified as Level 3 fair value assets at December 31, 2016 and December 31, 2015: As of December 31, 2016 Valuation Technique Unobservable Input Range Weighted Average Discounted cash flow Constant prepayment rate 8.0 - 26.5 % 13.7 % Discount rate 12.0 % 12.0 % As of December 31, 2015 Valuation Technique Unobservable Input Range Weighted Average Discounted cash flow Constant prepayment rate 6.5 - 28.6 % 13.3 % Discount rate 12.0 % 12.0 % |
RELATED PARTY TRANSACTIONS (Tab
RELATED PARTY TRANSACTIONS (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Related Party Transactions [Abstract] | |
Schedule of Share-based Compensation, Restricted Stock and Restricted Stock Units Activity [Table Text Block] | The following table summarizes the activity related to restricted common stock for the years December 31, 2016 and 2015: Year Ended December 31, 2016 2015 Shares Weighted Average Grant Date Fair Market Value Shares Weighted Average Grant Date Fair Market Value Outstanding Unvested Shares at Beginning of Period 15,500 $ 12.79 23,500 $ 13.88 Granted 4,500 5.97 6,000 10.07 Vested (15,500 ) 12.79 (14,000 ) 13.46 Outstanding Unvested Shares at End of Period 4,500 $ 5.97 15,500 $ 12.79 |
STOCKHOLDERS' EQUITY (Tables)
STOCKHOLDERS' EQUITY (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Stockholders' Equity Note [Line Items] | |
Schedule of Dividends Payable [Table Text Block] | The following table presents a summary of the Company’s common stock repurchases under the Repurchase Program during the year ended December 31, 2016: Month Purchased Total Number of Shares Repurchased Weighted Average Price Paid per Share (1) Total Cost of Shares Repurchased January 2016 58,500.00 $ 4.87 $ 284,885 (1) Average price paid per share includes transaction costs |
Common Stock [Member] | |
Stockholders' Equity Note [Line Items] | |
Schedule of Dividends Payable [Table Text Block] | The following table presents cash dividends declared by the Company on its common stock for the year ended December 31, 2016: Declaration Date Record Date Payment Date Dividend Amount Cash Dividend Per Share December 16, 2015 January 15, 2016 January 28, 2016 $ 878,274 $ 0.05998 December 16, 2015 February 16, 2016 February 26, 2016 $ 875,874 $ 0.05982 December 16, 2015 March 15, 2016 March 30, 2016 $ 875,873 $ 0.05982 March 16, 2016 April 15, 2016 April 28, 2016 $ 875,874 $ 0.05982 March 16, 2016 May 16, 2016 May 27, 2016 $ 875,873 $ 0.05982 March 16, 2016 June 15, 2016 June 29, 2016 $ 875,874 $ 0.05982 June 15, 2016 July 15, 2016 July 28, 2016 $ 875,874 $ 0.05982 June 15, 2016 August 15, 2016 August 30, 2016 $ 876,144 $ 0.05984 June 15, 2016 September 15, 2016 September 29, 2016 $ 876,144 $ 0.05984 September 16, 2016 October 17, 2016 October 28, 2016 $ 876,144 $ 0.05984 September 16, 2016 November 15, 2016 November 29, 2016 $ 876,144 $ 0.05984 September 16, 2016 December 15, 2016 December 29, 2016 $ 876,144 $ 0.05984 November 9, 2016 November 21, 2016 December 27, 2016 $ 19,384,684 $ 1.32394 |
Series A Preferred Stock [Member] | |
Stockholders' Equity Note [Line Items] | |
Schedule of Dividends Payable [Table Text Block] | The following table presents cash dividends declared by the Company on its Series A Preferred Stock for the year ended December 31, 2016: Declaration Date Record Date Payment Date Dividend Amount Cash Dividend Per Share December 16, 2015 January 15, 2016 January 27, 2016 $ 293,503 $ 0.18230 December 16, 2015 February 16, 2016 February 26, 2016 $ 293,503 $ 0.18230 December 16, 2015 March 15, 2016 March 28, 2016 $ 293,503 $ 0.18230 March 16, 2016 April 15, 2016 April 27, 2016 $ 293,503 $ 0.18230 March 16, 2016 May 16, 2016 May 27, 2016 $ 293,503 $ 0.18230 March 16, 2016 June 15, 2016 June 27, 2016 $ 293,503 $ 0.18230 June 15, 2016 July 15, 2016 July 27, 2016 $ 293,503 $ 0.18230 June 15, 2016 August 15, 2016 August 29, 2016 $ 293,503 $ 0.18230 June 15, 2016 September 15, 2016 September 27, 2016 $ 293,503 $ 0.18230 September 16, 2016 October 17, 2016 October 27, 2016 $ 293,503 $ 0.18230 September 16, 2016 November 15, 2016 November 28, 2016 $ 293,503 $ 0.18230 September 16, 2016 December 15, 2016 December 27, 2016 $ 293,503 $ 0.18230 |
EARNINGS PER SHARE (as restat_2
EARNINGS PER SHARE (as restated) (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Earnings Per Share [Abstract] | |
Schedule of Earnings Per Share, Basic, by Common Class, Including Two Class Method [Table Text Block] | The following tables provide additional disclosure regarding the computation for the years ended December 31, 2016, December 31, 2015 and December 31, 2014: Year Ended December 31, 2016 Year Ended December 31, 2015 Year Ended December 31, 2014 Net income (loss) $ (10,426,645 ) $ 450,479 $ 3,313,785 Less dividends paid: Common stock $ 29,898,918 $ 19,874,663 $ 18,229,875 Preferred stock 3,522,036 3,522,036 2,887,296 33,420,954 23,396,699 21,117,171 Undistributed earnings $ (43,847,599 ) $ (22,946,220 ) $ (17,803,386 ) Unvested Share-Based Unvested Share-Based Unvested Share-Based Payment Awards Common Stock Payment Awards Common Stock Payment Awards Common Stock Distributed earnings $ 2.04 $ 2.04 $ 1.35 $ 1.35 $ 1.47 $ 1.47 Undistributed earnings (deficit) (2.99 ) (2.99 ) (1.56 ) (1.56 ) (1.44 ) (1.44 ) Total $ (0.95 ) $ (0.95 ) $ (0.21 ) $ (0.21 ) $ 0.03 $ 0.03 |
INCOME TAXES (as restated) (Tab
INCOME TAXES (as restated) (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Income Tax Disclosure [Abstract] | |
Schedule of Components of Income Tax Expense (Benefit) [Table Text Block] | The following table reconciles the Company’s TRS GAAP net income (loss) to taxable income (in thousands): Year Ended December 31, 2016 2015 2014 (in thousands) (in thousands) (in thousands) GAAP consolidated net income (loss) attributable to Five Oaks Investment Corp (10,426 ) 450 3,313 GAAP net loss (income) from REIT operations 9,090 (1,826 ) (3,650 ) GAAP net income (loss) of taxable subsidiary (1,336 ) (1,376 ) (337 ) Capitalized transaction fees (41 ) (41 ) 596 Unrealized gain (loss) 1,964 2,041 (3,670 ) Deferred income 204 - - Tax income (loss) of taxable subsidiary before utilization of net operating losses 791 624 (3,411 ) Utilizations of net operating losses (791 ) (624 ) - Net tax income of taxable subsidiaries - - - |
Schedule of Deferred Tax Assets and Liabilities [Table Text Block] | The TRS has a deferred tax asset on which the Company has a 100% valuation allowance, comprised of the following (in thousands): As of December 31, 2016 As of December 31, 2015 Accumulated net operating losses of TRS 758 1,058 Unrealized gain (loss) 127 (618 ) Capitalized transaction costs 196 210 Deferred income 77 - AMT Credit 12 9 Deferred tax asset 1,170 659 Valuation allowance (1,170 ) (659 ) Net non-current deferred tax asset (liability) - - |
RESTATEMENT OF PREVIOUSLY ISS_2
RESTATEMENT OF PREVIOUSLY ISSUED FINANCIAL STATEMENTS (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Accounting Changes and Error Corrections [Abstract] | |
Schedule of Error Corrections and Prior Period Adjustments [Table Text Block] | Consolidated Balance Sheets December 31, 2016 As previously reported Restatement adjustments As restated ASSETS Available-for-sale securities, at fair value (includes pledged securities of $876,121,505 for December 31, 2016 $ 870,929,601 $ - $ 870,929,601 Mortgage loans held-for-sale, at fair value 2,849,536 - 2,849,536 Multi-family loans held in securitization trusts, at fair value 1,222,905,433 - 1,222,905,433 Residential loans held in securitization trusts, at fair value 141,126,720 - 141,126,720 Mortgage servicing rights, at fair value 3,440,809 - 3,440,809 Cash and cash equivalents 27,534,374 - 27,534,374 Restricted cash 10,355,222 - 10,355,222 Deferred offering costs 96,489 - 96,489 Accrued interest receivable 7,619,717 - 7,619,717 Dividends receivable 122 - 122 Investment related receivable 3,914,458 - 3,914,458 Derivative assets, at fair value 8,053,813 - 8,053,813 Other assets 774,909 - 774,909 Total assets $ 2,299,601,203 $ - $ 2,299,601,203 LIABILITIES AND STOCKHOLDERS' EQUITY LIABILITIES: Repurchase agreements: Available-for-sale securities $ 804,811,000 $ - $ 804,811,000 Multi-family securitized debt obligations 1,204,583,678 - 1,204,583,678 Residential securitized debt obligations 134,846,348 - 134,846,348 Accrued interest payable 5,467,916 - 5,467,916 Dividends payable 39,132 - 39,132 Deferred income 203,743 - 203,743 Due to broker 4,244,678 - 4,244,678 Fees and expenses payable to Manager 880,000 - 880,000 Other accounts payable and accrued expenses 2,057,843 - 2,057,843 Total liabilities 2,157,134,338 - 2,157,134,338 STOCKHOLDERS' EQUITY: Preferred Stock: par value $0.01 per share; 50,000,000 shares authorized, 8.75% Series A cumulative redeemable, $25 liquidation preference, 1,610,000 issued and outstanding at December 31, 2016 37,156,972 - 37,156,972 Common Stock: par value $0.01 per share; 450,000,000 shares authorized, 17,539,258 shares issued and outstanding, at December 31, 2016 175,348 - 175,348 Additional paid-in capital 204,264,868 - 204,264,868 Accumulated other comprehensive income (loss) (9,268,630 ) 2,436,690 (6,831,940 ) Cumulative distributions to stockholders (89,224,194 ) - (89,224,194 ) Accumulated earnings (deficit) (637,499 ) (2,436,690 ) (3,074,189 ) Total stockholders' equity 142,466,865 - 142,466,865 Total liabilities and stockholders' equity $ 2,299,601,203 $ - $ 2,299,601,203 Consolidated Statements of Operations Year Ended December 31, 2016 As previously reported Restatement adjustments As restated Revenues: Interest income: Available-for-sale securities $ 23,475,765 $ - $ 23,475,765 Mortgage loans held-for-sale 430,986 - 430,986 Multi-family loans held in securitization trusts 58,587,780 - 58,587,780 Residential loans held in securitization trusts 10,585,191 - 10,585,191 Cash and cash equivalents 41,994 - 41,994 Interest expense: - Repurchase agreements - available-for-sale securities (6,237,777 ) - (6,237,777 ) Repurchase agreements - mortgage loans held-for-sale (237,807 ) - (237,807 ) Multi-family securitized debt obligations (54,940,386 ) - (54,940,386 ) Residential securitized debt obligations (8,117,402 ) - (8,117,402 ) Net interest income 23,588,344 - 23,588,344 Other-than-temporary impairments Increase in credit reserves (541,342 ) 1,286,834 745,492 Additional other-than-temporary credit impairment losses (183,790 ) - (183,790 ) Total impairment losses recognized in earnings (725,132 ) 1,286,834 561,702 Other income: Realized gain (loss) on sale of investments, net (7,216,137 ) - (7,216,137 ) Change in unrealized gain (loss) on fair value option securities (4,683,410 ) (3,723,524 ) (8,406,934 ) Realized gain (loss) on derivative contracts, net (3,089,001 ) - (3,089,001 ) Change in unrealized gain (loss) on derivative contracts, net 5,495,463 - 5,495,463 Realized gain (loss) on mortgage loans held-for-sale 94,187 - 94,187 Change in unrealized gain (loss) on mortgage loans held-for-sale (151,023 ) - (151,023 ) Change in unrealized gain (loss) on mortgage service rights (827,864 ) - (827,864 ) Change in unrealized gain (loss) on multi-family loans held in securitization trusts (5,219,530 ) - (5,219,530 ) Change in unrealized gain (loss) on residential loans held in securitization trusts 404,720 - 404,720 Tax interest expense (1,860,000 ) - (1,860,000 ) Servicing income 932,424 - 932,424 Other income 32,276 - 32,276 Total other income (loss) (16,087,895 ) (3,723,524 ) (19,811,419 ) Expenses: Management fee 2,472,353 - 2,472,353 General and administrative expenses 5,867,851 - 5,867,851 Operating expenses reimbursable to Manager 4,747,275 - 4,747,275 Other operating expenses 1,480,341 - 1,480,341 Compensation expense 197,452 - 197,452 Total expenses 14,765,272 - 14,765,272 Net income (loss) (7,989,955 ) (2,436,690 ) (10,426,645 ) Dividends to preferred stockholders (3,522,036 ) - (3,522,036 ) Net income (loss) attributable to common stockholders $ (11,511,991 ) $ (2,436,690 ) $ (13,948,681 ) Earnings (loss) per share: Net income attributable to common stockholders (basic and diluted) $ (11,511,991 ) $ (2,436,690 ) $ (13,948,681 ) Weighted average number of shares of common stock outstanding 14,641,701 14,641,701 14,641,701 Basic and diluted income per share $ (0.79 ) $ (0.17 ) $ (0.95 ) Dividends declared per share of common stock $ 2.04 $ - $ 2.04 Consolidated Statements of Comprehensive Income (Loss) Year Ended December 31, 2016 As previously reported Restatement adjustments As restated Net income $ (7,989,955 ) $ (2,436,690 ) $ (10,426,645 ) Other comprehensive income (loss): Increase (decrease) in net unrealized gain on available-for-sale securities, net (3,824,461 ) 3,723,524 (100,937 ) Reclassification adjustment for net gain (loss) included in net income (5,589,740 ) - (5,589,740 ) Reclassification adjustment for other-than-temporary impairments included in net income 541,342 (1,286,834 ) (745,492 ) Total other comprehensive income (loss) (8,872,859 ) 2,436,690 (6,436,169 ) Less: Dividends to preferred stockholders (3,522,036 ) - (3,522,036 ) Comprehensive income (loss) attributable to common stockholders $ (20,384,850 ) $ - $ (20,384,850 ) Consolidated Statements of Cash Flows December 31, 2016 As previously reported Restatement adjustments As restated Cash flows from operating activities: Net income (loss) $ (7,989,955 ) $ (2,436,690 ) $ (10,426,645 ) Adjustments to reconcile net income (loss) to net cash provided by operating activities: Other-than-temporary impairment charges 725,132 (1,286,834 ) (561,702 ) Amortization/accretion of available-for-sale securities premiums and discounts, net (6,751,667 ) - (6,751,667 ) Realized (gain) loss on sale of investments, net 7,216,137 - 7,216,137 Realized (gain) loss on derivative contracts 3,089,001 - 3,089,001 Realized (gain) loss on mortgage loans held-for-sale (94,187 ) - (94,187 ) Unrealized (gain) loss on fair value option securities 4,683,410 3,723,524 8,406,934 Unrealized (gain) loss on derivative contracts (5,495,463 ) - (5,495,463 ) Unrealized (gain) loss on mortgage loans held-for-sale 151,023 - 151,023 Unrealized (gain) loss on mortgage service rights 827,864 - 827,864 Unrealized (gain) loss on multi-family loans held in securitization trusts 5,219,530 - 5,219,530 Unrealized (gain) loss on residential loans held in securitization trusts (404,720 ) - (404,720 ) Restricted stock compensation expense 35,785 - 35,785 Net change in: Accrued interest receivable (707,019 ) - (707,019 ) Deferred offering costs (96,489 ) - (96,489 ) Dividends receivable 25,900 - 25,900 Other assets (244,441 ) - (244,441 ) Accrued interest payable 119,993 - 119,993 Deferred income 203,743 - 203,743 Fees and expenses payable to Manager 37,097 - 37,097 Other accounts payable and accrued expenses 1,790,336 - 1,790,336 Net cash provided by operating activities 2,341,010 - 2,341,010 Cash flows from investing activities: Purchase of available-for-sale securities (585,984,081 ) - (585,984,081 ) Purchase of mortgage loans held-for-sale (14,772,535 ) - (14,772,535 ) Proceeds from sales of available-for-sale securities 263,153,843 - 263,153,843 Proceeds from mortgage loans held-for-sale 22,490,929 - 22,490,929 Proceeds from FHLBI stock 2,403,000 - 2,403,000 Net proceeds from (payments for) derivative contracts (3,089,001 ) - (3,089,001 ) Principal payments from available-for-sale securities 96,655,967 - 96,655,967 Principal payments from mortgage loans held-for-sale 275,636 - 275,636 Investment related receivable (2,323,115 ) - (2,323,115 ) Restricted cash (2,180,584 ) - (2,180,584 ) Due to broker 4,244,678 - 4,244,678 Net cash used in investing activities (219,125,263 ) - (219,125,263 ) Cash flows from financing activities: Net proceeds from issuance of common stock 15,503,885 - 15,503,885 Purchase of treasury stock (283,565 ) - (283,565 ) Dividends paid on common stock (29,898,918 ) - (29,898,918 ) Dividends paid on preferred stock (3,522,036 ) - (3,522,036 ) Proceeds from repurchase agreements - available-for-sale securities 7,940,492,000 - 7,940,492,000 Proceeds from repurchase agreements - mortgage loans held-for-sale 16,405,081 - 16,405,081 Payments for FHLBI advances (49,697,000 ) - (49,697,000 ) Principal repayments of repurchase agreements - available-for-sale securities (7,644,912,000 ) - (7,644,912,000 ) Principal repayments of repurchase agreements - mortgage loans held-for-sale (25,909,538 ) - (25,909,538 ) Net cash provided by financing activities 218,177,909 - 218,177,909 Net increase (decrease) in cash and cash equivalents 1,393,656 - 1,393,656 Cash and cash equivalents, beginning of period 26,140,718 - 26,140,718 Cash and cash equivalents, end of period $ 27,534,374 $ - $ 27,534,374 Supplemental disclosure of cash flow information Cash paid for interest $ 6,355,591 $ - $ 6,355,591 Non-cash investing and financing activities information $ $ $ Dividends declared but not paid at end of period $ 39,132 $ - $ 39,132 Net change in unrealized gain (loss) on available-for-sale securities $ (8,872,859 ) $ 2,436,690 $ (6,436,169 ) Consolidation of multi-family loans held in securitization trusts $ 1,227,523,075 $ - $ 1,227,523,075 Consolidation of residential loans held in securitization trusts $ 141,597,866 $ - $ 141,597,866 Consolidation of multi-family securitized debt obligations $ 1,209,181,035 $ - $ 1,209,181,035 Consolidation of residential securitized debt obligations $ 135,223,045 $ - $ 135,223,045 |
QUARTERLY FINANCIAL DATA (UNA_2
QUARTERLY FINANCIAL DATA (UNAUDITED) (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Quarterly Financial Information Disclosure [Abstract] | |
Quarterly Financial Information [Table Text Block] | The following table presents a comparative breakdown of our unaudited summary quarterly financial data for the immediately preceding eight quarters. 2016 Quarter Ended (as restated *) March 31 June 30 * September 30 * December 31* Total interest income $ 24,617 $ 23,610 $ 22,733 $ 22,162 Total interest expense (18,857 ) (17,837 ) (16,580 ) (16,259 ) Net interest income 5,760 5,772 6,153 5,903 Other-than-temporary impairment (21 ) (146 ) (204 ) 933 Other income (loss) (18,275 ) (9,561 ) (908 ) 8,932 Total expenses 4,412 3,864 3,191 3,298 Net income (loss) (16,948 ) (7,800 ) 1,851 12,470 Net income (loss) attributable to common shareholders (basic and diluted) (17,828 ) (8,671 ) 970 11,580 Earnings (loss) per share: Net income (loss) attributable to common shareholders (basic and diluted) (17,828 ) (8,671 ) 970 11,580 Weighted average number of shares of common stock outstanding: 14,605,515 14,597,894 14,600,193 14,762,006 Basic and diluted income (loss) per share (1.22 ) (0.59 ) 0.07 0.78 2015 Quarter Ended March 31 June 30 September 30 December 31 Total interest income $ 31,043 $ 29,632 $ 27,401 $ 26,338 Total interest expense (21,940 ) (21,062 ) (20,301 ) (19,801 ) Net interest income 9,103 8,570 7,100 6,537 Other-than-temporary impairment (4,868 ) 567 (351 ) 1,016 Other income (loss) (5,232 ) (1,216 ) (4,944 ) 1,289 Total expenses 4,133 4,120 3,505 5,363 Net income (loss) (5,130 ) 3,801 (1,699 ) 3,479 Net income (loss) attributable to common shareholders (basic and diluted) (6,011 ) 2,930 (2,579 ) 2,588 Earnings (loss) per share: Net income (loss) attributable to common shareholders (basic and diluted) (6,011 ) 2,930 (2,579 ) 2,588 Weighted average number of shares of common stock outstanding: 14,718,750 14,721,492 14,724,750 14,719,632 Basic and diluted income (loss) per share (0.41 ) 0.20 (0.18 ) 0.18 |
ORGANIZATION AND BUSINESS OPE_2
ORGANIZATION AND BUSINESS OPERATIONS (Details Textual) | 12 Months Ended |
Dec. 31, 2016 | |
Organization And Business Operations [Line Items] | |
Operations Commenced Date | May 16, 2012 |
Entity Incorporation, State Country Name | Maryland |
Entity Incorporation, Date of Incorporation | Mar. 28, 2012 |
SUMMARY OF SIGNIFICANT ACCOUN_3
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details Textual) - USD ($) | 3 Months Ended | 12 Months Ended | ||||||||||
Dec. 31, 2016 | Sep. 30, 2016 | Jun. 30, 2016 | Mar. 31, 2016 | Dec. 31, 2015 | Sep. 30, 2015 | Jun. 30, 2015 | Mar. 31, 2015 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 15, 2015 | ||
Summary Of Significant Accounting Policies [Line Items] | ||||||||||||
Available-for-sale Securities | [1] | $ 870,929,601 | $ 571,466,581 | $ 870,929,601 | $ 571,466,581 | |||||||
Common Stock, Shares Authorized | 450,000,000 | 450,000,000 | 450,000,000 | 450,000,000 | ||||||||
Common Stock, Par or Stated Value Per Share | $ 0.01 | $ 0.01 | $ 0.01 | $ 0.01 | ||||||||
Common Stock, Shares, Issued | 17,539,258 | 14,656,394 | 17,539,258 | 14,656,394 | ||||||||
Preferred Stock, Shares Authorized | 50,000,000 | 50,000,000 | 50,000,000 | 50,000,000 | ||||||||
Preferred Stock, Par or Stated Value Per Share | $ 0.01 | $ 0.01 | $ 0.01 | $ 0.01 | ||||||||
Preferred Stock, Shares Issued | 1,610,000 | 1,610,000 | 1,610,000 | 1,610,000 | ||||||||
Stock Repurchase Program, Authorized Amount | $ 10,000,000 | |||||||||||
Prepayment Fees Percentage For Residential Mortgage Loans | 15.00% | |||||||||||
Interest Expense | $ 16,259 | $ 16,580 | $ 17,837 | $ 18,857 | $ 19,801 | $ 20,301 | $ 21,062 | $ 21,940 | $ 1,860,000 | |||
Residential Mortgage [Member] | ||||||||||||
Summary Of Significant Accounting Policies [Line Items] | ||||||||||||
Debt Instrument, Face Amount | 518,455,163 | 518,455,163 | ||||||||||
Non Agency RMBS [Member] | ||||||||||||
Summary Of Significant Accounting Policies [Line Items] | ||||||||||||
Available-for-sale Securities | 7,592,802 | 92,107,727 | 7,592,802 | $ 92,107,727 | ||||||||
Loss from Consolidation, Maximum Exposure | 24,716,861 | 117,566,291 | ||||||||||
Variable Interest Entity, Reporting Entity Involvement, Maximum Loss Exposure, Amount | 4,413,403 | 30,383,343 | 4,413,403 | 30,383,343 | ||||||||
Multi Family Mbs [Member] | ||||||||||||
Summary Of Significant Accounting Policies [Line Items] | ||||||||||||
Available-for-sale Securities | $ 73,146,566 | $ 104,025,797 | $ 73,146,566 | $ 104,025,797 | ||||||||
[1] | Our consolidated balance sheets include assets and liabilities of consolidated variable interest entities (“VIE's) as the Company is the primary beneficiary of these VIEs. As of December 31, 2016 and December 31, 2015, assets of consolidated VIEs totaled $1,369,120,941 and $1,868,482,556, respectively, and the liabilities of consolidated VIEs totaled $1,344,404,080 and $1,750,916,265, respectively |
FAIR VALUE MEASUREMENTS (Detail
FAIR VALUE MEASUREMENTS (Details Textual) - USD ($) | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Write Off Of Federal Home Loan Bank Advances | $ 11,300 | ||
Proceeds from Sale of Federal Home Loan Bank Stock | $ 2,403,000 | $ 0 | $ 0 |
AVAILABLE-FOR-SALE SECURITIES_3
AVAILABLE-FOR-SALE SECURITIES (as restated) (Details) - USD ($) | Dec. 31, 2016 | Dec. 31, 2015 | |
Debt Securities, Available-for-sale [Line Items] | |||
Mortgage-backed securities | [1] | $ 870,929,601 | $ 571,466,581 |
Agency [Member] | |||
Debt Securities, Available-for-sale [Line Items] | |||
Mortgage-backed securities | 790,190,233 | 375,333,057 | |
Agency [Member] | Government National Mortgage Association [Member] | |||
Debt Securities, Available-for-sale [Line Items] | |||
Mortgage-backed securities | 0 | 43,705,764 | |
Agency [Member] | Federal Home Loan Mortgage Corporation [Member] | |||
Debt Securities, Available-for-sale [Line Items] | |||
Mortgage-backed securities | 326,958,046 | 148,760,159 | |
Agency [Member] | Federal National Mortgage Association [Member] | |||
Debt Securities, Available-for-sale [Line Items] | |||
Mortgage-backed securities | 463,232,187 | 182,867,134 | |
Non Agency RMBS [Member] | |||
Debt Securities, Available-for-sale [Line Items] | |||
Mortgage-backed securities | 7,592,802 | 92,107,727 | |
Residential Multi Family [Member] | |||
Debt Securities, Available-for-sale [Line Items] | |||
Mortgage-backed securities | $ 73,146,566 | $ 104,025,797 | |
[1] | Our consolidated balance sheets include assets and liabilities of consolidated variable interest entities (“VIE's) as the Company is the primary beneficiary of these VIEs. As of December 31, 2016 and December 31, 2015, assets of consolidated VIEs totaled $1,369,120,941 and $1,868,482,556, respectively, and the liabilities of consolidated VIEs totaled $1,344,404,080 and $1,750,916,265, respectively |
AVAILABLE-FOR-SALE SECURITIES_4
AVAILABLE-FOR-SALE SECURITIES (as restated) (Details 1) - USD ($) | Dec. 31, 2016 | Dec. 31, 2015 | |
Debt Securities, Available-for-sale [Line Items] | |||
Face Value | $ 884,520,701 | $ 626,179,292 | |
Unamortized premium | 17,748,138 | 5,826,119 | |
Unamortized discount | |||
Designated credit reserve and OTTI | [1] | (1,929,833) | (8,891,565) |
Net, unamortized | (27,841,262) | (57,280,275) | |
Amortized Cost | 872,497,744 | 565,833,571 | |
Gross unrealized gain | 3,408,141 | 5,248,186 | |
Gross unrealized (loss) | (10,240,388) | (6,389,447) | |
Fair Value | [2] | 870,929,601 | 571,466,581 |
Agency [Member] | |||
Debt Securities, Available-for-sale [Line Items] | |||
Face Value | 779,219,115 | 370,394,525 | |
Unamortized premium | 17,748,138 | 5,745,862 | |
Unamortized discount | |||
Designated credit reserve and OTTI | [1] | 0 | 0 |
Net, unamortized | (1,311,292) | (1,929,145) | |
Amortized Cost | 795,655,961 | 374,211,242 | |
Gross unrealized gain | 2,663,975 | 3,234,673 | |
Gross unrealized (loss) | (8,129,703) | (2,112,858) | |
Fair Value | 790,190,233 | 375,333,057 | |
Non-Agency Not Includes Interest-Only [Member] | |||
Debt Securities, Available-for-sale [Line Items] | |||
Face Value | [3] | 4,393,771 | 116,954,842 |
Unamortized premium | [3] | 0 | 80,257 |
Unamortized discount | |||
Designated credit reserve and OTTI | [1] | (1,929,833) | (8,891,565) |
Net, unamortized | [3] | (369,887) | (22,101,062) |
Amortized Cost | [3] | 2,094,051 | 86,042,472 |
Gross unrealized gain | [3] | 234,647 | 1,099,957 |
Gross unrealized (loss) | [3] | 0 | (1,808,973) |
Fair Value | [3] | 2,328,698 | 85,333,456 |
Residential Multi Family [Member] | |||
Debt Securities, Available-for-sale [Line Items] | |||
Face Value | 100,907,815 | 138,829,925 | |
Unamortized premium | 0 | 0 | |
Unamortized discount | |||
Designated credit reserve and OTTI | [1] | 0 | 0 |
Net, unamortized | (26,160,083) | (33,250,068) | |
Amortized Cost | 74,747,732 | 105,579,857 | |
Gross unrealized gain | 509,519 | 913,556 | |
Gross unrealized (loss) | (2,110,685) | (2,467,616) | |
Fair Value | $ 73,146,566 | $ 104,025,797 | |
[1] | Discount designated as Credit Reserve and amount related to OTTI are generally not expected to be accreted into interest income. Amounts disclosed reflect Credit Reserve of $1,929,833 and $8,146,073 at December 31, 2016 and December 31, 2015, respectively, and OTTI of ($745,492) and $745,492 at December 31, 2016 and December 31, 2015, respectively. | ||
[2] | Our consolidated balance sheets include assets and liabilities of consolidated variable interest entities (“VIE's) as the Company is the primary beneficiary of these VIEs. As of December 31, 2016 and December 31, 2015, assets of consolidated VIEs totaled $1,369,120,941 and $1,868,482,556, respectively, and the liabilities of consolidated VIEs totaled $1,344,404,080 and $1,750,916,265, respectively | ||
[3] | Non-Agency AFS does not include interest-only securities with a notional amount of $509,109,248, book value of $14,712,374 unrealized loss of $9,448,271 and a fair value of $5,264,104 at December 31, 2016 and a notional amount of $428,230,275, book value of $7,815,919 unrealized loss of $1,041,649 and a fair value of $6,774,271 at December 31, 2015 |
AVAILABLE-FOR-SALE SECURITIES_5
AVAILABLE-FOR-SALE SECURITIES (as restated) (Details 2) - USD ($) | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Debt Securities, Available-for-sale [Line Items] | |||
Cumulative credit loss at beginning of period | $ (3,636,431) | $ 0 | $ 0 |
Additions: | |||
Initial (increase) in credit reserves | (541,342) | (745,492) | 0 |
Subsequent (increase) in credit reserves | 0 | 0 | |
Initial additional other-than-temporary credit impairment losses | (183,790) | (2,890,939) | 0 |
Subsequent additional other-than-temporary credit impairment losses | 0 | 0 | |
Reductions: | |||
For securities sold decrease in credit reserves | 1,286,835 | 0 | 0 |
For securities sold decrease in other-than-temporary impairment | 0 | 0 | 0 |
Cumulative credit (loss) at end of period | $ (3,074,728) | $ (3,636,431) | $ 0 |
AVAILABLE-FOR-SALE SECURITIES_6
AVAILABLE-FOR-SALE SECURITIES (as restated) (Details 3) - USD ($) | Dec. 31, 2016 | Dec. 31, 2015 |
Debt Securities, Available-for-sale [Line Items] | ||
Less than 12 months, Estimated Fair Value | $ 619,414,077 | $ 348,120,251 |
Less than 12 months, Gross Unrealized Losses | (8,129,704) | (5,983,726) |
Greater than 12 months, Estimated Fair Value | 45,879,433 | 6,939,257 |
Greater than 12 months, Gross Unrealized Losses | (2,110,684) | (405,720) |
Total, Estimated Fair Value | 665,293,510 | 355,059,508 |
Total, Gross Unrealized Losses | $ (10,240,388) | $ (6,389,446) |
AVAILABLE-FOR-SALE SECURITIES_7
AVAILABLE-FOR-SALE SECURITIES (as restated) (Details 4) - AFS securities [Member] - USD ($) | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Debt Securities, Available-for-sale [Line Items] | |||
AFS securities sold, at cost | $ 268,849,640 | $ 267,741,325 | $ 462,470,753 |
Proceeds from AFS securities sold | 263,143,871 | 267,567,905 | 466,239,975 |
Net realized gain (loss) on sale of AFS securities | $ (5,705,769) | $ (173,420) | $ 3,769,222 |
AVAILABLE-FOR-SALE SECURITIES_8
AVAILABLE-FOR-SALE SECURITIES (as restated) (Details 5) - USD ($) | Dec. 31, 2016 | Dec. 31, 2015 | |
Debt Securities, Available-for-sale [Line Items] | |||
Available-for-sale Securities | [1] | $ 870,929,601 | $ 571,466,581 |
Adjustable rate [Member] | |||
Debt Securities, Available-for-sale [Line Items] | |||
Available-for-sale Securities | 796,320,278 | 452,165,104 | |
Fixed rate [Member] | |||
Debt Securities, Available-for-sale [Line Items] | |||
Available-for-sale Securities | 74,609,323 | 119,301,477 | |
Agency [Member] | |||
Debt Securities, Available-for-sale [Line Items] | |||
Available-for-sale Securities | 790,190,233 | 375,333,057 | |
Agency [Member] | Adjustable rate [Member] | |||
Debt Securities, Available-for-sale [Line Items] | |||
Available-for-sale Securities | 788,727,476 | 360,057,377 | |
Agency [Member] | Fixed rate [Member] | |||
Debt Securities, Available-for-sale [Line Items] | |||
Available-for-sale Securities | 1,462,757 | 15,275,680 | |
Non-Agency [Member] | |||
Debt Securities, Available-for-sale [Line Items] | |||
Available-for-sale Securities | 7,592,802 | 92,107,727 | |
Non-Agency [Member] | Adjustable rate [Member] | |||
Debt Securities, Available-for-sale [Line Items] | |||
Available-for-sale Securities | 7,592,802 | 92,107,727 | |
Non-Agency [Member] | Fixed rate [Member] | |||
Debt Securities, Available-for-sale [Line Items] | |||
Available-for-sale Securities | 0 | 0 | |
Residential Multi Family [Member] | |||
Debt Securities, Available-for-sale [Line Items] | |||
Available-for-sale Securities | 73,146,566 | 104,025,797 | |
Residential Multi Family [Member] | Adjustable rate [Member] | |||
Debt Securities, Available-for-sale [Line Items] | |||
Available-for-sale Securities | 0 | 0 | |
Residential Multi Family [Member] | Fixed rate [Member] | |||
Debt Securities, Available-for-sale [Line Items] | |||
Available-for-sale Securities | $ 73,146,566 | $ 104,025,797 | |
[1] | Our consolidated balance sheets include assets and liabilities of consolidated variable interest entities (“VIE's) as the Company is the primary beneficiary of these VIEs. As of December 31, 2016 and December 31, 2015, assets of consolidated VIEs totaled $1,369,120,941 and $1,868,482,556, respectively, and the liabilities of consolidated VIEs totaled $1,344,404,080 and $1,750,916,265, respectively |
AVAILABLE-FOR-SALE SECURITIES_9
AVAILABLE-FOR-SALE SECURITIES (as restated) (Details 6) - USD ($) | Dec. 31, 2016 | Dec. 31, 2015 |
Debt Securities, Available-for-sale [Line Items] | ||
Less than one year | $ 0 | $ 0 |
Greater than one year and less than five years | 399,872,894 | 211,800,340 |
Greater than or equal to five years | 471,056,707 | 359,666,241 |
Total | $ 870,929,601 | $ 571,466,581 |
AVAILABLE-FOR-SALE SECURITIE_10
AVAILABLE-FOR-SALE SECURITIES (as restated) (Details 7) - USD ($) | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | ||
Debt Securities, Available-for-sale [Line Items] | |||
Designated credit reserve, Beginning Balance | $ (8,891,565) | ||
Designated credit reserve, Beginning Balance | [1] | (8,891,565) | |
Designated credit reserve, Acquisitions | 0 | ||
Designated credit reserve, Dispositions | 4,893,913 | ||
Designated credit reserve, Accretion of net discount | 0 | ||
Designated credit reserve, Realized gain on paydowns | 0 | ||
Designated credit reserve, Realized credit losses | 3,023,911 | ||
Designated credit reserve, Addition to credit reserves | (1,021,433) | ||
Designated credit reserve, Release of credit reserves | 65,341 | ||
Designated credit reserve, Ending balance | [1] | (1,929,833) | $ (8,891,565) |
Unamortized net discount, Beginning balance | (57,280,275) | ||
Unamortized net discount, Beginning balance | (57,280,275) | ||
Unamortized net discount, Acquisitions | 0 | ||
Unamortized net discount, Dispositions | 21,637,637 | ||
Unamortized net discount, Accretion of net discount | 6,703,365 | ||
Unamortized net discount, Realized gain on paydowns | 325,709 | ||
Unamortized net discount, Realized credit losses | (183,790) | ||
Unamortized net discount, Addition to credit reserves | 1,021,433 | ||
Unamortized net discount, Release of credit reserves | (65,341) | ||
Unamortized net discount, Ending balance | (27,841,262) | (57,280,275) | |
Beginning Balance, Total | (66,171,840) | ||
Acquisitions, Total | 0 | ||
Dispositions, Total | 26,531,550 | ||
Accretion of net discount, Total | 6,703,365 | ||
Realized gain on paydowns, Total | 325,709 | ||
Realized credit losses, Total | 2,840,121 | ||
Addition to credit reserves Total | 0 | ||
Release of credit reserves, Total | 0 | ||
Ending balance, Total | (29,771,095) | ||
Previous Accounting Guidance [Member] | |||
Debt Securities, Available-for-sale [Line Items] | |||
Designated credit reserve, Beginning Balance | (12,697,796) | ||
Designated credit reserve, Cumulative-effect adjustment for Linked Transactions | (36,627,321) | ||
Designated credit reserve, Beginning Balance | (8,891,565) | (49,325,117) | |
Designated credit reserve, Acquisitions | 0 | ||
Designated credit reserve, Dispositions | 0 | ||
Designated credit reserve, Accretion of net discount | 30,201,676 | ||
Designated credit reserve, Realized gain on paydowns | 0 | ||
Designated credit reserve, Realized credit losses | 10,582,246 | ||
Designated credit reserve, Addition to credit reserves | (2,669,938) | ||
Designated credit reserve, Release of credit reserves | 2,319,568 | ||
Designated credit reserve, Ending balance | (8,891,565) | ||
Unamortized net discount, Beginning balance | (17,454,022) | ||
Unamortized net discount, Cumulative-effect adjustment for Linked Transactions | (47,091,958) | ||
Unamortized net discount, Beginning balance | (57,280,275) | (64,545,980) | |
Unamortized net discount, Acquisitions | (24,446,013) | ||
Unamortized net discount, Dispositions | 20,963,895 | ||
Unamortized net discount, Accretion of net discount | 13,061,839 | ||
Unamortized net discount, Realized gain on paydowns | 226,553 | ||
Unamortized net discount, Realized credit losses | (2,890,939) | ||
Unamortized net discount, Addition to credit reserves | 2,669,938 | ||
Unamortized net discount, Release of credit reserves | (2,319,568) | ||
Unamortized net discount, Ending balance | (57,280,275) | ||
Beginning Balance, Total | (30,151,818) | ||
Cumulative-effect adjustment for Linked Transactions, Total | (83,719,279) | ||
Beginning Balance, Total | $ (66,171,840) | (113,871,097) | |
Acquisitions, Total | (24,446,013) | ||
Dispositions, Total | 20,963,895 | ||
Accretion of net discount, Total | 43,263,515 | ||
Realized gain on paydowns, Total | 226,553 | ||
Realized credit losses, Total | 7,691,307 | ||
Addition to credit reserves Total | 0 | ||
Release of credit reserves, Total | 0 | ||
Ending balance, Total | $ (66,171,840) | ||
[1] | Discount designated as Credit Reserve and amount related to OTTI are generally not expected to be accreted into interest income. Amounts disclosed reflect Credit Reserve of $1,929,833 and $8,146,073 at December 31, 2016 and December 31, 2015, respectively, and OTTI of ($745,492) and $745,492 at December 31, 2016 and December 31, 2015, respectively. |
AVAILABLE-FOR-SALE SECURITIE_11
AVAILABLE-FOR-SALE SECURITIES (as restated) (Details 8) - USD ($) | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2016 | Sep. 30, 2016 | Jun. 30, 2016 | Mar. 31, 2016 | Dec. 31, 2015 | Sep. 30, 2015 | Jun. 30, 2015 | Mar. 31, 2015 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Debt Securities, Available-for-sale [Line Items] | |||||||||||
Coupon interest | $ 22,162 | $ 22,733 | $ 23,610 | $ 24,617 | $ 26,338 | $ 27,401 | $ 29,632 | $ 31,043 | $ 16,724,278 | $ 11,087,306 | $ 11,854,700 |
Net (premium amortization)/ discount accretion | 6,751,667 | 13,210,849 | 4,705,639 | ||||||||
Interest income | 23,475,765 | 24,298,156 | 16,560,338 | ||||||||
Agency [Member] | |||||||||||
Debt Securities, Available-for-sale [Line Items] | |||||||||||
Coupon interest | 13,138,828 | 7,286,166 | 11,409,239 | ||||||||
Net (premium amortization)/ discount accretion | 341,020 | 241,550 | 603,547 | ||||||||
Interest income | 13,479,848 | 7,527,716 | 12,012,786 | ||||||||
Non Agency RMBS [Member] | |||||||||||
Debt Securities, Available-for-sale [Line Items] | |||||||||||
Coupon interest | 2,579,344 | 2,357,814 | 261,050 | ||||||||
Net (premium amortization)/ discount accretion | 1,343,594 | 7,653,839 | 4,077,481 | ||||||||
Interest income | 3,922,938 | 10,011,653 | 4,338,531 | ||||||||
Residential Multi Family [Member] | |||||||||||
Debt Securities, Available-for-sale [Line Items] | |||||||||||
Coupon interest | 1,006,106 | 1,443,326 | 184,411 | ||||||||
Net (premium amortization)/ discount accretion | 5,066,873 | 5,315,461 | 24,610 | ||||||||
Interest income | $ 6,072,979 | $ 6,758,787 | $ 209,021 |
AVAILABLE-FOR-SALE SECURITIE_12
AVAILABLE-FOR-SALE SECURITIES (as restated) (Details Textual) - USD ($) | 12 Months Ended | |||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | ||
Debt Securities, Available-for-sale [Line Items] | ||||
Other Comprehensive Income (Loss), Net of Tax, Portion Attributable to Parent | $ (6,436,169) | $ (7,604,122) | $ 18,303,304 | |
Other Than Temporary Impairment Losses Investments Portion Increase Decrease In Credit Reserves | 745,492 | (745,492) | 0 | |
Available-for-sale Securities | [1] | 870,929,601 | 571,466,581 | |
Available-for-sale Securities, Accumulated Gross Unrealized Loss, before Tax | 10,240,388 | 6,389,447 | ||
AFS securities [Member] | ||||
Debt Securities, Available-for-sale [Line Items] | ||||
Other Comprehensive Income (Loss), Net of Tax, Portion Attributable to Parent | (6,436,169) | (7,604,122) | 18,303,304 | |
legacy Non-Agency [Member] | ||||
Debt Securities, Available-for-sale [Line Items] | ||||
Securities Book Value | 14,712,374 | 7,815,919 | ||
Derivative, Notional Amount | 509,109,248 | 428,230,275 | ||
Unrealized Gain (Loss) on Securities | 9,448,271 | 1,041,649 | ||
Derivative, Fair Value, Net | 5,264,104 | 6,774,271 | ||
Available-for-sale Securities | 560,000 | 3,640,000 | ||
Available-for-sale Securities, Accumulated Gross Unrealized Loss, before Tax | 0 | 1,800,000 | $ 12,611 | |
OTTI [Member] | ||||
Debt Securities, Available-for-sale [Line Items] | ||||
Other Than Temporary Impairment Losses Investments Portion Increase Decrease In Credit Reserves | 745,492 | 745,492 | ||
Credit Reserve [Member] | ||||
Debt Securities, Available-for-sale [Line Items] | ||||
Other Than Temporary Impairment Losses Investments Portion Increase Decrease In Credit Reserves | $ 1,929,833 | $ 8,146,073 | ||
[1] | Our consolidated balance sheets include assets and liabilities of consolidated variable interest entities (“VIE's) as the Company is the primary beneficiary of these VIEs. As of December 31, 2016 and December 31, 2015, assets of consolidated VIEs totaled $1,369,120,941 and $1,868,482,556, respectively, and the liabilities of consolidated VIEs totaled $1,344,404,080 and $1,750,916,265, respectively |
MORTGAGE LOANS HELD-FOR-SALE,_3
MORTGAGE LOANS HELD-FOR-SALE, at FAIR VALUE (Details) - USD ($) | Dec. 31, 2016 | Dec. 31, 2015 | |
Mortgage loans held-for-sale [Line Items] | |||
Mortgages Held-for-sale, Fair Value Disclosure | [1] | $ 2,849,536 | $ 10,900,402 |
Mortgage Loans Held-for-sale [Member] | |||
Mortgage loans held-for-sale [Line Items] | |||
Mortgages Held-for-sale, Fair Value Disclosure | 2,849,536 | 10,900,402 | |
Unpaid principal balance [Member] | Mortgage Loans Held-for-sale [Member] | |||
Mortgage loans held-for-sale [Line Items] | |||
Mortgages Held-for-sale, Fair Value Disclosure | 2,867,263 | 10,767,856 | |
Fair value adjustment [Member] | Mortgage Loans Held-for-sale [Member] | |||
Mortgage loans held-for-sale [Line Items] | |||
Mortgages Held-for-sale, Fair Value Disclosure | $ (17,727) | $ 132,546 | |
[1] | Our consolidated balance sheets include assets and liabilities of consolidated variable interest entities (“VIE's) as the Company is the primary beneficiary of these VIEs. As of December 31, 2016 and December 31, 2015, assets of consolidated VIEs totaled $1,369,120,941 and $1,868,482,556, respectively, and the liabilities of consolidated VIEs totaled $1,344,404,080 and $1,750,916,265, respectively |
MORTGAGE LOANS HELD-FOR-SALE,_4
MORTGAGE LOANS HELD-FOR-SALE, at FAIR VALUE (Details 1) - Mortgage Loans Held-for-sale [Member] | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Texas [Member] | ||
Concentration Risk [Line Items] | ||
Concentration Risk, Percentage | 56.00% | 20.70% |
Arizona [Member] | ||
Concentration Risk [Line Items] | ||
Concentration Risk, Percentage | 0.00% | 16.80% |
Massachussetts [Member] | ||
Concentration Risk [Line Items] | ||
Concentration Risk, Percentage | 0.00% | 12.80% |
California [Member] | ||
Concentration Risk [Line Items] | ||
Concentration Risk, Percentage | 24.40% | 11.90% |
Minnesota [Member] | ||
Concentration Risk [Line Items] | ||
Concentration Risk, Percentage | 0.00% | 9.90% |
New York [Member] | ||
Concentration Risk [Line Items] | ||
Concentration Risk, Percentage | 0.00% | 6.60% |
Pennsylvania [Member] | ||
Concentration Risk [Line Items] | ||
Concentration Risk, Percentage | 0.00% | 5.90% |
North Carolina [Member] | ||
Concentration Risk [Line Items] | ||
Concentration Risk, Percentage | 19.60% | 5.50% |
Illinois [Member] | ||
Concentration Risk [Line Items] | ||
Concentration Risk, Percentage | 0.00% | 5.10% |
MORTGAGE LOANS HELD-FOR-SALE,_5
MORTGAGE LOANS HELD-FOR-SALE, at FAIR VALUE (Details Textual) - USD ($) | Dec. 31, 2016 | Dec. 31, 2015 | |
Mortgage Loans Held For Sale At Fair Value [Line Items] | |||
Mortgages Held-for-sale, Fair Value Disclosure | [1] | $ 2,849,536 | $ 10,900,402 |
Mortgage Loans Held-or-Sale [Member] | |||
Mortgage Loans Held For Sale At Fair Value [Line Items] | |||
Mortgages Held-for-sale, Fair Value Disclosure | $ 0 | $ 10,900,000 | |
[1] | Our consolidated balance sheets include assets and liabilities of consolidated variable interest entities (“VIE's) as the Company is the primary beneficiary of these VIEs. As of December 31, 2016 and December 31, 2015, assets of consolidated VIEs totaled $1,369,120,941 and $1,868,482,556, respectively, and the liabilities of consolidated VIEs totaled $1,344,404,080 and $1,750,916,265, respectively |
THE FREMF TRUSTS (Details)
THE FREMF TRUSTS (Details) - USD ($) | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |||
Assets | |||||||
Multi-family mortgage loans held in securitization trusts | [1] | $ 1,222,905,433 | $ 1,449,774,383 | ||||
Total assets | [1] | 2,299,601,203 | 2,498,366,661 | ||||
Liabilities and Equity | |||||||
Multi-family securitized debt obligations | [1] | 1,204,583,678 | 1,364,077,012 | ||||
Liabilities | [1] | 2,157,134,338 | 2,320,872,133 | ||||
Equity | 142,466,865 | [1] | 177,494,528 | [1] | $ 212,798,130 | $ 113,925,362 | |
Total liabilities and equity | [1] | 2,299,601,203 | 2,498,366,661 | ||||
FREMF trusts [Member] | |||||||
Assets | |||||||
Multi-family mortgage loans held in securitization trusts | 1,222,905,433 | 1,449,774,383 | |||||
Receivables | 4,617,642 | 5,380,956 | |||||
Total assets | 1,227,523,075 | 1,455,155,339 | |||||
Liabilities and Equity | |||||||
Multi-family securitized debt obligations | 1,204,583,678 | 1,364,077,012 | |||||
Payables | 4,597,357 | 5,047,777 | |||||
Liabilities | 1,209,181,035 | 1,369,124,789 | |||||
Equity | 18,342,040 | 86,030,550 | |||||
Total liabilities and equity | $ 1,227,523,075 | $ 1,455,155,339 | |||||
[1] | Our consolidated balance sheets include assets and liabilities of consolidated variable interest entities (“VIE's) as the Company is the primary beneficiary of these VIEs. As of December 31, 2016 and December 31, 2015, assets of consolidated VIEs totaled $1,369,120,941 and $1,868,482,556, respectively, and the liabilities of consolidated VIEs totaled $1,344,404,080 and $1,750,916,265, respectively |
THE FREMF TRUSTS (Details 1)
THE FREMF TRUSTS (Details 1) - USD ($) | 3 Months Ended | 12 Months Ended | ||||||||||
Dec. 31, 2016 | Sep. 30, 2016 | Jun. 30, 2016 | Mar. 31, 2016 | Dec. 31, 2015 | Sep. 30, 2015 | Jun. 30, 2015 | Mar. 31, 2015 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | ||
Statements of Operations | ||||||||||||
Interest expense | $ (16,259) | $ (16,580) | $ (17,837) | $ (18,857) | $ (19,801) | $ (20,301) | $ (21,062) | $ (21,940) | $ (1,860,000) | |||
Net interest income | 5,903 | 6,153 | 5,772 | 5,760 | 6,537 | 7,100 | 8,570 | 9,103 | 23,588,344 | $ 31,309,716 | $ 17,971,303 | |
General and administrative fees | (5,867,851) | (6,660,934) | (2,901,076) | |||||||||
Unrealized gain (loss) on multi-family loans held in securitization trusts | (5,219,530) | 6,097,000 | 1,473,485 | |||||||||
Net income (loss) | $ 12,470 | $ 1,851 | $ (7,800) | $ (16,948) | $ 3,479 | $ (1,699) | $ 3,801 | $ (5,130) | (10,426,645) | 450,479 | 3,313,786 | |
FREMF trusts [Member] | ||||||||||||
Statements of Operations | ||||||||||||
Interest income | 58,587,780 | 68,016,595 | 21,158,102 | [1] | ||||||||
Interest expense | (54,940,386) | (62,157,176) | (19,400,851) | [1] | ||||||||
Net interest income | 3,647,394 | 5,859,419 | 1,757,251 | [1] | ||||||||
General and administrative fees | (2,711,189) | (3,249,208) | (1,086,165) | [1] | ||||||||
Unrealized gain (loss) on multi-family loans held in securitization trusts | (5,219,530) | 6,097,000 | 1,473,484 | [1] | ||||||||
Net income (loss) | $ (4,283,325) | $ 8,707,211 | $ 2,144,570 | [1] | ||||||||
[1] | The Company consolidated the first trust in September, 2014 and the second trust in October, 2014. |
THE FREMF TRUSTS (Details 2)
THE FREMF TRUSTS (Details 2) - FREMF trusts [Member] | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Texas | ||
Concentration Risk [Line Items] | ||
Concentration Risk, Percentage | 17.90% | 19.30% |
California | ||
Concentration Risk [Line Items] | ||
Concentration Risk, Percentage | 12.20% | |
New York | ||
Concentration Risk [Line Items] | ||
Concentration Risk, Percentage | 15.70% | 13.20% |
Washington | ||
Concentration Risk [Line Items] | ||
Concentration Risk, Percentage | 8.40% | 7.10% |
Colorado | ||
Concentration Risk [Line Items] | ||
Concentration Risk, Percentage | 7.50% | 6.40% |
Georgia | ||
Concentration Risk [Line Items] | ||
Concentration Risk, Percentage | 5.50% |
THE FREMF TRUSTS (Details Textu
THE FREMF TRUSTS (Details Textual) - FREMF trusts [Member] - USD ($) | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Balance Sheet | ||
Investment of Multi-Family Mortgage Backed Securities MBS, Net Carrying Value | $ 18,342,040 | $ 86,030,550 |
Multi-family loans held in securitization trusts, unpaid principal balance | 1,147,753,367 | 1,371,258,074 |
Multi-family securitized debt obligations, unpaid principal balance | $ 1,147,753,367 | $ 1,371,258,074 |
RESIDENTIAL MORTGAGE LOAN SEC_3
RESIDENTIAL MORTGAGE LOAN SECURITIZATION TRUSTS (Details) - USD ($) | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |||
Assets | |||||||
Residential mortgage loans held in securitization trusts | [1] | $ 1,222,905,433 | $ 1,449,774,383 | ||||
Total assets | [1] | 2,299,601,203 | 2,498,366,661 | ||||
Liabilities and Equity | |||||||
Residential securitized debt obligations | [1] | 1,204,583,678 | 1,364,077,012 | ||||
Liabilities | [1] | 2,157,134,338 | 2,320,872,133 | ||||
Equity | 142,466,865 | [1] | 177,494,528 | [1] | $ 212,798,130 | $ 113,925,362 | |
Total liabilities and equity | [1] | 2,299,601,203 | 2,498,366,661 | ||||
Residential Mortgage [Member] | |||||||
Assets | |||||||
Residential mortgage loans held in securitization trusts | 141,126,720 | 411,881,097 | |||||
Receivables | 471,146 | 1,446,120 | |||||
Total assets | 141,597,866 | 413,327,217 | |||||
Liabilities and Equity | |||||||
Residential securitized debt obligations | 134,846,348 | 380,638,423 | |||||
Payables | 376,697 | 1,153,053 | |||||
Liabilities | 135,223,045 | 381,791,476 | |||||
Equity | 6,374,821 | 31,535,741 | |||||
Total liabilities and equity | $ 141,597,866 | $ 413,327,217 | |||||
[1] | Our consolidated balance sheets include assets and liabilities of consolidated variable interest entities (“VIE's) as the Company is the primary beneficiary of these VIEs. As of December 31, 2016 and December 31, 2015, assets of consolidated VIEs totaled $1,369,120,941 and $1,868,482,556, respectively, and the liabilities of consolidated VIEs totaled $1,344,404,080 and $1,750,916,265, respectively |
RESIDENTIAL MORTGAGE LOAN SEC_4
RESIDENTIAL MORTGAGE LOAN SECURITIZATION TRUSTS (Details 1) - USD ($) | 3 Months Ended | 12 Months Ended | ||||||||||
Dec. 31, 2016 | Sep. 30, 2016 | Jun. 30, 2016 | Mar. 31, 2016 | Dec. 31, 2015 | Sep. 30, 2015 | Jun. 30, 2015 | Mar. 31, 2015 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | ||
Statements of Operations | ||||||||||||
Interest expense | $ (16,259) | $ (16,580) | $ (17,837) | $ (18,857) | $ (19,801) | $ (20,301) | $ (21,062) | $ (21,940) | $ (1,860,000) | |||
Net interest income | 5,903 | 6,153 | 5,772 | 5,760 | 6,537 | 7,100 | 8,570 | 9,103 | 23,588,344 | $ 31,309,716 | $ 17,971,303 | |
General and administrative fees | (5,867,851) | (6,660,934) | (2,901,076) | |||||||||
Unrealized gain (loss) on residential mortgage loans held in securitization trusts | 404,720 | (8,153,474) | 3,059,647 | |||||||||
Net income (loss) | $ 12,470 | $ 1,851 | $ (7,800) | $ (16,948) | $ 3,479 | $ (1,699) | $ 3,801 | $ (5,130) | (10,426,645) | 450,479 | 3,313,786 | |
Residential Mortgage [Member] | ||||||||||||
Statements of Operations | ||||||||||||
Interest income | 10,585,191 | 19,986,204 | 4,438,633 | [1] | ||||||||
Interest expense | (8,117,402) | (13,156,912) | (3,575,168) | [1] | ||||||||
Net interest income | 2,467,789 | 6,829,292 | 863,465 | [1] | ||||||||
General and administrative fees | (266,957) | (635,547) | (44,267) | [1] | ||||||||
Unrealized gain (loss) on residential mortgage loans held in securitization trusts | 404,720 | (8,153,474) | 3,059,647 | [1] | ||||||||
Net income (loss) | $ 2,605,552 | $ (1,959,729) | $ 3,878,845 | [1] | ||||||||
[1] | The Company consolidated the first trust in October, 2014, and the second trust in December, 2014. |
RESIDENTIAL MORTGAGE LOAN SEC_5
RESIDENTIAL MORTGAGE LOAN SECURITIZATION TRUSTS (Details 2) - Residential Mortgage [Member] | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
California [Member] | ||
Balance Sheet | ||
Concentration Risk, Percentage | 37.60% | 45.50% |
Washington [Member] | ||
Balance Sheet | ||
Concentration Risk, Percentage | 15.40% | 13.30% |
Massachussetts [Member] | ||
Balance Sheet | ||
Concentration Risk, Percentage | 8.40% | 6.40% |
Florida [Member] | ||
Balance Sheet | ||
Concentration Risk, Percentage | 5.70% | 0.00% |
Tennessee [Member] | ||
Balance Sheet | ||
Concentration Risk, Percentage | 4.80% | 0.00% |
RESIDENTIAL MORTGAGE LOAN SEC_6
RESIDENTIAL MORTGAGE LOAN SECURITIZATION TRUSTS (Details Textual) - USD ($) | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Mar. 31, 2016 | |
Balance Sheet | |||
Residential Mortgage Loans Held in Trust and Residential Securitized Debt Obligations, Unpaid Principal Balance | $ 202,911,543 | ||
Residential Mortgage [Member] | |||
Balance Sheet | |||
Investment of Multi-Family Mortgage Backed Securities MBS, Net Carrying Value | $ 6,374,821 | $ 31,535,741 | |
Multi-family loans held in securitization trusts, unpaid principal balance | 140,690,705 | 411,650,561 | |
Multi-family securitized debt obligations, unpaid principal balance | $ 140,690,705 | $ 411,650,561 |
USE OF SPECIAL PURPOSE ENTITI_2
USE OF SPECIAL PURPOSE ENTITIES AND VARIABLE INTEREST ENTITIES (Details Textual) - USD ($) | Dec. 31, 2016 | Dec. 31, 2015 |
Non Agency RMBS [Member] | ||
Variable Interest Entity [Line Items] | ||
Variable Interest Entity, Reporting Entity Involvement, Maximum Loss Exposure, Amount | $ 4,413,403 | $ 30,383,343 |
RESTRICTED CASH AND DUE TO BR_3
RESTRICTED CASH AND DUE TO BROKER (Details) - USD ($) | Dec. 31, 2016 | Dec. 31, 2015 | |
Restricted Cash and Cash Equivalents Items [Line Items] | |||
Restricted cash | [1] | $ 10,355,222 | $ 8,174,638 |
Broker counterparties for derivatives trading [Member] | |||
Restricted Cash and Cash Equivalents Items [Line Items] | |||
Restricted cash | (4,244,678) | 528,564 | |
Repurchase counterparties as restricted collateral [Member] | |||
Restricted Cash and Cash Equivalents Items [Line Items] | |||
Restricted cash | $ 10,355,222 | $ 7,646,074 | |
[1] | Our consolidated balance sheets include assets and liabilities of consolidated variable interest entities (“VIE's) as the Company is the primary beneficiary of these VIEs. As of December 31, 2016 and December 31, 2015, assets of consolidated VIEs totaled $1,369,120,941 and $1,868,482,556, respectively, and the liabilities of consolidated VIEs totaled $1,344,404,080 and $1,750,916,265, respectively |
BORROWINGS (Details)
BORROWINGS (Details) - USD ($) | Dec. 31, 2016 | Dec. 31, 2015 |
Short-term Debt [Line Items] | ||
Repurchase Agreements, Amount outstanding | $ 804,811,000 | $ 568,432,457 |
Repurchase Agreements, Weighted average interest rate | 1.07% | 1.19% |
Repurchase Agreements, Market value of collateral held | $ 876,121,505 | $ 697,384,372 |
Agency [Member] | ||
Short-term Debt [Line Items] | ||
Repurchase Agreements, Amount outstanding | $ 755,221,000 | $ 358,239,000 |
Repurchase Agreements, Weighted average interest rate | 0.97% | 0.66% |
Repurchase Agreements, Market value of collateral held | $ 790,190,232 | $ 374,952,510 |
Non-Agency [Member] | ||
Short-term Debt [Line Items] | ||
Repurchase Agreements, Amount outstanding | $ 7,313,000 | $ 114,512,000 |
Repurchase Agreements, Weighted average interest rate | 2.39% | 2.24% |
Repurchase Agreements, Market value of collateral held | $ 12,784,707 | $ 121,475,112 |
Multi-Family [Member] | ||
Short-term Debt [Line Items] | ||
Repurchase Agreements, Amount outstanding | $ 42,277,000 | $ 86,177,000 |
Repurchase Agreements, Weighted average interest rate | 2.52% | 1.83% |
Repurchase Agreements, Market value of collateral held | $ 73,146,566 | $ 190,056,347 |
Mortgage loans [Member] | ||
Short-term Debt [Line Items] | ||
Repurchase Agreements, Amount outstanding | $ 0 | $ 9,504,457 |
Repurchase Agreements, Weighted average interest rate | 0.00% | 2.87% |
Repurchase Agreements, Market value of collateral held | $ 0 | $ 10,900,403 |
BORROWINGS (Details 1)
BORROWINGS (Details 1) - USD ($) | Dec. 31, 2016 | Dec. 31, 2015 |
Repurchase Agreements [Line Items] | ||
Repurchase agreements | $ 804,811,000 | $ 568,432,457 |
Maturity Less than 30 Days [Member] | ||
Repurchase Agreements [Line Items] | ||
Repurchase agreements | 737,823,000 | 449,063,000 |
Maturity 31 To 60 Days [Member] | ||
Repurchase Agreements [Line Items] | ||
Repurchase agreements | 19,897,000 | 76,044,000 |
Maturity 61 To 90 Days [Member] | ||
Repurchase Agreements [Line Items] | ||
Repurchase agreements | 47,091,000 | 37,873,540 |
Maturity Over 90 Days Member [Member] | ||
Repurchase Agreements [Line Items] | ||
Repurchase agreements | $ 0 | $ 5,451,917 |
BORROWINGS (Details 2)
BORROWINGS (Details 2) - USD ($) | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | ||
Repurchase Agreement Counterparty [Line Items] | |||
Repurchase Agreement Counterparties, Amount Outstanding | $ 804,811,000 | $ 568,432,457 | |
Repurchase Agreement Counterparties, Percent of total amount outstanding | 100.00% | 100.00% | |
Repurchase Agreement Counterparties, Weighted average days to maturity | 16 days | 26 days | |
Repurchase Agreement Counterparties, Market Value of collateral held | $ 876,121,505 | $ 697,384,372 | |
Merrill Lynch [Member] | |||
Repurchase Agreement Counterparty [Line Items] | |||
Repurchase Agreement Counterparties, Amount Outstanding | $ 99,770,000 | ||
Repurchase Agreement Counterparties, Percent of total amount outstanding | 17.55% | ||
Repurchase Agreement Counterparties, Weighted average days to maturity | 30 days | ||
Repurchase Agreement Counterparties, Market Value of collateral held | $ 154,005,234 | ||
Wells Fargo Securities [Member] | |||
Repurchase Agreement Counterparty [Line Items] | |||
Repurchase Agreement Counterparties, Amount Outstanding | $ 33,666,000 | $ 32,192,000 | |
Repurchase Agreement Counterparties, Percent of total amount outstanding | 4.18% | 5.66% | |
Repurchase Agreement Counterparties, Weighted average days to maturity | 8 days | 10 days | |
Repurchase Agreement Counterparties, Market Value of collateral held | $ 57,627,433 | $ 53,711,547 | |
Other North America [Member] | |||
Repurchase Agreement Counterparty [Line Items] | |||
Repurchase Agreement Counterparties, Amount Outstanding | $ 703,788,000 | $ 291,806,000 | |
Repurchase Agreement Counterparties, Percent of total amount outstanding | 87.45% | 51.34% | |
Repurchase Agreement Counterparties, Weighted average days to maturity | 16 days | 25 days | |
Repurchase Agreement Counterparties, Market Value of collateral held | $ 742,690,286 | $ 315,040,818 | |
Europe [Member] | |||
Repurchase Agreement Counterparty [Line Items] | |||
Repurchase Agreement Counterparties, Amount Outstanding | [1] | $ 4,624,000 | $ 56,099,457 |
Repurchase Agreement Counterparties, Percent of total amount outstanding | [1] | 0.57% | 9.87% |
Repurchase Agreement Counterparties, Weighted average days to maturity | [1] | 44 days | 46 days |
Repurchase Agreement Counterparties, Market Value of collateral held | [1] | $ 9,605,308 | $ 76,656,547 |
Asia [Member] | |||
Repurchase Agreement Counterparty [Line Items] | |||
Repurchase Agreement Counterparties, Amount Outstanding | [1] | $ 62,733,000 | $ 88,565,000 |
Repurchase Agreement Counterparties, Percent of total amount outstanding | [1] | 7.79% | 15.58% |
Repurchase Agreement Counterparties, Weighted average days to maturity | [1] | 14 days | 16 days |
Repurchase Agreement Counterparties, Market Value of collateral held | [1] | $ 66,198,478 | $ 97,970,226 |
[1] | Counterparties domiciled in Europe and Asia, or their U.S. subsidiaries. |
BORROWINGS (Details Textual)
BORROWINGS (Details Textual) - USD ($) | Dec. 31, 2016 | Dec. 31, 2015 |
Repurchase Agreements [Line Items] | ||
Repurchase Agreements Weighted Average Interest Rate | 1.07% | 1.19% |
Capital | $ 75,000,000 | |
Percentage stockholders' equity | 50.00% |
DERIVATIVE INSTRUMENTS HEDGIN_3
DERIVATIVE INSTRUMENTS HEDGING AND NON-HEDGING ACTIVITIES (Details) | Dec. 31, 2016USD ($) | Dec. 31, 2015USD ($) |
Derivatives, Fair Value [Line Items] | ||
Derivative Asset, Number of Instruments Held | 10,501 | 6,278 |
Derivative Liability, Number of Instruments Held | 0 | 0 |
Derivative Assets, Fair value | $ 8,053,813 | $ 2,558,350 |
Derivative Liabilities, Fair value | 0 | 0 |
Derivative Assets, Notional Amount | 10,501,000,000 | 5,945,000,000 |
Derivative Liabilities, Notional Amount | $ 0 | $ 0 |
Eurodollar Futures [Member] | ||
Derivatives, Fair Value [Line Items] | ||
Derivative Asset, Number of Instruments Held | 10,501 | 5,908 |
Derivative Liability, Number of Instruments Held | 0 | 0 |
Derivative Assets, Fair value | $ 8,053,813 | $ 2,425,538 |
Derivative Liabilities, Fair value | 0 | 0 |
Derivative Assets, Notional Amount | 10,501,000,000 | 5,908,000,000 |
Derivative Liabilities, Notional Amount | $ 0 | $ 0 |
Deliverable Swap Futures [Member] | ||
Derivatives, Fair Value [Line Items] | ||
Derivative Asset, Number of Instruments Held | 70 | |
Derivative Liability, Number of Instruments Held | 0 | |
Derivative Assets, Fair value | $ 27,343 | |
Derivative Liabilities, Fair value | 0 | |
Derivative Assets, Notional Amount | 7,000,000 | |
Derivative Liabilities, Notional Amount | $ 0 | |
Treasury Note Futures [Member] | ||
Derivatives, Fair Value [Line Items] | ||
Derivative Asset, Number of Instruments Held | 300 | |
Derivative Liability, Number of Instruments Held | 0 | |
Derivative Assets, Fair value | $ 105,469 | |
Derivative Liabilities, Fair value | 0 | |
Derivative Assets, Notional Amount | 30,000,000 | |
Derivative Liabilities, Notional Amount | $ 0 |
DERIVATIVE INSTRUMENTS HEDGIN_4
DERIVATIVE INSTRUMENTS HEDGING AND NON-HEDGING ACTIVITIES (Details 1) - USD ($) | Dec. 31, 2016 | Dec. 31, 2015 | |
Derivative [Line Items] | |||
Gross amounts of recognized assets | $ 8,053,813 | $ 2,558,350 | |
Gross amounts offset in the Balance Sheet | 0 | 0 | |
Net amounts of assets presented in the Balance Sheet | 8,053,813 | 2,558,350 | |
Gross amounts not offset in the Balance Sheet, Financial instruments | [1] | 0 | 0 |
Gross amounts not offset in the Balance Sheet, Cash collateral (Received) / Pledged | [1] | 0 | 0 |
Net amounts of assets, Net amount | [2] | 8,053,813 | 2,558,350 |
Gross amounts of recognized liabilities | (804,811,000) | (568,432,457) | |
Gross amounts offset in the Balance Sheet | 0 | 0 | |
Net amounts of liabilities presented in the Balance Sheet | (804,811,000) | (568,432,457) | |
Gross amounts not offset in the Balance Sheet, Financial instruments | [1] | 0 | 0 |
Gross amounts not offset in the Balance Sheet, Cash collateral (Received) / Pledged | [1] | 0 | 0 |
Net amounts of liabilities, Net amount | (804,811,000) | (568,432,457) | |
Repurchase agreements [Member] | |||
Derivative [Line Items] | |||
Gross amounts of recognized liabilities | (804,811,000) | (518,735,457) | |
Gross amounts offset in the Balance Sheet | 0 | 0 | |
Net amounts of liabilities presented in the Balance Sheet | (804,811,000) | (518,735,457) | |
Gross amounts not offset in the Balance Sheet, Financial instruments | [1] | 0 | 0 |
Gross amounts not offset in the Balance Sheet, Cash collateral (Received) / Pledged | [1] | 0 | 0 |
Net amounts of liabilities, Net amount | (804,811,000) | (518,735,457) | |
Eurodollar Futures [Member] | |||
Derivative [Line Items] | |||
Gross amounts of recognized assets | 8,053,813 | 2,558,350 | |
Gross amounts offset in the Balance Sheet | 0 | 0 | |
Net amounts of assets presented in the Balance Sheet | 8,053,813 | 2,558,350 | |
Gross amounts not offset in the Balance Sheet, Financial instruments | [1] | 0 | 0 |
Gross amounts not offset in the Balance Sheet, Cash collateral (Received) / Pledged | [1] | 0 | 0 |
Net amounts of assets, Net amount | $ 8,053,813 | 2,558,350 | |
FHLB Advances [Member] | |||
Derivative [Line Items] | |||
Gross amounts of recognized liabilities | (49,697,000) | ||
Gross amounts offset in the Balance Sheet | 0 | ||
Net amounts of liabilities presented in the Balance Sheet | (49,697,000) | ||
Gross amounts not offset in the Balance Sheet, Financial instruments | [1] | 0 | |
Gross amounts not offset in the Balance Sheet, Cash collateral (Received) / Pledged | [1] | 0 | |
Net amounts of liabilities, Net amount | $ (49,697,000) | ||
[1] | Amounts presented are limited in total to the net amount of assets or liabilities presented in the consolidated balance sheets by instrument. Excess cash collateral or financial assets that are pledged to counterparties may exceed the financial liabilities subject to Master Agreements or similar agreements, or counterparties may have pledged excess cash collateral to the Company that exceed the corresponding financial assets. These excess amounts are excluded from the tables above. | ||
[2] | Our consolidated balance sheets include assets and liabilities of consolidated variable interest entities (“VIE's) as the Company is the primary beneficiary of these VIEs. As of December 31, 2016 and December 31, 2015, assets of consolidated VIEs totaled $1,369,120,941 and $1,868,482,556, respectively, and the liabilities of consolidated VIEs totaled $1,344,404,080 and $1,750,916,265, respectively |
DERIVATIVE INSTRUMENTS HEDGIN_5
DERIVATIVE INSTRUMENTS HEDGING AND NON-HEDGING ACTIVITIES (Details 2) | Dec. 31, 2014USD ($) |
Derivative [Line Items] | |
Face Value | $ 289,500,610 |
Unamortized premium | 0 |
Unamortized discount | |
Designated credit reserve and OTTI | (36,627,428) |
Net, unamortized | (47,092,067) |
Amortized Cost | 205,781,115 |
Gross unrealized gain | 7,447,176 |
Gross unrealized (loss) | (2,989,633) |
Fair Value | 210,238,658 |
Non-Agency [Member] | |
Derivative [Line Items] | |
Face Value | 186,532,050 |
Unamortized premium | 0 |
Unamortized discount | |
Designated credit reserve and OTTI | (36,627,428) |
Net, unamortized | (28,768,448) |
Amortized Cost | 121,136,174 |
Gross unrealized gain | 5,676,815 |
Gross unrealized (loss) | (2,384,676) |
Fair Value | 124,428,313 |
Multifamily [Member] | |
Derivative [Line Items] | |
Face Value | 102,968,560 |
Unamortized premium | 0 |
Unamortized discount | |
Designated credit reserve and OTTI | 0 |
Net, unamortized | (18,323,619) |
Amortized Cost | 84,644,941 |
Gross unrealized gain | 1,770,361 |
Gross unrealized (loss) | (604,957) |
Fair Value | $ 85,810,345 |
DERIVATIVE INSTRUMENTS HEDGIN_6
DERIVATIVE INSTRUMENTS HEDGING AND NON-HEDGING ACTIVITIES (Details 3) - Linked Repurchase Agreements [Member] | 12 Months Ended |
Dec. 31, 2014USD ($) | |
Derivative [Line Items] | |
Designated credit reserve, Beginning balance | $ (29,857,597) |
Designated credit reserve, Acquisitions | (19,384,939) |
Designated credit reserve, Dispositions | 9,468,964 |
Designated credit reserve, Accretion of net discount | 0 |
Designated credit reserve, Realized credit losses | 3,146,144 |
Designated credit reserve, Release of credit reserves | 0 |
Designated credit reserve, Ending balance | (36,627,428) |
Unamortized net discount, Beginning balance | (30,770,386) |
Unamortized net discount, Acquisitions | (47,651,628) |
Unamortized net discount, Dispositions | 15,465,093 |
Unamortized net discount, Accretion of net discount | 12,122,919 |
Unamortized net discount, Realized credit losses | 0 |
Unamortized net discount, Release of credit reserves | 3,741,935 |
Unamortized net discount, Ending balance | (47,092,067) |
Beginning balance, Total | (60,627,983) |
Acquisitions, Total | (67,036,567) |
Dispositions, Total | 24,934,057 |
Accretion of net discount, Total | 12,122,919 |
Realized credit losses, Total | 3,146,144 |
Release of credit reserves, Total | 3,741,935 |
Ending balance, Total | $ (83,719,495) |
DERIVATIVE INSTRUMENTS HEDGIN_7
DERIVATIVE INSTRUMENTS HEDGING AND NON-HEDGING ACTIVITIES (Details 4) - USD ($) | 12 Months Ended | |||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | ||
Repurchase Agreement Counterparty [Line Items] | ||||
Repurchase Agreement Counterparties, Amount Outstanding | $ 804,811,000 | $ 568,432,457 | ||
Repurchase Agreement Counterparties, Percentage of total amount outstanding | 100.00% | 100.00% | ||
Repurchase Agreement Counterparties, Weighted average days to maturity | 16 days | 26 days | ||
Repurchase Agreement Counterparties, Market Value of collateral held | $ 876,121,505 | $ 697,384,372 | ||
Linked Repurchase Agreements [Member] | ||||
Repurchase Agreement Counterparty [Line Items] | ||||
Repurchase Agreement Counterparties, Amount Outstanding | $ 149,293,000 | |||
Repurchase Agreement Counterparties, Percentage of total amount outstanding | 100.00% | |||
Repurchase Agreement Counterparties, Weighted average days to maturity | 25 days | |||
Repurchase Agreement Counterparties, Market Value of collateral held | $ 210,238,658 | |||
North America [Member] | ||||
Repurchase Agreement Counterparty [Line Items] | ||||
Repurchase Agreement Counterparties, Amount Outstanding | $ 703,788,000 | $ 291,806,000 | ||
Repurchase Agreement Counterparties, Percentage of total amount outstanding | 87.45% | 51.34% | ||
Repurchase Agreement Counterparties, Weighted average days to maturity | 16 days | 25 days | ||
Repurchase Agreement Counterparties, Market Value of collateral held | $ 742,690,286 | $ 315,040,818 | ||
North America [Member] | Linked Repurchase Agreements [Member] | ||||
Repurchase Agreement Counterparty [Line Items] | ||||
Repurchase Agreement Counterparties, Amount Outstanding | $ 86,985,000 | |||
Repurchase Agreement Counterparties, Percentage of total amount outstanding | 58.26% | |||
Repurchase Agreement Counterparties, Weighted average days to maturity | 33 days | |||
Repurchase Agreement Counterparties, Market Value of collateral held | $ 124,620,917 | |||
Europe [Member] | ||||
Repurchase Agreement Counterparty [Line Items] | ||||
Repurchase Agreement Counterparties, Amount Outstanding | [1] | $ 4,624,000 | $ 56,099,457 | |
Repurchase Agreement Counterparties, Percentage of total amount outstanding | [1] | 0.57% | 9.87% | |
Repurchase Agreement Counterparties, Weighted average days to maturity | [1] | 44 days | 46 days | |
Repurchase Agreement Counterparties, Market Value of collateral held | [1] | $ 9,605,308 | $ 76,656,547 | |
Europe [Member] | Linked Repurchase Agreements [Member] | ||||
Repurchase Agreement Counterparty [Line Items] | ||||
Repurchase Agreement Counterparties, Amount Outstanding | [1] | $ 46,381,000 | ||
Repurchase Agreement Counterparties, Percentage of total amount outstanding | [1] | 31.07% | ||
Repurchase Agreement Counterparties, Weighted average days to maturity | [1] | 15 days | ||
Repurchase Agreement Counterparties, Market Value of collateral held | [1] | $ 62,487,229 | ||
Asia [Member] | ||||
Repurchase Agreement Counterparty [Line Items] | ||||
Repurchase Agreement Counterparties, Amount Outstanding | [1] | $ 62,733,000 | $ 88,565,000 | |
Repurchase Agreement Counterparties, Percentage of total amount outstanding | [1] | 7.79% | 15.58% | |
Repurchase Agreement Counterparties, Weighted average days to maturity | [1] | 14 days | 16 days | |
Repurchase Agreement Counterparties, Market Value of collateral held | [1] | $ 66,198,478 | $ 97,970,226 | |
Asia [Member] | Linked Repurchase Agreements [Member] | ||||
Repurchase Agreement Counterparty [Line Items] | ||||
Repurchase Agreement Counterparties, Amount Outstanding | [1] | $ 15,927,000 | ||
Repurchase Agreement Counterparties, Percentage of total amount outstanding | [1] | 10.67% | ||
Repurchase Agreement Counterparties, Weighted average days to maturity | [1] | 9 days | ||
Repurchase Agreement Counterparties, Market Value of collateral held | [1] | $ 23,130,512 | ||
[1] | Counterparties domiciled in Europe and Asia, or their U.S. subsidiaries. |
DERIVATIVE INSTRUMENTS HEDGIN_8
DERIVATIVE INSTRUMENTS HEDGING AND NON-HEDGING ACTIVITIES (Details 5) - USD ($) | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Derivative [Line Items] | |||
Change in fair value of Linked Transactions included in earnings | $ (3,089,001) | $ (12,024,730) | $ (18,214,460) |
Unrealized gain (loss) and net interest income from Linked Transactions | $ 0 | $ 0 | 10,605,848 |
Linked Tansactions [Member] | |||
Derivative [Line Items] | |||
Interest income attributable to AFS underlying Linked Transactions | 15,427,632 | ||
Interest expense attributable to linked repurchase agreement borrowings underlying Linked Transactions | (2,893,375) | ||
Change in fair value of Linked Transactions included in earnings | (1,928,409) | ||
Unrealized gain (loss) and net interest income from Linked Transactions | $ 10,605,848 |
DERIVATIVE INSTRUMENTS HEDGIN_9
DERIVATIVE INSTRUMENTS HEDGING AND NON-HEDGING ACTIVITIES (Details 6) - USD ($) | 12 Months Ended | |||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | ||
Interest rate: | ||||
Amount of realized gain (loss) | $ (3,089,001) | $ (12,024,730) | $ (18,214,460) | |
Amount of unrealized appreciation (depreciation) | 5,495,463 | 4,909,858 | (2,931,249) | |
Total | 2,406,462 | (7,114,872) | (21,145,709) | |
Interest Rate Swaps [Member] | ||||
Interest rate: | ||||
Amount of realized gain (loss) | [1] | (7,047,875) | (9,705,847) | |
Amount of unrealized appreciation (depreciation) | [1] | 1,755,108 | (761,429) | |
Total | [1] | (5,292,767) | (10,467,276) | |
Swaptions [Member] | ||||
Interest rate: | ||||
Amount of realized gain (loss) | (84,000) | (336,000) | ||
Amount of unrealized appreciation (depreciation) | 62,450 | (1,413,244) | ||
Total | (21,550) | (1,749,244) | ||
Eurodollar Futures [Member] | ||||
Interest rate: | ||||
Amount of realized gain (loss) | (3,089,001) | (4,892,855) | (8,621,211) | |
Amount of unrealized appreciation (depreciation) | 5,495,463 | 3,092,300 | (688,217) | |
Total | $ 2,406,462 | $ (1,800,555) | (9,309,428) | |
TBAs [Member] | ||||
Interest rate: | ||||
Amount of realized gain (loss) | 448,598 | |||
Amount of unrealized appreciation (depreciation) | (68,359) | |||
Total | $ 380,239 | |||
[1] | In the year ended December 31, 2015,net swap interest expense totaled $2,216,417 comprised of $2,719,563 in interest expense paid (included in realized gain (loss)) and $503,146 in accrued interest income (included in unrealized gain (loss)). In the year ended December 31, 2014, net swap interest expense totaled $3,495,232 comprised of $3,329,219 in interest expense paid (included in realized gain (loss)) and $166,013 in accrued interest income (included in unrealized gain (loss)). |
DERIVATIVE INSTRUMENTS HEDGI_10
DERIVATIVE INSTRUMENTS HEDGING AND NON-HEDGING ACTIVITIES (Details Textual) - USD ($) | 3 Months Ended | 12 Months Ended | ||||||||||
Dec. 31, 2016 | Sep. 30, 2016 | Jun. 30, 2016 | Mar. 31, 2016 | Dec. 31, 2015 | Sep. 30, 2015 | Jun. 30, 2015 | Mar. 31, 2015 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | ||
Derivative [Line Items] | ||||||||||||
Accrued interest receivable | [1] | $ 7,619,717 | $ 8,650,986 | $ 7,619,717 | $ 8,650,986 | |||||||
Accrued interest payable | [1] | 5,467,916 | 6,574,699 | 5,467,916 | 6,574,699 | |||||||
Interest Income (Expense), Net | 5,903 | $ 6,153 | $ 5,772 | $ 5,760 | 6,537 | $ 7,100 | $ 8,570 | $ 9,103 | 23,588,344 | 31,309,716 | $ 17,971,303 | |
Interest Expense | 16,259 | 16,580 | 17,837 | 18,857 | 19,801 | 20,301 | 21,062 | 21,940 | 1,860,000 | |||
Investment Income, Interest | 22,162 | $ 22,733 | $ 23,610 | $ 24,617 | 26,338 | $ 27,401 | $ 29,632 | $ 31,043 | 16,724,278 | 11,087,306 | 11,854,700 | |
Available-for-sale Securities | [1] | 870,929,601 | 571,466,581 | 870,929,601 | 571,466,581 | |||||||
Secured Debt, Repurchase Agreements | 804,811,000 | $ 568,432,457 | 804,811,000 | 568,432,457 | ||||||||
Accounting Standards Update 2014-11 [Member] | ||||||||||||
Derivative [Line Items] | ||||||||||||
Accrued interest receivable | 200,000 | 200,000 | ||||||||||
Accrued interest payable | 300,000 | 300,000 | ||||||||||
Available-for-sale Securities | 210,238,657 | 210,238,657 | ||||||||||
Secured Debt, Repurchase Agreements | $ 149,293,000 | $ 149,293,000 | ||||||||||
Swap [Member] | ||||||||||||
Derivative [Line Items] | ||||||||||||
Interest Income (Expense), Net | 2,216,417 | 3,495,232 | ||||||||||
Interest Expense | 2,719,563 | 3,329,219 | ||||||||||
Investment Income, Interest | $ 503,146 | 166,013 | ||||||||||
Linked Tansactions [Member] | ||||||||||||
Derivative [Line Items] | ||||||||||||
Accrued interest receivable | 163,970 | |||||||||||
Accrued interest payable | $ 291,518 | |||||||||||
[1] | Our consolidated balance sheets include assets and liabilities of consolidated variable interest entities (“VIE's) as the Company is the primary beneficiary of these VIEs. As of December 31, 2016 and December 31, 2015, assets of consolidated VIEs totaled $1,369,120,941 and $1,868,482,556, respectively, and the liabilities of consolidated VIEs totaled $1,344,404,080 and $1,750,916,265, respectively |
MSRs (Details)
MSRs (Details) - USD ($) | 12 Months Ended | |||
Dec. 31, 2016 | Dec. 31, 2015 | |||
Schedule Of Mortgage Service Rights Activity [Line Items] | ||||
Balance at beginning of year | $ 10,650,566 | |||
MSRs related to deconsolidation of securitization trust | 3,215 | |||
Changes in fair value due to: | ||||
Balance at end of period | 2,850,000 | [1] | $ 10,650,566 | |
Mortgage Servicing Rights [Member] | ||||
Schedule Of Mortgage Service Rights Activity [Line Items] | ||||
Balance at beginning of year | 4,268,673 | 0 | ||
MSRs retained from sales to securitizations | 0 | 4,940,630 | ||
MSRs related to deconsolidation of securitization trust | 364,163 | 0 | ||
Changes in fair value due to: | ||||
Changes in valuation inputs or assumptions used in valuation model | (102,855) | (217,663) | ||
Other changes to fair value | [2] | (1,089,172) | (454,294) | |
Balance at end of period | 3,440,809 | 4,268,673 | ||
Loans associated with MSRs | [3] | $ 397,925,409 | $ 472,886,810 | |
MSR values as percent of loans | [4] | 0.86% | 0.90% | |
[1] | No loans subject to delinquent principal or interest | |||
[2] | Amounts represent changes due to realization of expected cash flows | |||
[3] | Amounts represent the principal balance of loans associated with MSRs outstanding at December 31, 2016 and December 31, 2015, respectively | |||
[4] | Amounts represent the carrying value of MSRs at December 31, 2016 and December 31, 2015, respectively divided by the outstanding balance of the loans associated with these MSRs |
MSRs (Details 1)
MSRs (Details 1) - Mortgages [Member] - USD ($) | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Schedule Of Components Of Servicing Income [Line Items] | |||
Servicing income, net | $ 932,425 | $ 211,878 | $ 0 |
Income from MSRs, net | $ 932,425 | $ 211,878 | $ 0 |
MSRs (Details Textual)
MSRs (Details Textual) - USD ($) | Dec. 31, 2016 | Dec. 31, 2015 | |
Mortgage Servicing Rights MSR [Line Items] | |||
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate | $ 2,850,000 | [1] | $ 10,650,566 |
TRS Activity [Member] | |||
Mortgage Servicing Rights MSR [Line Items] | |||
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate | $ 397,925,409 | ||
[1] | No loans subject to delinquent principal or interest |
FINANCIAL INSTRUMENTS (Details)
FINANCIAL INSTRUMENTS (Details) - USD ($) | Dec. 31, 2016 | Dec. 31, 2015 | |
Assets: | |||
Assets, Fair Value Disclosure | $ 2,249,305,912 | $ 2,453,252,486 | |
Liabilities: | |||
Liabilities, Fair Value Disclosure | (1,339,430,026) | (1,744,715,435) | |
Fair Value, Inputs, Level 1 [Member] | |||
Assets: | |||
Assets, Fair Value Disclosure | 8,053,813 | 4,961,350 | |
Liabilities: | |||
Liabilities, Fair Value Disclosure | 0 | 0 | |
Fair Value, Inputs, Level 2 [Member] | |||
Assets: | |||
Assets, Fair Value Disclosure | 2,237,811,290 | 2,444,022,463 | |
Liabilities: | |||
Liabilities, Fair Value Disclosure | (1,339,430,026) | (1,744,715,435) | |
Fair Value, Inputs, Level 3 [Member] | |||
Assets: | |||
Assets, Fair Value Disclosure | 3,440,809 | 4,268,673 | |
Liabilities: | |||
Liabilities, Fair Value Disclosure | 0 | 0 | |
Residential Mortgage Backed Securities [Member] | |||
Assets: | |||
Assets, Fair Value Disclosure | [1] | 870,929,601 | 571,466,581 |
Residential Mortgage Backed Securities [Member] | Fair Value, Inputs, Level 1 [Member] | |||
Assets: | |||
Assets, Fair Value Disclosure | [1] | 0 | 0 |
Residential Mortgage Backed Securities [Member] | Fair Value, Inputs, Level 2 [Member] | |||
Assets: | |||
Assets, Fair Value Disclosure | [1] | 870,929,601 | 571,466,581 |
Residential Mortgage Backed Securities [Member] | Fair Value, Inputs, Level 3 [Member] | |||
Assets: | |||
Assets, Fair Value Disclosure | [1] | 0 | 0 |
Residential mortgage loans [Member] | |||
Assets: | |||
Assets, Fair Value Disclosure | 2,849,536 | 10,900,402 | |
Residential mortgage loans [Member] | Fair Value, Inputs, Level 1 [Member] | |||
Assets: | |||
Assets, Fair Value Disclosure | 0 | 0 | |
Residential mortgage loans [Member] | Fair Value, Inputs, Level 2 [Member] | |||
Assets: | |||
Assets, Fair Value Disclosure | 2,849,536 | 10,900,402 | |
Residential mortgage loans [Member] | Fair Value, Inputs, Level 3 [Member] | |||
Assets: | |||
Assets, Fair Value Disclosure | 0 | 0 | |
Multi-Family mortgage loans held in securitization trusts [Member] | |||
Assets: | |||
Assets, Fair Value Disclosure | 1,222,905,433 | 1,449,774,383 | |
Multi-Family mortgage loans held in securitization trusts [Member] | Fair Value, Inputs, Level 1 [Member] | |||
Assets: | |||
Assets, Fair Value Disclosure | 0 | 0 | |
Multi-Family mortgage loans held in securitization trusts [Member] | Fair Value, Inputs, Level 2 [Member] | |||
Assets: | |||
Assets, Fair Value Disclosure | 1,222,905,433 | 1,449,774,383 | |
Multi-Family mortgage loans held in securitization trusts [Member] | Fair Value, Inputs, Level 3 [Member] | |||
Assets: | |||
Assets, Fair Value Disclosure | 0 | 0 | |
Residential mortgage loans held in securitization trusts [Member] | |||
Assets: | |||
Assets, Fair Value Disclosure | 141,126,720 | 411,881,097 | |
Residential mortgage loans held in securitization trusts [Member] | Fair Value, Inputs, Level 1 [Member] | |||
Assets: | |||
Assets, Fair Value Disclosure | 0 | 0 | |
Residential mortgage loans held in securitization trusts [Member] | Fair Value, Inputs, Level 2 [Member] | |||
Assets: | |||
Assets, Fair Value Disclosure | 141,126,720 | 411,881,097 | |
Residential mortgage loans held in securitization trusts [Member] | Fair Value, Inputs, Level 3 [Member] | |||
Assets: | |||
Assets, Fair Value Disclosure | 0 | 0 | |
Mortgage Servicing Rights [Member] | |||
Assets: | |||
Assets, Fair Value Disclosure | 3,440,809 | 4,268,673 | |
Mortgage Servicing Rights [Member] | Fair Value, Inputs, Level 1 [Member] | |||
Assets: | |||
Assets, Fair Value Disclosure | 0 | 0 | |
Mortgage Servicing Rights [Member] | Fair Value, Inputs, Level 2 [Member] | |||
Assets: | |||
Assets, Fair Value Disclosure | 0 | 0 | |
Mortgage Servicing Rights [Member] | Fair Value, Inputs, Level 3 [Member] | |||
Assets: | |||
Assets, Fair Value Disclosure | 3,440,809 | 4,268,673 | |
FHLB Stock [Member] | |||
Assets: | |||
Assets, Fair Value Disclosure | 2,403,000 | ||
FHLB Stock [Member] | Fair Value, Inputs, Level 1 [Member] | |||
Assets: | |||
Assets, Fair Value Disclosure | 2,403,000 | ||
FHLB Stock [Member] | Fair Value, Inputs, Level 2 [Member] | |||
Assets: | |||
Assets, Fair Value Disclosure | 0 | ||
FHLB Stock [Member] | Fair Value, Inputs, Level 3 [Member] | |||
Assets: | |||
Assets, Fair Value Disclosure | 0 | ||
Eurodollar Futures [Member] | |||
Assets: | |||
Assets, Fair Value Disclosure | 8,053,813 | 2,558,350 | |
Eurodollar Futures [Member] | Fair Value, Inputs, Level 1 [Member] | |||
Assets: | |||
Assets, Fair Value Disclosure | 8,053,813 | 2,558,350 | |
Eurodollar Futures [Member] | Fair Value, Inputs, Level 2 [Member] | |||
Assets: | |||
Assets, Fair Value Disclosure | 0 | 0 | |
Eurodollar Futures [Member] | Fair Value, Inputs, Level 3 [Member] | |||
Assets: | |||
Assets, Fair Value Disclosure | 0 | 0 | |
Multi-family securitized debt obligations [Member] | |||
Liabilities: | |||
Liabilities, Fair Value Disclosure | (1,204,583,678) | (1,364,077,012) | |
Multi-family securitized debt obligations [Member] | Fair Value, Inputs, Level 1 [Member] | |||
Liabilities: | |||
Liabilities, Fair Value Disclosure | 0 | 0 | |
Multi-family securitized debt obligations [Member] | Fair Value, Inputs, Level 2 [Member] | |||
Liabilities: | |||
Liabilities, Fair Value Disclosure | (1,204,583,678) | (1,364,077,012) | |
Multi-family securitized debt obligations [Member] | Fair Value, Inputs, Level 3 [Member] | |||
Liabilities: | |||
Liabilities, Fair Value Disclosure | 0 | 0 | |
Residential securitized debt obligations [Member] | |||
Liabilities: | |||
Liabilities, Fair Value Disclosure | (134,846,348) | (380,638,423) | |
Residential securitized debt obligations [Member] | Fair Value, Inputs, Level 1 [Member] | |||
Liabilities: | |||
Liabilities, Fair Value Disclosure | 0 | 0 | |
Residential securitized debt obligations [Member] | Fair Value, Inputs, Level 2 [Member] | |||
Liabilities: | |||
Liabilities, Fair Value Disclosure | (134,846,348) | (380,638,423) | |
Residential securitized debt obligations [Member] | Fair Value, Inputs, Level 3 [Member] | |||
Liabilities: | |||
Liabilities, Fair Value Disclosure | $ 0 | $ 0 | |
[1] | For more detail about the fair value of the Company’s MBS, see Note 3 and Note 4. |
FINANCIAL INSTRUMENTS (Details
FINANCIAL INSTRUMENTS (Details 1) - Measurement Input, Constant Prepayment Rate [Member] | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fair Value Inputs Prepayment Rates | 12.00% | 12.00% |
Minimum [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fair Value Inputs Prepayment Rates | 8.00% | 6.50% |
Maximum [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fair Value Inputs Prepayment Rates | 26.50% | 28.60% |
Weighted Average [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fair Value Inputs Prepayment Rates | 13.70% | 13.30% |
Fair Value Inputs Discount Rate 1 | 12.00% | 12.00% |
FINANCIAL INSTRUMENTS (Detail_2
FINANCIAL INSTRUMENTS (Details Textual) - USD ($) | Dec. 31, 2016 | Dec. 31, 2015 |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Assets, Fair Value Disclosure | $ 2,249,305,912 | $ 2,453,252,486 |
Fair Value, Inputs, Level 3 [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Assets, Fair Value Disclosure | $ 3,440,809 | $ 4,268,673 |
RELATED PARTY TRANSACTIONS (Det
RELATED PARTY TRANSACTIONS (Details) - Employee Stock Option [Member] - $ / shares | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Related Party Transaction [Line Items] | ||
Shares, Outstanding Unvested Shares at Beginning of Period | 15,500 | 23,500 |
Shares, Granted | 4,500 | 6,000 |
Shares, Vested | (15,500) | (14,000) |
Shares, Outstanding Unvested Shares at End of Period | 4,500 | 15,500 |
Weighted Average Grant Date Fair Market Value, Outstanding Unvested Shares at Beginning of Period | $ 12.79 | $ 13.88 |
Weighted Average Grant Date Fair Market Value, Granted | 5.97 | 10.07 |
Weighted Average Grant Date Fair Market Value, Vested | 12.79 | 13.46 |
Weighted Average Grant Date Fair Market Value, Outstanding Unvested Shares at End of Period | $ 5.97 | $ 12.79 |
RELATED PARTY TRANSACTIONS (D_2
RELATED PARTY TRANSACTIONS (Details Textual) - USD ($) | 1 Months Ended | 12 Months Ended | |||
Mar. 27, 2016 | Mar. 27, 2013 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Related Party Transaction [Line Items] | |||||
Management Fee Percentage | 1.50% | ||||
Management fee | $ 2,472,353 | $ 2,774,432 | $ 2,627,592 | ||
Management Fee Payable | 400,000 | 225,000 | |||
Operating expenses reimbursable to Manager | 4,747,275 | 4,980,348 | 3,247,683 | ||
Restricted stock compensation expense | 35,785 | 63,275 | 13,457 | ||
Additional Cost Of Reimbursable Expense Waived | $ 480,000 | 592,903 | |||
Management Expiration Date | May 16, 2014 | ||||
MAXEX LLC [Member] | Residential Mortgage Loans [Member] | |||||
Related Party Transaction [Line Items] | |||||
Proceeds from Sale and Collection of Loans Held-for-sale | $ 22,500,000 | ||||
MAXEX LLC [Member] | Loan Review Services [Member] | |||||
Related Party Transaction [Line Items] | |||||
Proceeds from Fees Received | 209,088 | ||||
Payments for Other Fees | 44,354 | ||||
Fulfillment and Securitization Fees [Member] | |||||
Related Party Transaction [Line Items] | |||||
Management Fee Payable | 0 | 25,000 | 272,000 | ||
Management Fee Accrued | $ 0 | 200,000 | 1,017,627 | ||
Restricted Stock Units (Rsus) [Member] | |||||
Related Party Transaction [Line Items] | |||||
Proceeds from Issuance of Shares under Incentive and Share-based Compensation Plans, Excluding Stock Options | $ 49,875 | ||||
Manager Equity Plan [Member] | |||||
Related Party Transaction [Line Items] | |||||
Percentage Of Shares Issued | 3.00% | ||||
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Vested in Period | 9,500 | ||||
Manager Equity Plan [Member] | Restricted Stock Units (Rsus) [Member] | |||||
Related Party Transaction [Line Items] | |||||
Employee Service Share-based Compensation, Nonvested Awards, Total Compensation Cost Not yet Recognized, Share-based Awards Other than Options | $ 16,634 | $ 46,405 | $ 28,375 | ||
Employee Service Share-based Compensation, Nonvested Awards, Total Compensation Cost Not yet Recognized, Period for Recognition | 7 months 12 days | ||||
Manager Equity Plan [Member] | Independent Director One [Member] | Restricted Stock Units (Rsus) [Member] | |||||
Related Party Transaction [Line Items] | |||||
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Grants in Period | 4,500 | 6,000 | 4,500 | ||
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Grants in Period, Weighted Average Grant Date Fair Value | $ 14.50 | $ 5.97 | $ 10.07 | $ 11.27 | |
Manager Equity Plan [Member] | Manager [Member] | Restricted Stock Units (Rsus) [Member] | |||||
Related Party Transaction [Line Items] | |||||
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Grants in Period | 28,500 |
GUARANTEES (Details Textual)
GUARANTEES (Details Textual) | 12 Months Ended |
Dec. 31, 2016USD ($) | |
Guarantor Obligations [Line Items] | |
Guarantor Obligations, Current Carrying Value | $ 469,015,145 |
Guarantor Obligations, Liquidation Proceeds, Percentage | 0.10% |
Guarantor Obligations, Liquidation Proceeds, Monetary Amount | $ 5,000,000 |
STOCKHOLDERS' EQUITY (Details)
STOCKHOLDERS' EQUITY (Details) | 12 Months Ended | |
Dec. 31, 2016USD ($)$ / sharesshares | ||
Equity, Class of Treasury Stock [Line Items] | ||
Total Number of Shares Repurchased | shares | 126,856 | |
Weighted Average Price Paid per Share | $ / shares | $ 5.09 | |
January 2016 Purchase [Member] | ||
Equity, Class of Treasury Stock [Line Items] | ||
Total Number of Shares Repurchased | shares | 58,500 | |
Weighted Average Price Paid per Share | $ / shares | $ 4.87 | [1] |
Total Cost of Shares Repurchased | $ | $ 284,885 | |
[1] | Average price paid per share includes transaction costs |
STOCKHOLDERS' EQUITY (Details 1
STOCKHOLDERS' EQUITY (Details 1) - USD ($) | 12 Months Ended | ||||
Dec. 31, 2016 | Dec. 31, 2015 | [1] | Dec. 31, 2014 | ||
Dividends [Line Items] | |||||
Dividend Amount | $ 39,132 | [1] | $ 39,132 | $ 39,132 | |
Common Stock [Member] | |||||
Dividends [Line Items] | |||||
Dividend Amount | $ 29,898,918 | ||||
Cash Dividend Per Share (in dollars per share) | $ 2.04 | ||||
Distribution One [Member] | Common Stock [Member] | |||||
Dividends [Line Items] | |||||
Declaration Date | Dec. 16, 2015 | ||||
Record Date | Jan. 15, 2016 | ||||
Payment Date | Jan. 28, 2016 | ||||
Dividend Amount | $ 878,274 | ||||
Cash Dividend Per Share (in dollars per share) | $ 0.05998 | ||||
Distribution One [Member] | Series A Preferred Stock [Member] | |||||
Dividends [Line Items] | |||||
Declaration Date | Dec. 16, 2015 | ||||
Record Date | Jan. 15, 2016 | ||||
Payment Date | Jan. 27, 2016 | ||||
Dividend Amount | $ 293,503 | ||||
Cash Dividend Per Share (in dollars per share) | $ 0.18230 | ||||
Distribution Two [Member] | Common Stock [Member] | |||||
Dividends [Line Items] | |||||
Declaration Date | Dec. 16, 2015 | ||||
Record Date | Feb. 16, 2016 | ||||
Payment Date | Feb. 26, 2016 | ||||
Dividend Amount | $ 875,874 | ||||
Cash Dividend Per Share (in dollars per share) | $ 0.05982 | ||||
Distribution Two [Member] | Series A Preferred Stock [Member] | |||||
Dividends [Line Items] | |||||
Declaration Date | Dec. 16, 2015 | ||||
Record Date | Feb. 16, 2016 | ||||
Payment Date | Feb. 26, 2016 | ||||
Dividend Amount | $ 293,503 | ||||
Cash Dividend Per Share (in dollars per share) | $ 0.18230 | ||||
Distribution Three [Member] | Common Stock [Member] | |||||
Dividends [Line Items] | |||||
Declaration Date | Dec. 16, 2015 | ||||
Record Date | Mar. 15, 2016 | ||||
Payment Date | Mar. 30, 2016 | ||||
Dividend Amount | $ 875,873 | ||||
Cash Dividend Per Share (in dollars per share) | $ 0.05982 | ||||
Distribution Three [Member] | Series A Preferred Stock [Member] | |||||
Dividends [Line Items] | |||||
Declaration Date | Dec. 16, 2015 | ||||
Record Date | Mar. 15, 2016 | ||||
Payment Date | Mar. 28, 2016 | ||||
Dividend Amount | $ 293,503 | ||||
Cash Dividend Per Share (in dollars per share) | $ 0.18230 | ||||
Distribution Four [Member] | Common Stock [Member] | |||||
Dividends [Line Items] | |||||
Declaration Date | Mar. 16, 2016 | ||||
Record Date | Apr. 15, 2016 | ||||
Payment Date | Apr. 28, 2016 | ||||
Dividend Amount | $ 875,874 | ||||
Cash Dividend Per Share (in dollars per share) | $ 0.05982 | ||||
Distribution Four [Member] | Series A Preferred Stock [Member] | |||||
Dividends [Line Items] | |||||
Declaration Date | Mar. 16, 2016 | ||||
Record Date | Apr. 15, 2016 | ||||
Payment Date | Apr. 27, 2016 | ||||
Dividend Amount | $ 293,503 | ||||
Cash Dividend Per Share (in dollars per share) | $ 0.18230 | ||||
Distribution Five [Member] | Common Stock [Member] | |||||
Dividends [Line Items] | |||||
Declaration Date | Mar. 16, 2016 | ||||
Record Date | May 16, 2016 | ||||
Payment Date | May 27, 2016 | ||||
Dividend Amount | $ 875,873 | ||||
Cash Dividend Per Share (in dollars per share) | $ 0.05982 | ||||
Distribution Five [Member] | Series A Preferred Stock [Member] | |||||
Dividends [Line Items] | |||||
Declaration Date | Mar. 16, 2016 | ||||
Record Date | May 16, 2016 | ||||
Payment Date | May 27, 2016 | ||||
Dividend Amount | $ 293,503 | ||||
Cash Dividend Per Share (in dollars per share) | $ 0.18230 | ||||
Distribution Six [Member] | Common Stock [Member] | |||||
Dividends [Line Items] | |||||
Declaration Date | Mar. 16, 2016 | ||||
Record Date | Jun. 15, 2016 | ||||
Payment Date | Jun. 29, 2016 | ||||
Dividend Amount | $ 875,874 | ||||
Cash Dividend Per Share (in dollars per share) | $ 0.05982 | ||||
Distribution Six [Member] | Series A Preferred Stock [Member] | |||||
Dividends [Line Items] | |||||
Declaration Date | Mar. 16, 2016 | ||||
Record Date | Jun. 15, 2016 | ||||
Payment Date | Jun. 27, 2016 | ||||
Dividend Amount | $ 293,503 | ||||
Cash Dividend Per Share (in dollars per share) | $ 0.18230 | ||||
Distribution Seven [Member] | Common Stock [Member] | |||||
Dividends [Line Items] | |||||
Declaration Date | Jun. 15, 2016 | ||||
Record Date | Jul. 15, 2016 | ||||
Payment Date | Jul. 28, 2016 | ||||
Dividend Amount | $ 875,874 | ||||
Cash Dividend Per Share (in dollars per share) | $ 0.05982 | ||||
Distribution Seven [Member] | Series A Preferred Stock [Member] | |||||
Dividends [Line Items] | |||||
Declaration Date | Jun. 15, 2016 | ||||
Record Date | Jul. 15, 2016 | ||||
Payment Date | Jul. 27, 2016 | ||||
Dividend Amount | $ 293,503 | ||||
Cash Dividend Per Share (in dollars per share) | $ 0.18230 | ||||
Distribution Eight [Member] | Common Stock [Member] | |||||
Dividends [Line Items] | |||||
Declaration Date | Jun. 15, 2016 | ||||
Record Date | Aug. 15, 2016 | ||||
Payment Date | Aug. 30, 2016 | ||||
Dividend Amount | $ 876,144 | ||||
Cash Dividend Per Share (in dollars per share) | $ 0.05984 | ||||
Distribution Eight [Member] | Series A Preferred Stock [Member] | |||||
Dividends [Line Items] | |||||
Declaration Date | Jun. 15, 2016 | ||||
Record Date | Aug. 15, 2016 | ||||
Payment Date | Aug. 29, 2016 | ||||
Dividend Amount | $ 293,503 | ||||
Cash Dividend Per Share (in dollars per share) | $ 0.18230 | ||||
Distribution Nine [Member] | Common Stock [Member] | |||||
Dividends [Line Items] | |||||
Declaration Date | Jun. 15, 2016 | ||||
Record Date | Sep. 15, 2016 | ||||
Payment Date | Sep. 29, 2016 | ||||
Dividend Amount | $ 876,144 | ||||
Cash Dividend Per Share (in dollars per share) | $ 0.05984 | ||||
Distribution Nine [Member] | Series A Preferred Stock [Member] | |||||
Dividends [Line Items] | |||||
Declaration Date | Jun. 15, 2016 | ||||
Record Date | Sep. 15, 2016 | ||||
Payment Date | Sep. 27, 2016 | ||||
Dividend Amount | $ 293,503 | ||||
Cash Dividend Per Share (in dollars per share) | $ 0.18230 | ||||
Distribution Ten [Member] | Common Stock [Member] | |||||
Dividends [Line Items] | |||||
Declaration Date | Sep. 16, 2016 | ||||
Record Date | Oct. 17, 2016 | ||||
Payment Date | Oct. 28, 2016 | ||||
Dividend Amount | $ 876,144 | ||||
Cash Dividend Per Share (in dollars per share) | $ 0.05984 | ||||
Distribution Ten [Member] | Series A Preferred Stock [Member] | |||||
Dividends [Line Items] | |||||
Declaration Date | Sep. 16, 2016 | ||||
Record Date | Oct. 17, 2016 | ||||
Payment Date | Oct. 27, 2016 | ||||
Dividend Amount | $ 293,503 | ||||
Cash Dividend Per Share (in dollars per share) | $ 0.18230 | ||||
Distribution Eleven [Member] | Common Stock [Member] | |||||
Dividends [Line Items] | |||||
Declaration Date | Sep. 16, 2016 | ||||
Record Date | Nov. 15, 2016 | ||||
Payment Date | Nov. 29, 2016 | ||||
Dividend Amount | $ 876,144 | ||||
Cash Dividend Per Share (in dollars per share) | $ 0.05984 | ||||
Distribution Eleven [Member] | Series A Preferred Stock [Member] | |||||
Dividends [Line Items] | |||||
Declaration Date | Sep. 16, 2016 | ||||
Record Date | Nov. 15, 2016 | ||||
Payment Date | Nov. 28, 2016 | ||||
Dividend Amount | $ 293,503 | ||||
Cash Dividend Per Share (in dollars per share) | $ 0.18230 | ||||
Distribution Twelve [Member] | Common Stock [Member] | |||||
Dividends [Line Items] | |||||
Declaration Date | Sep. 16, 2016 | ||||
Record Date | Dec. 15, 2016 | ||||
Payment Date | Dec. 29, 2016 | ||||
Dividend Amount | $ 876,144 | ||||
Cash Dividend Per Share (in dollars per share) | $ 0.05984 | ||||
Distribution Twelve [Member] | Series A Preferred Stock [Member] | |||||
Dividends [Line Items] | |||||
Declaration Date | Sep. 16, 2016 | ||||
Record Date | Dec. 15, 2016 | ||||
Payment Date | Dec. 27, 2016 | ||||
Dividend Amount | $ 293,503 | ||||
Cash Dividend Per Share (in dollars per share) | $ 0.18230 | ||||
Distribution Thirteen [Member] | Common Stock [Member] | |||||
Dividends [Line Items] | |||||
Declaration Date | Nov. 9, 2016 | ||||
Record Date | Nov. 21, 2016 | ||||
Payment Date | Dec. 27, 2016 | ||||
Dividend Amount | $ 19,384,684 | ||||
Cash Dividend Per Share (in dollars per share) | $ 1.32394 | ||||
[1] | Our consolidated balance sheets include assets and liabilities of consolidated variable interest entities (“VIE's) as the Company is the primary beneficiary of these VIEs. As of December 31, 2016 and December 31, 2015, assets of consolidated VIEs totaled $1,369,120,941 and $1,868,482,556, respectively, and the liabilities of consolidated VIEs totaled $1,344,404,080 and $1,750,916,265, respectively |
STOCKHOLDERS' EQUITY (Details T
STOCKHOLDERS' EQUITY (Details Textual) - USD ($) | Jul. 14, 2014 | Dec. 27, 2016 | Jun. 19, 2014 | May 27, 2014 | Mar. 07, 2014 | Feb. 19, 2014 | Jan. 24, 2014 | Dec. 23, 2013 | Jul. 25, 2013 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 15, 2015 | ||
Stockholders' Equity Note [Line Items] | ||||||||||||||||
Proceeds from Issuance of Common Stock | $ 15,503,885 | $ 0 | $ 79,263,318 | |||||||||||||
Preferred Stock, Dividend Rate, Percentage | 8.75% | 8.75% | ||||||||||||||
Proceeds from Issuance of Preferred Stock and Preference Stock | $ 0 | $ 0 | 19,096,074 | |||||||||||||
Dividends Payable | $ 39,132 | [1] | $ 39,132 | [1] | 39,132 | |||||||||||
Preferred Stock, Liquidation Preference Per Share | $ 11 | $ 25 | ||||||||||||||
Common Stock, Par or Stated Value Per Share | $ 0.01 | $ 0.01 | ||||||||||||||
Common Stock, Shares Authorized | 450,000,000 | 450,000,000 | ||||||||||||||
Common Stock, Shares, Issued | 17,539,258 | 14,656,394 | ||||||||||||||
Common Stock, Shares, Outstanding | 17,539,258 | 14,656,394 | ||||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Exercises in Period | 525,000 | |||||||||||||||
Preferred Stock, Par or Stated Value Per Share | $ 0.01 | $ 0.01 | ||||||||||||||
Preferred Stock, Shares Authorized | 50,000,000 | 50,000,000 | ||||||||||||||
Preferred Stock, Shares Issued | 1,610,000 | 1,610,000 | ||||||||||||||
Preferred Stock, Shares Outstanding | 1,610,000 | 1,610,000 | ||||||||||||||
Proceeds from Stock Options Exercised | $ 5,769,750 | |||||||||||||||
Stock Issued During Period Shares New Issues Two | 690,000 | 800,000 | ||||||||||||||
Stock Issued During Period Value New Issues Two | $ 16,325,373 | $ 18,060,897 | $ 0 | $ 0 | 19,096,074 | |||||||||||
Stock Repurchase Program, Authorized Amount | $ 10,000,000 | |||||||||||||||
Treasury Stock, Shares, Acquired | 126,856 | |||||||||||||||
Treasury Stock Acquired, Average Cost Per Share | $ 5.09 | |||||||||||||||
Stock Repurchase Program, Remaining Authorized Repurchase Amount | $ 9,400,000 | |||||||||||||||
Class of Warrant or Right, Exercise Price of Warrants or Rights | $ 13.11 | |||||||||||||||
Class of Warrant or Right, Number of Securities Called by Warrants or Rights | 3,753,492 | |||||||||||||||
Dividends | $ 19,384,684 | $ 33,420,954 | $ 23,396,699 | $ 21,117,171 | ||||||||||||
Common Stock, Dividends, Per Share, Declared | $ 1.33 | $ 2.04 | $ 1.35 | $ 1.47 | ||||||||||||
Dividend Payment Percentage In Cash | 20.00% | |||||||||||||||
Dividends, Common Stock, Cash | $ 3,878,042 | |||||||||||||||
Dividend Payment Percentage In Stock | 80.00% | |||||||||||||||
Dividends, Common Stock, Stock | $ 15,506,642 | |||||||||||||||
Common Stock Dividends, Shares | 2,936,864 | |||||||||||||||
Shares Issued, Price Per Share | $ 5.28 | |||||||||||||||
Series A Preferred Stock [Member] | ||||||||||||||||
Stockholders' Equity Note [Line Items] | ||||||||||||||||
Preferred Stock, Dividend Rate, Percentage | 8.75% | |||||||||||||||
Proceeds from Issuance of Preferred Stock and Preference Stock | $ 2,778,201 | |||||||||||||||
Preferred Stock, Liquidation Preference Per Share | $ 25 | $ 25 | $ 25 | |||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Gross | 120,000 | |||||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Exercises in Period | 120,000 | |||||||||||||||
Preferred Stock, Par or Stated Value Per Share | $ 0.01 | |||||||||||||||
Common Stock [Member] | ||||||||||||||||
Stockholders' Equity Note [Line Items] | ||||||||||||||||
Stock Issued During Period, Shares, New Issues | 3,500,000 | 3,000,000 | ||||||||||||||
Stock Issued During Period Offer Price New Issues | $ 11 | $ 11.30 | ||||||||||||||
Proceeds from Issuance of Common Stock | $ 38,442,925 | $ 31,927,377 | ||||||||||||||
Dividends Payable | $ 29,898,918 | |||||||||||||||
Dividends Payable, Amount Per Share | $ 2.04 | |||||||||||||||
Stock Issued During Period Shares New Issues Two | 0 | 0 | 0 | |||||||||||||
Stock Issued During Period Value New Issues Two | $ 0 | $ 0 | $ 0 | |||||||||||||
Common Stock [Member] | IPO [Member] | ||||||||||||||||
Stockholders' Equity Note [Line Items] | ||||||||||||||||
Warrants To Purchase Common Stock | 3,125,000 | |||||||||||||||
Common Stock Exercise Price Description | at a per share exercise price equal to 105% of the $15.00 IPO price, or $15.75. | |||||||||||||||
Common Stock [Member] | Underwriters Issuance One [Member] | ||||||||||||||||
Stockholders' Equity Note [Line Items] | ||||||||||||||||
Stock Issued During Period Offer Price New Issues | $ 11.30 | |||||||||||||||
Preferred Stock, Liquidation Preference Per Share | $ 11.30 | |||||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Gross | 450,000 | |||||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Exercises in Period | 300,000 | |||||||||||||||
Proceeds from Stock Options Exercised | $ 3,214,325 | |||||||||||||||
Common Stock [Member] | Underwriters Issuance Two [Member] | ||||||||||||||||
Stockholders' Equity Note [Line Items] | ||||||||||||||||
Stock Issued During Period Offer Price New Issues | $ 11 | |||||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Gross | 525,000 | |||||||||||||||
[1] | Our consolidated balance sheets include assets and liabilities of consolidated variable interest entities (“VIE's) as the Company is the primary beneficiary of these VIEs. As of December 31, 2016 and December 31, 2015, assets of consolidated VIEs totaled $1,369,120,941 and $1,868,482,556, respectively, and the liabilities of consolidated VIEs totaled $1,344,404,080 and $1,750,916,265, respectively |
EARNINGS PER SHARE (as restat_3
EARNINGS PER SHARE (as restated) (Details) - USD ($) | 1 Months Ended | 12 Months Ended | ||
Dec. 27, 2016 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Earnings Per Share, Basic, by Common Class, Including Two Class Method [Line Items] | ||||
Net income (loss) | $ (10,426,645) | $ 450,479 | $ 3,313,786 | |
Less dividends paid: | ||||
Common stock | 29,898,918 | 19,874,663 | 18,229,875 | |
Preferred stock | 3,522,036 | 3,522,036 | 2,887,296 | |
Dividends | $ 19,384,684 | 33,420,954 | 23,396,699 | 21,117,171 |
Undistributed earnings (deficit) | (43,847,599) | (22,946,220) | (17,803,386) | |
Common Stock [Member] | ||||
Less dividends paid: | ||||
Preferred stock | $ 0 | $ 0 | $ 0 | |
Distributed earnings (in dollars per share) | $ 2.04 | $ 1.35 | $ 1.47 | |
Undistributed earnings (deficit) (in dollars per share) | (2.99) | (1.56) | (1.44) | |
Total (in dollars per share) | (0.95) | (0.21) | 0.03 | |
Unvested Share Based Payment Awards [Member] | ||||
Less dividends paid: | ||||
Distributed earnings (in dollars per share) | 2.04 | 1.35 | 1.47 | |
Undistributed earnings (deficit) (in dollars per share) | (2.99) | (1.56) | (1.44) | |
Total (in dollars per share) | $ (0.95) | $ (0.21) | $ 0.03 |
INCOME TAXES (as restated) (Det
INCOME TAXES (as restated) (Details) - USD ($) | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2016 | Sep. 30, 2016 | Jun. 30, 2016 | Mar. 31, 2016 | Dec. 31, 2015 | Sep. 30, 2015 | Jun. 30, 2015 | Mar. 31, 2015 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Income Tax Disclosure [Line Items] | |||||||||||
Net income (loss) | $ 12,470 | $ 1,851 | $ (7,800) | $ (16,948) | $ 3,479 | $ (1,699) | $ 3,801 | $ (5,130) | $ (10,426,645) | $ 450,479 | $ 3,313,786 |
Capitalized transaction fees | (41,000) | (41,000) | 596,000 | ||||||||
Unrealized gain (loss) | 1,964,000 | 2,041,000 | (3,670,000) | ||||||||
Deferred income | 204,000 | 0 | 0 | ||||||||
Tax income (loss) of taxable subsidiary before utilization of net operating losses | 791,000 | 624,000 | (3,411,000) | ||||||||
Utilizations of net operating losses | (791,000) | (624,000) | 0 | ||||||||
Net tax income of taxable subsidiaries | 0 | 0 | 0 | ||||||||
REIT Operation [Member] | |||||||||||
Income Tax Disclosure [Line Items] | |||||||||||
Net income (loss) | 9,090,000 | (1,826,000) | (3,650,000) | ||||||||
Five Oaks Investment Corp [Member] | |||||||||||
Income Tax Disclosure [Line Items] | |||||||||||
Net income (loss) | (10,426,000) | 450,000 | 3,313,000 | ||||||||
Subsidiaries [Member] | |||||||||||
Income Tax Disclosure [Line Items] | |||||||||||
Net income (loss) | $ (1,336,000) | $ (1,376,000) | $ (337,000) |
INCOME TAXES (as restated) (D_2
INCOME TAXES (as restated) (Details 1) - USD ($) $ in Thousands | Dec. 31, 2016 | Dec. 31, 2015 |
Non-current Deferred Tax Asset (Liability) | ||
Accumulated net operating losses of TRS | $ 758 | $ 1,058 |
Unrealized gain (loss) | 127 | (618) |
Capitalized transaction costs | 196 | 210 |
Deferred income | 77 | 0 |
AMT Credit | 12 | 9 |
Deferred tax asset | 1,170 | 659 |
Valuation allowance | (1,170) | (659) |
Net non-current deferred tax asset (liability) | $ 0 | $ 0 |
INCOME TAXES (as restated) (D_3
INCOME TAXES (as restated) (Details Textual) - USD ($) | 3 Months Ended | 12 Months Ended | |||||||
Dec. 31, 2016 | Sep. 30, 2016 | Jun. 30, 2016 | Mar. 31, 2016 | Dec. 31, 2015 | Sep. 30, 2015 | Jun. 30, 2015 | Mar. 31, 2015 | Dec. 31, 2016 | |
Income Tax Disclosure [Line Items] | |||||||||
Operating Loss Carryforwards | $ 2,000,000 | $ 2,800,000 | $ 2,000,000 | ||||||
Valuation Allowance, Percent | 100.00% | ||||||||
Valuation Allowance, Deferred Tax Asset, Increase (Decrease), Amount | $ 511,000 | ||||||||
Interest Expense | $ 16,259 | $ 16,580 | $ 17,837 | $ 18,857 | $ 19,801 | $ 20,301 | $ 21,062 | $ 21,940 | $ 1,860,000 |
SUBSEQUENT EVENT (Details Textu
SUBSEQUENT EVENT (Details Textual) - USD ($) | Mar. 08, 2017 | Dec. 31, 2016 | Sep. 30, 2016 | Jun. 30, 2016 | Mar. 31, 2016 | Dec. 31, 2015 | Sep. 30, 2015 | Jun. 30, 2015 | Mar. 31, 2015 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 |
Subsequent Event [Line Items] | ||||||||||||
Interest Paid, Excluding Capitalized Interest, Operating Activities | $ 6,355,591 | $ 8,554,565 | $ 4,363,706 | |||||||||
Interest Expense | $ 16,259 | $ 16,580 | $ 17,837 | $ 18,857 | $ 19,801 | $ 20,301 | $ 21,062 | $ 21,940 | $ 1,860,000 | |||
Subsequent Event [Member] | ||||||||||||
Subsequent Event [Line Items] | ||||||||||||
Interest Paid, Excluding Capitalized Interest, Operating Activities | $ 2,010,000 | |||||||||||
Interest Expense | $ 150,000 |
RESTATEMENT OF PREVIOUSLY ISS_3
RESTATEMENT OF PREVIOUSLY ISSUED FINANCIAL STATEMENTS (Details) - USD ($) | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |||
ASSETS | |||||||
Available-for-sale securities, at fair value (includes pledged securities of $876,121,505 for December 31, 2016 | [1] | $ 870,929,601 | $ 571,466,581 | ||||
Mortgage loans held-for-sale, at fair value | [1] | 2,849,536 | 10,900,402 | ||||
Multi-family loans held in securitization trusts, at fair value | [1] | 1,222,905,433 | 1,449,774,383 | ||||
Residential loans held in securitization trusts, at fair value | [1] | 141,126,720 | 411,881,097 | ||||
Mortgage servicing rights, at fair value | [1] | 3,440,809 | 4,268,673 | ||||
Cash and cash equivalents | 27,534,374 | [1] | 26,140,718 | [1] | $ 32,274,285 | $ 33,062,931 | |
Restricted cash | [1] | 10,355,222 | 8,174,638 | ||||
Deferred offering costs | [1] | 96,489 | 0 | ||||
Accrued interest receivable | [1] | 7,619,717 | 8,650,986 | ||||
Dividends receivable | [1] | 122 | 26,022 | ||||
Investment related receivable | [1] | 3,914,458 | 1,591,343 | ||||
Derivative assets, at fair value | [1] | 8,053,813 | 2,558,350 | ||||
Other assets | [1] | 774,909 | 530,468 | ||||
Total assets | [1] | 2,299,601,203 | 2,498,366,661 | ||||
Repurchase agreements: | |||||||
Available-for-sale securities | [1] | 804,811,000 | 509,231,000 | ||||
Multi-family securitized debt obligations | [1] | 1,204,583,678 | 1,364,077,012 | ||||
Residential securitized debt obligations | [1] | 134,846,348 | 380,638,423 | ||||
Accrued interest payable | [1] | 5,467,916 | 6,574,699 | ||||
Dividends payable | 39,132 | [1] | 39,132 | [1] | 39,132 | ||
Deferred income | [1] | 203,743 | 0 | ||||
Due to broker | [1] | 4,244,678 | 0 | ||||
Fees and expenses payable to Manager | [1] | 880,000 | 842,903 | ||||
Other accounts payable and accrued expenses | [1] | 2,057,843 | 267,507 | ||||
Total liabilities | [1] | 2,157,134,338 | 2,320,872,133 | ||||
STOCKHOLDERS' EQUITY: | |||||||
Preferred Stock: par value $0.01 per share; 50,000,000 shares authorized, 8.75% Series A cumulative redeemable, $25 liquidation preference, 1,610,000 issued and outstanding at December 31, 2016 | [1] | 37,156,972 | 37,156,972 | ||||
Common Stock: par value $0.01 per share; 450,000,000 shares authorized, 17,539,258 shares issued and outstanding, at December 31, 2016 | [1] | 175,348 | 146,409 | ||||
Additional paid-in capital | [1] | 204,264,868 | 189,037,702 | ||||
Accumulated other comprehensive income (loss) | [1] | (6,831,940) | (395,771) | ||||
Cumulative distributions to stockholders | [1] | (89,224,194) | (55,803,240) | ||||
Accumulated earnings (deficit) | [1] | (3,074,189) | 7,352,456 | ||||
Total stockholders' equity | 142,466,865 | [1] | 177,494,528 | [1] | $ 212,798,130 | $ 113,925,362 | |
Total liabilities and stockholders' equity | [1] | 2,299,601,203 | 2,498,366,661 | ||||
As previously reported | |||||||
ASSETS | |||||||
Available-for-sale securities, at fair value (includes pledged securities of $876,121,505 for December 31, 2016 | 870,929,601 | ||||||
Mortgage loans held-for-sale, at fair value | 2,849,536 | ||||||
Multi-family loans held in securitization trusts, at fair value | 1,222,905,433 | ||||||
Residential loans held in securitization trusts, at fair value | 141,126,720 | ||||||
Mortgage servicing rights, at fair value | 3,440,809 | ||||||
Cash and cash equivalents | 27,534,374 | 26,140,718 | |||||
Restricted cash | 10,355,222 | ||||||
Deferred offering costs | 96,489 | ||||||
Accrued interest receivable | 7,619,717 | ||||||
Dividends receivable | 122 | ||||||
Investment related receivable | 3,914,458 | ||||||
Derivative assets, at fair value | 8,053,813 | ||||||
Other assets | 774,909 | ||||||
Total assets | 2,299,601,203 | ||||||
Repurchase agreements: | |||||||
Available-for-sale securities | 804,811,000 | ||||||
Multi-family securitized debt obligations | 1,204,583,678 | ||||||
Residential securitized debt obligations | 134,846,348 | ||||||
Accrued interest payable | 5,467,916 | ||||||
Dividends payable | 39,132 | ||||||
Deferred income | 203,743 | ||||||
Due to broker | 4,244,678 | ||||||
Fees and expenses payable to Manager | 880,000 | ||||||
Other accounts payable and accrued expenses | 2,057,843 | ||||||
Total liabilities | 2,157,134,338 | ||||||
STOCKHOLDERS' EQUITY: | |||||||
Preferred Stock: par value $0.01 per share; 50,000,000 shares authorized, 8.75% Series A cumulative redeemable, $25 liquidation preference, 1,610,000 issued and outstanding at December 31, 2016 | 37,156,972 | ||||||
Common Stock: par value $0.01 per share; 450,000,000 shares authorized, 17,539,258 shares issued and outstanding, at December 31, 2016 | 175,348 | ||||||
Additional paid-in capital | 204,264,868 | ||||||
Accumulated other comprehensive income (loss) | (9,268,630) | ||||||
Cumulative distributions to stockholders | (89,224,194) | ||||||
Accumulated earnings (deficit) | (637,499) | ||||||
Total stockholders' equity | 142,466,865 | ||||||
Total liabilities and stockholders' equity | 2,299,601,203 | ||||||
Restatement adjustments | |||||||
ASSETS | |||||||
Available-for-sale securities, at fair value (includes pledged securities of $876,121,505 for December 31, 2016 | 0 | ||||||
Mortgage loans held-for-sale, at fair value | 0 | ||||||
Multi-family loans held in securitization trusts, at fair value | 0 | ||||||
Residential loans held in securitization trusts, at fair value | 0 | ||||||
Mortgage servicing rights, at fair value | 0 | ||||||
Cash and cash equivalents | 0 | $ 0 | |||||
Restricted cash | 0 | ||||||
Deferred offering costs | 0 | ||||||
Accrued interest receivable | 0 | ||||||
Dividends receivable | 0 | ||||||
Investment related receivable | 0 | ||||||
Derivative assets, at fair value | 0 | ||||||
Other assets | 0 | ||||||
Total assets | 0 | ||||||
Repurchase agreements: | |||||||
Available-for-sale securities | 0 | ||||||
Multi-family securitized debt obligations | 0 | ||||||
Residential securitized debt obligations | 0 | ||||||
Accrued interest payable | 0 | ||||||
Dividends payable | 0 | ||||||
Deferred income | 0 | ||||||
Due to broker | 0 | ||||||
Fees and expenses payable to Manager | 0 | ||||||
Other accounts payable and accrued expenses | 0 | ||||||
Total liabilities | 0 | ||||||
STOCKHOLDERS' EQUITY: | |||||||
Preferred Stock: par value $0.01 per share; 50,000,000 shares authorized, 8.75% Series A cumulative redeemable, $25 liquidation preference, 1,610,000 issued and outstanding at December 31, 2016 | 0 | ||||||
Common Stock: par value $0.01 per share; 450,000,000 shares authorized, 17,539,258 shares issued and outstanding, at December 31, 2016 | 0 | ||||||
Additional paid-in capital | 0 | ||||||
Accumulated other comprehensive income (loss) | 2,436,690 | ||||||
Cumulative distributions to stockholders | 0 | ||||||
Accumulated earnings (deficit) | (2,436,690) | ||||||
Total stockholders' equity | 0 | ||||||
Total liabilities and stockholders' equity | $ 0 | ||||||
[1] | Our consolidated balance sheets include assets and liabilities of consolidated variable interest entities (“VIE's) as the Company is the primary beneficiary of these VIEs. As of December 31, 2016 and December 31, 2015, assets of consolidated VIEs totaled $1,369,120,941 and $1,868,482,556, respectively, and the liabilities of consolidated VIEs totaled $1,344,404,080 and $1,750,916,265, respectively |
RESTATEMENT OF PREVIOUSLY ISS_4
RESTATEMENT OF PREVIOUSLY ISSUED FINANCIAL STATEMENTS (Details) (Parenthetical) - USD ($) | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Available-for-sale Securities Pledged as Collateral (in dollars) | $ 876,121,505 | $ 571,086,035 |
Preferred Stock, Par Value (in dollars per share) | $ 0.01 | $ 0.01 |
Preferred Stock, Shares Authorized | 50,000,000 | 50,000,000 |
Preferred Stock, Dividend Rate, Percentage | 8.75% | 8.75% |
Preferred Stock, Liquidation Preference, Value (in dollars) | $ 25 | $ 25 |
Preferred Stock, Shares Issued | 1,610,000 | 1,610,000 |
Preferred Stock, Shares Outstanding | 1,610,000 | 1,610,000 |
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Common Stock, Shares Authorized | 450,000,000 | 450,000,000 |
Common stock, shares issued | 17,539,258 | 14,656,394 |
Common stock, shares outstanding | 17,539,258 | 14,656,394 |
RESTATEMENT OF PREVIOUSLY ISS_5
RESTATEMENT OF PREVIOUSLY ISSUED FINANCIAL STATEMENTS (Details 1) - USD ($) | 1 Months Ended | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 27, 2016 | Dec. 31, 2016 | Sep. 30, 2016 | Jun. 30, 2016 | Mar. 31, 2016 | Dec. 31, 2015 | Sep. 30, 2015 | Jun. 30, 2015 | Mar. 31, 2015 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Interest income: | ||||||||||||
Available-for-sale securities | $ 23,475,765 | $ 24,298,156 | $ 16,560,338 | |||||||||
Mortgage loans held-for-sale | 430,986 | 2,097,702 | 3,634,264 | |||||||||
Multi-family loans held in securitization trusts | 58,587,780 | 68,016,595 | 21,158,102 | |||||||||
Residential loans held in securitization trusts | 10,585,191 | 19,986,204 | 4,438,634 | |||||||||
Cash and cash equivalents | 41,994 | 16,351 | 21,274 | |||||||||
Interest expense: | ||||||||||||
Repurchase agreements - available-for-sale securities | (6,237,777) | (6,467,312) | (2,661,329) | |||||||||
Repurchase agreements - mortgage loans held-for-sale | (237,807) | (1,323,892) | (2,203,961) | |||||||||
Multi-family securitized debt obligations | (54,940,386) | (62,157,176) | (19,400,851) | |||||||||
Residential securitized debt obligations | (8,117,402) | (13,156,912) | (3,575,168) | |||||||||
Net interest income | $ 5,903 | $ 6,153 | $ 5,772 | $ 5,760 | $ 6,537 | $ 7,100 | $ 8,570 | $ 9,103 | 23,588,344 | 31,309,716 | 17,971,303 | |
Other-than-temporary impairments | ||||||||||||
Increase in credit reserves | 745,492 | (745,492) | 0 | |||||||||
Additional other-than-temporary credit impairment losses | (183,790) | (2,890,939) | 0 | |||||||||
Total impairment losses recognized in earnings | 561,702 | (3,636,431) | 0 | |||||||||
Other income: | ||||||||||||
Realized gain (loss) on sale of investments, net | (7,216,137) | (533,832) | 3,271,592 | |||||||||
Change in unrealized gain (loss) on fair value option securities | (8,406,934) | |||||||||||
Realized gain (loss) on derivative contracts, net | (3,089,001) | (12,024,730) | (18,214,460) | |||||||||
Change in unrealized gain (loss) on derivative contracts, net | 5,495,463 | 4,909,858 | (2,931,249) | |||||||||
Realized gain (loss) on mortgage loans held-for-sale | 94,187 | 1,216,314 | (776,971) | |||||||||
Change in unrealized gain (loss) on mortgage loans held-for-sale | (151,023) | (197,179) | 329,728 | |||||||||
Change in unrealized gain (loss) on mortgage service rights | (827,864) | (671,957) | 0 | |||||||||
Change in unrealized gain (loss) on multi-family loans held in securitization trusts | (5,219,530) | 6,097,000 | 1,473,485 | |||||||||
Change in unrealized gain (loss) on residential loans held in securitization trusts | 404,720 | (8,153,474) | 3,059,647 | |||||||||
Tax interest expense | (1,860,000) | 0 | 0 | |||||||||
Servicing income | 932,424 | 211,878 | 0 | |||||||||
Other income | 32,276 | 85,726 | 59,590 | |||||||||
Total other income (loss) | (19,811,419) | (10,102,045) | (3,122,790) | |||||||||
Expenses: | ||||||||||||
Management fee | 2,472,353 | 2,774,432 | 2,627,592 | |||||||||
General and administrative expenses | 5,867,851 | 6,660,934 | 2,901,076 | |||||||||
Operating expenses reimbursable to Manager | 4,747,275 | |||||||||||
Other operating expenses | 1,480,341 | 2,448,439 | 2,504,741 | |||||||||
Compensation expense | 197,452 | 256,608 | 253,635 | |||||||||
Total expenses | 14,765,272 | 17,120,761 | 11,534,727 | |||||||||
Net income (loss) | 12,470 | 1,851 | (7,800) | (16,948) | 3,479 | (1,699) | 3,801 | (5,130) | (10,426,645) | 450,479 | 3,313,786 | |
Dividends to preferred stockholders | (3,522,036) | (3,522,036) | (2,887,296) | |||||||||
Net income (loss) attributable to common stockholders | 11,580 | 970 | (8,671) | (17,828) | 2,588 | (2,579) | 2,930 | (6,011) | (13,948,681) | (3,071,557) | 426,490 | |
Earnings (loss) per share: | ||||||||||||
Net income attributable to common stockholders (basic and diluted) | $ 11,580 | $ 970 | $ (8,671) | $ (17,828) | $ 2,588 | $ (2,579) | $ 2,930 | $ (6,011) | $ (13,948,681) | $ (3,071,557) | $ 426,490 | |
Weighted average number of shares of common stock outstanding | 14,762,006 | 14,600,193 | 14,597,894 | 14,605,515 | 14,719,632 | 14,724,750 | 14,721,492 | 14,718,750 | 14,641,701 | 14,721,074 | 12,358,587 | |
Basic and diluted income per share | $ 0.78 | $ 0.07 | $ (0.59) | $ (1.22) | $ 0.18 | $ (0.18) | $ 0.20 | $ (0.41) | $ (0.95) | $ (0.21) | $ 0.03 | |
Dividends declared per share of common stock | $ 1.33 | $ 2.04 | $ 1.35 | $ 1.47 | ||||||||
As previously reported | ||||||||||||
Interest income: | ||||||||||||
Available-for-sale securities | $ 23,475,765 | |||||||||||
Mortgage loans held-for-sale | 430,986 | |||||||||||
Multi-family loans held in securitization trusts | 58,587,780 | |||||||||||
Residential loans held in securitization trusts | 10,585,191 | |||||||||||
Cash and cash equivalents | 41,994 | |||||||||||
Interest expense: | ||||||||||||
Repurchase agreements - available-for-sale securities | (6,237,777) | |||||||||||
Repurchase agreements - mortgage loans held-for-sale | (237,807) | |||||||||||
Multi-family securitized debt obligations | (54,940,386) | |||||||||||
Residential securitized debt obligations | (8,117,402) | |||||||||||
Net interest income | 23,588,344 | |||||||||||
Other-than-temporary impairments | ||||||||||||
Increase in credit reserves | (541,342) | |||||||||||
Additional other-than-temporary credit impairment losses | (183,790) | |||||||||||
Total impairment losses recognized in earnings | (725,132) | |||||||||||
Other income: | ||||||||||||
Realized gain (loss) on sale of investments, net | (7,216,137) | |||||||||||
Change in unrealized gain (loss) on fair value option securities | (4,683,410) | |||||||||||
Realized gain (loss) on derivative contracts, net | (3,089,001) | |||||||||||
Change in unrealized gain (loss) on derivative contracts, net | 5,495,463 | |||||||||||
Realized gain (loss) on mortgage loans held-for-sale | 94,187 | |||||||||||
Change in unrealized gain (loss) on mortgage loans held-for-sale | (151,023) | |||||||||||
Change in unrealized gain (loss) on mortgage service rights | (827,864) | |||||||||||
Change in unrealized gain (loss) on multi-family loans held in securitization trusts | (5,219,530) | |||||||||||
Change in unrealized gain (loss) on residential loans held in securitization trusts | 404,720 | |||||||||||
Tax interest expense | (1,860,000) | |||||||||||
Servicing income | 932,424 | |||||||||||
Other income | 32,276 | |||||||||||
Total other income (loss) | (16,087,895) | |||||||||||
Expenses: | ||||||||||||
Management fee | 2,472,353 | |||||||||||
General and administrative expenses | 5,867,851 | |||||||||||
Operating expenses reimbursable to Manager | 4,747,275 | |||||||||||
Other operating expenses | 1,480,341 | |||||||||||
Compensation expense | 197,452 | |||||||||||
Total expenses | 14,765,272 | |||||||||||
Net income (loss) | (7,989,955) | |||||||||||
Dividends to preferred stockholders | (3,522,036) | |||||||||||
Net income (loss) attributable to common stockholders | (11,511,991) | |||||||||||
Earnings (loss) per share: | ||||||||||||
Net income attributable to common stockholders (basic and diluted) | $ (11,511,991) | |||||||||||
Weighted average number of shares of common stock outstanding | 14,641,701 | |||||||||||
Basic and diluted income per share | $ (0.79) | |||||||||||
Dividends declared per share of common stock | $ 2.04 | |||||||||||
Restatement adjustments | ||||||||||||
Interest income: | ||||||||||||
Available-for-sale securities | $ 0 | |||||||||||
Mortgage loans held-for-sale | 0 | |||||||||||
Multi-family loans held in securitization trusts | 0 | |||||||||||
Residential loans held in securitization trusts | 0 | |||||||||||
Cash and cash equivalents | 0 | |||||||||||
Interest expense: | ||||||||||||
Repurchase agreements - available-for-sale securities | 0 | |||||||||||
Repurchase agreements - mortgage loans held-for-sale | 0 | |||||||||||
Multi-family securitized debt obligations | 0 | |||||||||||
Residential securitized debt obligations | 0 | |||||||||||
Net interest income | 0 | |||||||||||
Other-than-temporary impairments | ||||||||||||
Increase in credit reserves | 1,286,834 | |||||||||||
Additional other-than-temporary credit impairment losses | 0 | |||||||||||
Total impairment losses recognized in earnings | 1,286,834 | |||||||||||
Other income: | ||||||||||||
Realized gain (loss) on sale of investments, net | 0 | |||||||||||
Change in unrealized gain (loss) on fair value option securities | (3,723,524) | |||||||||||
Realized gain (loss) on derivative contracts, net | 0 | |||||||||||
Change in unrealized gain (loss) on derivative contracts, net | 0 | |||||||||||
Realized gain (loss) on mortgage loans held-for-sale | 0 | |||||||||||
Change in unrealized gain (loss) on mortgage loans held-for-sale | 0 | |||||||||||
Change in unrealized gain (loss) on mortgage service rights | 0 | |||||||||||
Change in unrealized gain (loss) on multi-family loans held in securitization trusts | 0 | |||||||||||
Change in unrealized gain (loss) on residential loans held in securitization trusts | 0 | |||||||||||
Tax interest expense | 0 | |||||||||||
Servicing income | 0 | |||||||||||
Other income | 0 | |||||||||||
Total other income (loss) | (3,723,524) | |||||||||||
Expenses: | ||||||||||||
Management fee | 0 | |||||||||||
General and administrative expenses | 0 | |||||||||||
Operating expenses reimbursable to Manager | 0 | |||||||||||
Other operating expenses | 0 | |||||||||||
Compensation expense | 0 | |||||||||||
Total expenses | 0 | |||||||||||
Net income (loss) | (2,436,690) | |||||||||||
Dividends to preferred stockholders | 0 | |||||||||||
Net income (loss) attributable to common stockholders | (2,436,690) | |||||||||||
Earnings (loss) per share: | ||||||||||||
Net income attributable to common stockholders (basic and diluted) | $ (2,436,690) | |||||||||||
Weighted average number of shares of common stock outstanding | 14,641,701 | |||||||||||
Basic and diluted income per share | $ (0.17) | |||||||||||
Dividends declared per share of common stock | $ 0 |
RESTATEMENT OF PREVIOUSLY ISS_6
RESTATEMENT OF PREVIOUSLY ISSUED FINANCIAL STATEMENTS (Details 2) - USD ($) | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2016 | Sep. 30, 2016 | Jun. 30, 2016 | Mar. 31, 2016 | Dec. 31, 2015 | Sep. 30, 2015 | Jun. 30, 2015 | Mar. 31, 2015 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Net income | $ 12,470 | $ 1,851 | $ (7,800) | $ (16,948) | $ 3,479 | $ (1,699) | $ 3,801 | $ (5,130) | $ (10,426,645) | $ 450,479 | $ 3,313,786 |
Comprehensive Income (Loss), Net of Tax, Attributable to Parent [Abstract] | |||||||||||
Increase (decrease) in net unrealized gain on available-for-sale securities, net | (100,937) | (14,776,266) | 10,845,303 | ||||||||
Reclassification adjustment for net gain (loss) included in net income | (5,589,740) | 1,969,108 | 7,458,001 | ||||||||
Reclassification adjustment for other-than-temporary impairments included in net income (loss) | (745,492) | 745,492 | 0 | ||||||||
Total other comprehensive income (loss) | (6,436,169) | (7,604,122) | 18,303,304 | ||||||||
Less: Dividends to preferred stockholders | (3,522,036) | (3,522,036) | (2,887,296) | ||||||||
Comprehensive income (loss) attributable to common stockholders | (20,384,850) | $ (10,675,679) | $ 18,729,794 | ||||||||
As previously reported | |||||||||||
Net income | (7,989,955) | ||||||||||
Comprehensive Income (Loss), Net of Tax, Attributable to Parent [Abstract] | |||||||||||
Increase (decrease) in net unrealized gain on available-for-sale securities, net | (3,824,461) | ||||||||||
Reclassification adjustment for net gain (loss) included in net income | (5,589,740) | ||||||||||
Reclassification adjustment for other-than-temporary impairments included in net income (loss) | 541,342 | ||||||||||
Total other comprehensive income (loss) | (8,872,859) | ||||||||||
Less: Dividends to preferred stockholders | (3,522,036) | ||||||||||
Comprehensive income (loss) attributable to common stockholders | (20,384,850) | ||||||||||
Restatement adjustments | |||||||||||
Net income | (2,436,690) | ||||||||||
Comprehensive Income (Loss), Net of Tax, Attributable to Parent [Abstract] | |||||||||||
Increase (decrease) in net unrealized gain on available-for-sale securities, net | 3,723,524 | ||||||||||
Reclassification adjustment for net gain (loss) included in net income | 0 | ||||||||||
Reclassification adjustment for other-than-temporary impairments included in net income (loss) | (1,286,834) | ||||||||||
Total other comprehensive income (loss) | 2,436,690 | ||||||||||
Less: Dividends to preferred stockholders | 0 | ||||||||||
Comprehensive income (loss) attributable to common stockholders | $ 0 |
RESTATEMENT OF PREVIOUSLY ISS_7
RESTATEMENT OF PREVIOUSLY ISSUED FINANCIAL STATEMENTS (Details 3) - USD ($) | 3 Months Ended | 12 Months Ended | ||||||||||||||
Dec. 31, 2016 | Sep. 30, 2016 | Jun. 30, 2016 | Mar. 31, 2016 | Dec. 31, 2015 | Sep. 30, 2015 | Jun. 30, 2015 | Mar. 31, 2015 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | ||||||
Cash flows from operating activities: | ||||||||||||||||
Net income (loss) | $ 12,470 | $ 1,851 | $ (7,800) | $ (16,948) | $ 3,479 | $ (1,699) | $ 3,801 | $ (5,130) | $ (10,426,645) | $ 450,479 | $ 3,313,786 | |||||
Adjustments to reconcile net income (loss) to net cash provided by operating activities: | ||||||||||||||||
Other-than-temporary impairment charges | (561,702) | 3,636,431 | 0 | |||||||||||||
Amortization/accretion of available-for-sale securities premiums and discounts, net | (6,751,667) | (13,210,849) | (4,705,639) | |||||||||||||
Realized (gain) loss on sale of investments, net | 7,216,137 | 533,832 | 3,877,356 | |||||||||||||
Realized (gain) loss on derivative contracts | 3,089,001 | 12,024,730 | 18,214,460 | |||||||||||||
Realized (gain) loss on mortgage loans held-for-sale | (94,187) | (1,216,314) | 776,971 | |||||||||||||
Unrealized (gain) loss on fair value option securities | 8,406,934 | |||||||||||||||
Unrealized (gain) loss on derivative contracts | (5,495,463) | (4,909,858) | 2,931,249 | |||||||||||||
Unrealized (gain) loss on mortgage loans held-for-sale | 151,023 | 197,179 | (329,728) | |||||||||||||
Unrealized (gain) loss on mortgage service rights | 827,864 | 671,957 | 0 | |||||||||||||
Unrealized (gain) loss on multi-family loans held in securitization trusts | 5,219,530 | (6,097,000) | (1,473,485) | |||||||||||||
Unrealized (gain) loss on residential loans held in securitization trusts | (404,720) | 8,153,474 | (3,059,647) | |||||||||||||
Restricted stock compensation expense | 35,785 | 63,275 | 13,457 | |||||||||||||
Net change in: | ||||||||||||||||
Accrued interest receivable | (707,019) | 1,204,188 | (1,874,785) | |||||||||||||
Deferred offering costs | (96,489) | 945,661 | 187,457 | |||||||||||||
Dividends receivable | 25,900 | (26,022) | 0 | |||||||||||||
Other assets | (244,441) | (458,869) | (5,052) | |||||||||||||
Accrued interest payable | 119,993 | (693,848) | 501,584 | |||||||||||||
Deferred income | 203,743 | 0 | 0 | |||||||||||||
Fees and expenses payable to Manager | 37,097 | (219,097) | 732,000 | |||||||||||||
Other accounts payable and accrued expenses | 1,790,336 | (27,522) | (322,485) | |||||||||||||
Net cash provided by operating activities | 2,341,010 | |||||||||||||||
Cash flows from investing activities: | ||||||||||||||||
Purchase of available-for-sale securities | (585,984,081) | (241,590,864) | (521,681,124) | |||||||||||||
Purchase of mortgage loans held-for-sale | (14,772,535) | (502,308,627) | (451,629,615) | |||||||||||||
Proceeds from sales of available-for-sale securities | 263,153,843 | 333,672,932 | 296,246,293 | |||||||||||||
Proceeds from mortgage loans held-for-sale | 22,490,929 | 531,673,280 | 388,053,342 | |||||||||||||
Proceeds from FHLBI stock | 2,403,000 | 0 | 0 | |||||||||||||
Net proceeds from (payments for) derivative contracts | (3,089,001) | (11,940,730) | (17,878,460) | |||||||||||||
Principal payments from available-for-sale securities | 96,655,967 | 70,476,212 | 45,077,314 | |||||||||||||
Principal payments from mortgage loans held-for-sale | 275,636 | 15,432,462 | 8,450,648 | |||||||||||||
Investment related receivable | (2,323,115) | 0 | 506,892 | |||||||||||||
Restricted cash | (2,180,584) | 3,226,007 | 1,942,528 | |||||||||||||
Due to broker | 4,244,678 | 0 | 0 | |||||||||||||
Net cash used in investing activities | (219,125,263) | |||||||||||||||
Cash flows from financing activities: | ||||||||||||||||
Net proceeds from issuance of common stock | 15,503,885 | 0 | 79,263,318 | |||||||||||||
Purchase of treasury stock | (283,565) | (358,991) | 0 | |||||||||||||
Dividends paid on common stock | (29,898,918) | (19,874,663) | (18,229,875) | |||||||||||||
Dividends paid on preferred stock | (3,522,036) | (3,522,036) | (2,890,665) | |||||||||||||
Proceeds from repurchase agreements - available-for-sale securities | 7,940,492,000 | 5,951,792,999 | 4,528,080,286 | |||||||||||||
Proceeds from repurchase agreements - mortgage loans held-for-sale | 16,405,081 | 66,937,322 | 401,295,517 | |||||||||||||
Payments for FHLBI advances | (49,697,000) | (105,800,000) | 0 | |||||||||||||
Principal repayments of repurchase agreements - available-for-sale securities | (7,644,912,000) | (6,136,468,999) | (4,395,638,286) | |||||||||||||
Principal repayments of repurchase agreements - mortgage loans held-for-sale | (25,909,538) | (107,696,717) | (351,031,665) | |||||||||||||
Net cash provided by financing activities | 218,177,909 | |||||||||||||||
Net increase (decrease) in cash and cash equivalents | 1,393,656 | (6,133,567) | (788,646) | |||||||||||||
Cash and cash equivalents, beginning of period | 26,140,718 | [1] | $ 32,274,285 | 26,140,718 | [1] | 32,274,285 | 33,062,931 | |||||||||
Cash and cash equivalents, end of period | 27,534,374 | [1] | 26,140,718 | [1] | 27,534,374 | [1] | 26,140,718 | [1] | 32,274,285 | |||||||
Supplemental disclosure of cash flow information | ||||||||||||||||
Cash paid for interest | 6,355,591 | 8,554,565 | 4,363,706 | |||||||||||||
Non-cash investing and financing activities information | ||||||||||||||||
Dividends declared but not paid at end of period | 39,132 | [1] | 39,132 | [1] | 39,132 | [1] | 39,132 | [1] | 39,132 | |||||||
Net change in unrealized gain (loss) on available-for-sale securities | (6,436,169) | (7,604,122) | 18,303,304 | |||||||||||||
Consolidation of multi-family loans held in securitization trusts | 1,227,523,075 | 1,455,155,339 | 1,677,847,006 | |||||||||||||
Consolidation of residential loans held in securitization trusts | 141,597,866 | 413,327,217 | 507,423,695 | |||||||||||||
Consolidation of multi-family securitized debt obligations | 1,209,181,035 | 1,369,124,789 | 1,676,373,521 | |||||||||||||
Consolidation of residential securitized debt obligations | 135,223,045 | 381,791,476 | $ 433,698,636 | |||||||||||||
As previously reported | ||||||||||||||||
Cash flows from operating activities: | ||||||||||||||||
Net income (loss) | (7,989,955) | |||||||||||||||
Adjustments to reconcile net income (loss) to net cash provided by operating activities: | ||||||||||||||||
Other-than-temporary impairment charges | 725,132 | |||||||||||||||
Amortization/accretion of available-for-sale securities premiums and discounts, net | (6,751,667) | |||||||||||||||
Realized (gain) loss on sale of investments, net | 7,216,137 | |||||||||||||||
Realized (gain) loss on derivative contracts | 3,089,001 | |||||||||||||||
Realized (gain) loss on mortgage loans held-for-sale | (94,187) | |||||||||||||||
Unrealized (gain) loss on fair value option securities | 4,683,410 | |||||||||||||||
Unrealized (gain) loss on derivative contracts | (5,495,463) | |||||||||||||||
Unrealized (gain) loss on mortgage loans held-for-sale | 151,023 | |||||||||||||||
Unrealized (gain) loss on mortgage service rights | 827,864 | |||||||||||||||
Unrealized (gain) loss on multi-family loans held in securitization trusts | 5,219,530 | |||||||||||||||
Unrealized (gain) loss on residential loans held in securitization trusts | (404,720) | |||||||||||||||
Restricted stock compensation expense | 35,785 | |||||||||||||||
Net change in: | ||||||||||||||||
Accrued interest receivable | (707,019) | |||||||||||||||
Deferred offering costs | (96,489) | |||||||||||||||
Dividends receivable | 25,900 | |||||||||||||||
Other assets | (244,441) | |||||||||||||||
Accrued interest payable | 119,993 | |||||||||||||||
Deferred income | 203,743 | |||||||||||||||
Fees and expenses payable to Manager | 37,097 | |||||||||||||||
Other accounts payable and accrued expenses | 1,790,336 | |||||||||||||||
Net cash provided by operating activities | 2,341,010 | |||||||||||||||
Cash flows from investing activities: | ||||||||||||||||
Purchase of available-for-sale securities | (585,984,081) | |||||||||||||||
Purchase of mortgage loans held-for-sale | (14,772,535) | |||||||||||||||
Proceeds from sales of available-for-sale securities | 263,153,843 | |||||||||||||||
Proceeds from mortgage loans held-for-sale | 22,490,929 | |||||||||||||||
Proceeds from FHLBI stock | 2,403,000 | |||||||||||||||
Net proceeds from (payments for) derivative contracts | (3,089,001) | |||||||||||||||
Principal payments from available-for-sale securities | 96,655,967 | |||||||||||||||
Principal payments from mortgage loans held-for-sale | 275,636 | |||||||||||||||
Investment related receivable | (2,323,115) | |||||||||||||||
Restricted cash | (2,180,584) | |||||||||||||||
Due to broker | 4,244,678 | |||||||||||||||
Net cash used in investing activities | (219,125,263) | |||||||||||||||
Cash flows from financing activities: | ||||||||||||||||
Net proceeds from issuance of common stock | 15,503,885 | |||||||||||||||
Purchase of treasury stock | (283,565) | |||||||||||||||
Dividends paid on common stock | (29,898,918) | |||||||||||||||
Dividends paid on preferred stock | (3,522,036) | |||||||||||||||
Proceeds from repurchase agreements - available-for-sale securities | 7,940,492,000 | |||||||||||||||
Proceeds from repurchase agreements - mortgage loans held-for-sale | 16,405,081 | |||||||||||||||
Payments for FHLBI advances | (49,697,000) | |||||||||||||||
Principal repayments of repurchase agreements - available-for-sale securities | (7,644,912,000) | |||||||||||||||
Principal repayments of repurchase agreements - mortgage loans held-for-sale | (25,909,538) | |||||||||||||||
Net cash provided by financing activities | 218,177,909 | |||||||||||||||
Net increase (decrease) in cash and cash equivalents | 1,393,656 | |||||||||||||||
Cash and cash equivalents, beginning of period | 26,140,718 | 26,140,718 | ||||||||||||||
Cash and cash equivalents, end of period | 27,534,374 | 26,140,718 | 27,534,374 | 26,140,718 | ||||||||||||
Supplemental disclosure of cash flow information | ||||||||||||||||
Cash paid for interest | 6,355,591 | |||||||||||||||
Non-cash investing and financing activities information | ||||||||||||||||
Dividends declared but not paid at end of period | 39,132 | 39,132 | ||||||||||||||
Net change in unrealized gain (loss) on available-for-sale securities | (8,872,859) | |||||||||||||||
Consolidation of multi-family loans held in securitization trusts | 1,227,523,075 | |||||||||||||||
Consolidation of residential loans held in securitization trusts | 141,597,866 | |||||||||||||||
Consolidation of multi-family securitized debt obligations | 1,209,181,035 | |||||||||||||||
Consolidation of residential securitized debt obligations | 135,223,045 | |||||||||||||||
Restatement adjustments | ||||||||||||||||
Cash flows from operating activities: | ||||||||||||||||
Net income (loss) | (2,436,690) | |||||||||||||||
Adjustments to reconcile net income (loss) to net cash provided by operating activities: | ||||||||||||||||
Other-than-temporary impairment charges | (1,286,834) | |||||||||||||||
Amortization/accretion of available-for-sale securities premiums and discounts, net | 0 | |||||||||||||||
Realized (gain) loss on sale of investments, net | 0 | |||||||||||||||
Realized (gain) loss on derivative contracts | 0 | |||||||||||||||
Realized (gain) loss on mortgage loans held-for-sale | 0 | |||||||||||||||
Unrealized (gain) loss on fair value option securities | 3,723,524 | |||||||||||||||
Unrealized (gain) loss on derivative contracts | 0 | |||||||||||||||
Unrealized (gain) loss on mortgage loans held-for-sale | 0 | |||||||||||||||
Unrealized (gain) loss on mortgage service rights | 0 | |||||||||||||||
Unrealized (gain) loss on multi-family loans held in securitization trusts | 0 | |||||||||||||||
Unrealized (gain) loss on residential loans held in securitization trusts | 0 | |||||||||||||||
Restricted stock compensation expense | 0 | |||||||||||||||
Net change in: | ||||||||||||||||
Accrued interest receivable | 0 | |||||||||||||||
Deferred offering costs | 0 | |||||||||||||||
Dividends receivable | 0 | |||||||||||||||
Other assets | 0 | |||||||||||||||
Accrued interest payable | 0 | |||||||||||||||
Deferred income | 0 | |||||||||||||||
Fees and expenses payable to Manager | 0 | |||||||||||||||
Other accounts payable and accrued expenses | 0 | |||||||||||||||
Net cash provided by operating activities | 0 | |||||||||||||||
Cash flows from investing activities: | ||||||||||||||||
Purchase of available-for-sale securities | 0 | |||||||||||||||
Purchase of mortgage loans held-for-sale | 0 | |||||||||||||||
Proceeds from sales of available-for-sale securities | 0 | |||||||||||||||
Proceeds from mortgage loans held-for-sale | 0 | |||||||||||||||
Proceeds from FHLBI stock | 0 | |||||||||||||||
Net proceeds from (payments for) derivative contracts | 0 | |||||||||||||||
Principal payments from available-for-sale securities | 0 | |||||||||||||||
Principal payments from mortgage loans held-for-sale | 0 | |||||||||||||||
Investment related receivable | 0 | |||||||||||||||
Restricted cash | 0 | |||||||||||||||
Due to broker | 0 | |||||||||||||||
Net cash used in investing activities | 0 | |||||||||||||||
Cash flows from financing activities: | ||||||||||||||||
Net proceeds from issuance of common stock | 0 | |||||||||||||||
Purchase of treasury stock | 0 | |||||||||||||||
Dividends paid on common stock | 0 | |||||||||||||||
Dividends paid on preferred stock | 0 | |||||||||||||||
Proceeds from repurchase agreements - available-for-sale securities | 0 | |||||||||||||||
Proceeds from repurchase agreements - mortgage loans held-for-sale | 0 | |||||||||||||||
Payments for FHLBI advances | 0 | |||||||||||||||
Principal repayments of repurchase agreements - available-for-sale securities | 0 | |||||||||||||||
Principal repayments of repurchase agreements - mortgage loans held-for-sale | 0 | |||||||||||||||
Net cash provided by financing activities | 0 | |||||||||||||||
Net increase (decrease) in cash and cash equivalents | 0 | |||||||||||||||
Cash and cash equivalents, beginning of period | $ 0 | 0 | ||||||||||||||
Cash and cash equivalents, end of period | 0 | $ 0 | 0 | $ 0 | ||||||||||||
Supplemental disclosure of cash flow information | ||||||||||||||||
Cash paid for interest | 0 | |||||||||||||||
Non-cash investing and financing activities information | ||||||||||||||||
Dividends declared but not paid at end of period | $ 0 | 0 | ||||||||||||||
Net change in unrealized gain (loss) on available-for-sale securities | 2,436,690 | |||||||||||||||
Consolidation of multi-family loans held in securitization trusts | 0 | |||||||||||||||
Consolidation of residential loans held in securitization trusts | 0 | |||||||||||||||
Consolidation of multi-family securitized debt obligations | 0 | |||||||||||||||
Consolidation of residential securitized debt obligations | $ 0 | |||||||||||||||
[1] | Our consolidated balance sheets include assets and liabilities of consolidated variable interest entities (“VIE's) as the Company is the primary beneficiary of these VIEs. As of December 31, 2016 and December 31, 2015, assets of consolidated VIEs totaled $1,369,120,941 and $1,868,482,556, respectively, and the liabilities of consolidated VIEs totaled $1,344,404,080 and $1,750,916,265, respectively |
QUARTERLY FINANCIAL DATA (UNA_3
QUARTERLY FINANCIAL DATA (UNAUDITED) (Details) - USD ($) | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2016 | Sep. 30, 2016 | Jun. 30, 2016 | Mar. 31, 2016 | Dec. 31, 2015 | Sep. 30, 2015 | Jun. 30, 2015 | Mar. 31, 2015 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Total interest income | $ 22,162 | $ 22,733 | $ 23,610 | $ 24,617 | $ 26,338 | $ 27,401 | $ 29,632 | $ 31,043 | $ 16,724,278 | $ 11,087,306 | $ 11,854,700 |
Total interest expense | (16,259) | (16,580) | (17,837) | (18,857) | (19,801) | (20,301) | (21,062) | (21,940) | (1,860,000) | ||
Net interest income | 5,903 | 6,153 | 5,772 | 5,760 | 6,537 | 7,100 | 8,570 | 9,103 | 23,588,344 | 31,309,716 | 17,971,303 |
Other-than-temporary impairment | 933 | (204) | (146) | (21) | 1,016 | (351) | 567 | (4,868) | |||
Other income (loss) | 8,932 | (908) | (9,561) | (18,275) | 1,289 | (4,944) | (1,216) | (5,232) | |||
Total expenses | 3,298 | 3,191 | 3,864 | 4,412 | 5,363 | 3,505 | 4,120 | 4,133 | |||
Net income (loss) | 12,470 | 1,851 | (7,800) | (16,948) | 3,479 | (1,699) | 3,801 | (5,130) | (10,426,645) | 450,479 | 3,313,786 |
Net income (loss) attributable to common shareholders (basic and diluted) | 11,580 | 970 | (8,671) | (17,828) | 2,588 | (2,579) | 2,930 | (6,011) | (13,948,681) | (3,071,557) | 426,490 |
Earnings (loss) per share: | |||||||||||
Net income (loss) attributable to common shareholders (basic and diluted) | $ 11,580 | $ 970 | $ (8,671) | $ (17,828) | $ 2,588 | $ (2,579) | $ 2,930 | $ (6,011) | $ (13,948,681) | $ (3,071,557) | $ 426,490 |
Weighted average number of shares of common stock outstanding: | 14,762,006 | 14,600,193 | 14,597,894 | 14,605,515 | 14,719,632 | 14,724,750 | 14,721,492 | 14,718,750 | 14,641,701 | 14,721,074 | 12,358,587 |
Basic and diluted income (loss) per share | $ 0.78 | $ 0.07 | $ (0.59) | $ (1.22) | $ 0.18 | $ (0.18) | $ 0.20 | $ (0.41) | $ (0.95) | $ (0.21) | $ 0.03 |
Mortgage Loans on Real Estate (
Mortgage Loans on Real Estate (Details) - USD ($) | 12 Months Ended | |||
Dec. 31, 2016 | Dec. 31, 2015 | |||
Face Amount | [1] | $ 2,850,000 | ||
Carrying Amount | $ 2,850,000 | [1] | $ 10,650,566 | |
Residential whole loan One [Member] | ||||
Rate | [1] | 3.625% | ||
Final Maturity Date | [1] | Apr. 1, 2030 | ||
Periodic Payment Terms | [1] | P&I | ||
Face Amount | [1] | $ 558,000 | ||
Carrying Amount | [1] | $ 559,000 | ||
Residential whole loan Two [Member] | ||||
Rate | [1] | 4.375% | ||
Final Maturity Date | [1] | Nov. 1, 2044 | ||
Periodic Payment Terms | [1] | P&I | ||
Face Amount | [1] | $ 502,000 | ||
Carrying Amount | [1] | $ 507,000 | ||
Residential whole loan Three [Member] | ||||
Rate | [1] | 3.75% | ||
Final Maturity Date | [1] | May 1, 2046 | ||
Periodic Payment Terms | [1] | P&I | ||
Face Amount | [1] | $ 509,000 | ||
Carrying Amount | [1] | $ 498,000 | ||
Residential whole loan Four [Member] | ||||
Rate | [1] | 4.375% | ||
Final Maturity Date | [1] | Jun. 1, 2046 | ||
Periodic Payment Terms | [1] | P&I | ||
Face Amount | [1] | $ 585,000 | ||
Carrying Amount | [1] | $ 591,000 | ||
Residential whole loan Five [Member] | ||||
Rate | [1] | 4.125% | ||
Final Maturity Date | [1] | Jul. 1, 2046 | ||
Periodic Payment Terms | [1] | P&I | ||
Face Amount | [1] | $ 696,000 | ||
Carrying Amount | [1] | $ 695,000 | ||
[1] | No loans subject to delinquent principal or interest |
Mortgage Loans on Real Estate_2
Mortgage Loans on Real Estate (Details 1) | 12 Months Ended | |
Dec. 31, 2016USD ($) | ||
Balance at beginning of year | $ 10,650,566 | |
Mortgage loans purchased | 14,650,573 | |
Other | 3,215 | |
Mortgage loans sold | (22,169,409) | |
Amortization | (284,963) | |
Balance at end of period | $ 2,850,000 | [1] |
[1] | No loans subject to delinquent principal or interest |