Document And Entity Information
Document And Entity Information - shares | 3 Months Ended | |
Mar. 31, 2019 | May 10, 2019 | |
Document And Entity Information [Abstract] | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Period End Date | Mar. 31, 2019 | |
Document Fiscal Year Focus | 2019 | |
Document Fiscal Period Focus | Q1 | |
Entity Registrant Name | Hunt Companies Finance Trust, Inc. | |
Entity Central Index Key | 0001547546 | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Accelerated Filer | |
Entity Emerging Growth Company | false | |
Entity Ex Transition Period | false | |
Entity Small Business | true | |
Trading Symbol | HCFT | |
Entity Common Stock, Shares Outstanding | 23,687,664 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) | Mar. 31, 2019 | Dec. 31, 2018 | |
ASSETS | |||
Cash and cash equivalents | $ 13,640,181 | $ 7,882,862 | |
Restricted cash | 52,348,987 | 51,330,950 | |
Commercial mortgage loans held-for-investment, at amortized cost | 585,770,803 | 555,172,891 | |
Receivables held in securitization trusts, at fair value(1) | [1] | 0 | 24,357,335 |
Mortgage servicing rights, at fair value | 3,617,788 | 3,997,786 | |
Deferred offering costs | 104,133 | 126,516 | |
Accrued interest receivable | 2,611,659 | 2,430,790 | |
Investment related receivable | 0 | 33,042,234 | |
Other assets | 1,313,438 | 1,010,671 | |
Total assets | 659,406,989 | 679,352,035 | |
LIABILITIES: | |||
Collateralized loan obligations (net of discount of $2,170,488 and $2,440,674 and deferred financing costs of $3,550,489 and $3,761,410 for March 31, 2019 and December 31, 2018, respectively) | 504,460,023 | 503,978,918 | |
Secured term loan (net of deferred financing costs of $949,456 for March 31, 2019) | 39,300,544 | 0 | |
Multi-family securitized debt obligations | [1] | 0 | 19,231,331 |
Accrued interest payable | 1,017,648 | 1,231,649 | |
Dividends payable | 1,661,844 | 1,465,610 | |
Fees and expenses payable to Manager | 1,046,436 | 1,175,000 | |
Other accounts payable and accrued expenses | 2,649,607 | 2,066,189 | |
Total liabilities | 550,136,102 | 529,148,697 | |
Commitments and contingencies | |||
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, 2018 | 0 | 37,156,972 | |
Common Stock: par value $0.01 per share; 450,000,000 shares authorized, 23,687,664 and 23,687,664 shares issued and outstanding, at March 31, 2019 and December 31, 2018, respectively | 236,832 | 236,832 | |
Additional paid-in capital | 228,194,105 | 231,305,743 | |
Cumulative distributions to stockholders | (116,895,627) | (114,757,019) | |
Accumulated earnings (deficit) | (2,363,923) | (3,838,690) | |
Total stockholders' equity | 109,171,387 | 150,103,838 | |
Noncontrolling interests | 99,500 | 99,500 | |
Total equity | 109,270,887 | 150,203,338 | |
Total liabilities and equity | $ 659,406,989 | 679,352,035 | |
Variable Interest Entities, Assets | 24,357,335 | ||
Variable Interest Entities, Liabilities | $ 19,595,186 | ||
[1] | Our consolidated balance sheets include assets and liabilities of consolidated variable interest entities ("VIEs") as the Company was the primary beneficiary of these VIEs. As of December 31, 2018, assets of consolidated VIEs totaled $24,357,335, and the liabilities of consolidated VIEs totaled $19,595,186 respectively. |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (Parenthetical) - USD ($) | 3 Months Ended | 12 Months Ended |
Mar. 31, 2019 | Dec. 31, 2018 | |
Statement of Financial Position [Abstract] | ||
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 | 0 | 1,610,000 |
Preferred stock, shares outstanding (in shares) | 0 | 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 | 23,687,664 | 23,687,664 |
Common stock, shares, outstanding | 23,687,664 | 23,687,664 |
Collateralized loan obligation, discount | $ 2,170,488 | $ 2,440,674 |
Collateralized loan obligation, deferred financing costs | 3,550,489 | $ 3,761,410 |
Debt issuance costs | $ 949,456 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations - USD ($) | 3 Months Ended | |
Mar. 31, 2019 | Dec. 31, 2018 | |
Interest income: | ||
Available-for-sale securities | $ 0 | $ 7,079,590 |
Commercial mortgage loans held-for-investment | 9,904,188 | 0 |
Multi-family loans held in securitization trusts | 78,361 | 13,227,188 |
Residential loans held in securitization trusts | 0 | 1,147,641 |
Cash and cash equivalents | 0 | 61,042 |
Interest expense: | ||
Repurchase agreements - available-for-sale securities | 0 | (4,951,537) |
Collateralized loan obligations | (5,446,889) | 0 |
Secured term loan | (329,113) | 0 |
Multi-family securitized debt obligations | 0 | (12,526,295) |
Residential securitized debt obligations | 0 | (920,057) |
Net interest income | 4,206,547 | 3,117,572 |
Other income: | ||
Realized gain (loss) on investments, net | (709,439) | (2,848,007) |
Realized gain (loss) on derivative contracts, net | 0 | 2,792,794 |
Change in unrealized gain (loss) on derivative contracts, net | 0 | 12,783,088 |
Change in unrealized gain (loss) on mortgage servicing rights | (379,998) | 57,689 |
Change in unrealized gain (loss) on multi-family loans held in securitization trusts | 694,339 | (1,355,774) |
Change in unrealized gain (loss) on residential loans held in securitization trusts | 0 | (255,403) |
Servicing income | 248,214 | 219,978 |
Other income | 0 | 15,875 |
Total other income (loss) | (146,884) | 11,410,240 |
Expenses: | ||
Management fee | 553,459 | 576,135 |
General and administrative expenses | 1,466,685 | 1,390,061 |
Operating expenses reimbursable to manager | 540,037 | 746,092 |
Other operating expenses | 37,757 | 404,469 |
Compensation expense | 50,023 | 96,055 |
Total expenses | 2,647,961 | 3,212,812 |
Net income (loss) before provision for income taxes | 1,411,702 | 11,315,000 |
(Provision for) income taxes | 63,065 | 0 |
Net income (loss) | 1,474,767 | 11,315,000 |
Dividends to preferred stockholders | (480,472) | (880,509) |
Deemed dividend on preferred stock related to redemption | (3,093,028) | 0 |
Net income (loss) attributable to common stockholders (basic and diluted) | (2,098,733) | 10,434,491 |
Earnings (loss) per share: | ||
Net income (loss) attributable to common stockholders (basic and diluted) | $ (2,098,733) | $ 10,434,491 |
Weighted average number of shares of common stock outstanding (in shares) | 23,687,664 | 23,392,387 |
Basic and diluted income (loss) per share (in dollars per share) | $ (0.09) | $ 0.45 |
Dividends declared per share of common stock (in dollars per share) | $ 0.07 | $ 0.10 |
Condensed Consolidated Statem_2
Condensed Consolidated Statements of Comprehensive Income (Loss) - USD ($) | 3 Months Ended | |
Mar. 31, 2019 | Dec. 31, 2017 | |
Statement of Comprehensive Income [Abstract] | ||
Net income (loss) | $ 1,474,767 | $ 11,315,000 |
Other comprehensive income (loss): | ||
Increase (decrease) in unrealized gain (loss) on available-for-sale securities, net | 0 | (12,154,936) |
Reclassification adjustment for net gain (loss) included in net income (loss) | 0 | 1,289,589 |
Total other comprehensive income (loss) | 0 | (10,865,347) |
Less: Dividends to preferred stockholders | (480,472) | (880,509) |
Less: Deemed dividend on preferred stock related to redemption | (3,093,028) | |
Comprehensive income (loss) attributable to common stockholders | $ (2,098,733) | $ (430,856) |
Condensed Consolidated Statem_3
Condensed Consolidated Statement of Stockholders' Equity - 3 months ended Mar. 31, 2019 - USD ($) | Total | Preferred Stock | Common Stock | Additional Paid-in Capital | Cumulative Distributions to Stockholders | Accumulated Earnings (Deficit) | Noncontrolling interests |
Balance (in shares) at Dec. 31, 2018 | 1,610,000 | 23,687,664 | |||||
Balance at Dec. 31, 2018 | $ 150,203,338 | $ 37,156,972 | $ 236,832 | $ 231,305,743 | $ (114,757,019) | $ (3,838,690) | $ 99,500 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Cost of issuing common stock | (22,383) | (22,383) | |||||
Redemption of preferred stock, net (in shares) | (1,610,000) | ||||||
Redemption of preferred stock, net | (40,250,000) | $ (37,156,972) | (3,093,028) | 0 | |||
Restricted stock compensation expense | 3,773 | 3,773 | |||||
Net income (loss) | 1,474,767 | 1,474,767 | |||||
Common dividends declared | (1,658,136) | (1,658,136) | |||||
Preferred dividends declared | (480,472) | (480,472) | |||||
Balance (in shares) at Mar. 31, 2019 | 0 | 23,687,664 | |||||
Balance at Mar. 31, 2019 | $ 109,270,887 | $ 0 | $ 236,832 | $ 228,194,105 | $ (116,895,627) | $ (2,363,923) | $ 99,500 |
Condensed Consolidated Statem_4
Condensed Consolidated Statements of Cash Flows - USD ($) | 3 Months Ended | 12 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | Dec. 31, 2017 | |
Cash flows from operating activities: | |||
Net income (loss) | $ 1,474,767 | $ 11,315,000 | |
Adjustments to reconcile net income (loss) to net cash provided by operating activities: | |||
Amortization/accretion of available-for-sale securities premiums and discounts, net | 0 | 1,243,752 | |
Amortization of collateralized loan obligations discounts, net | 270,184 | 0 | |
Amortization Of Offering Costs | (22,383) | 0 | |
Amortization of deferred financing costs | 232,009 | 0 | |
Realized (gain) loss on investments, net | 709,439 | 2,848,007 | |
Realized (gain) loss on derivative contracts, net | 0 | (2,792,794) | |
Unrealized (gain) loss on derivative contracts | 0 | (12,783,088) | |
Unrealized (gain) loss on mortgage servicing rights | 379,998 | (57,689) | |
Unrealized (gain) loss on multi-family loans held in securitization trusts | (694,339) | 1,355,774 | |
Unrealized (gain) loss on residential loans held in securitization trusts | 0 | 255,403 | |
Restricted stock compensation expense | 3,773 | 4,804 | |
Net change in: | |||
Accrued interest receivable | (180,869) | 100,083 | |
Deferred offering costs | 22,383 | (7,617) | |
Other assets | (302,767) | 143,759 | |
Accrued interest payable | 149,854 | (291,435) | |
Deferred income | 0 | 51,450 | |
Fees and expenses payable to Manager | (128,564) | 567,711 | |
Other accounts payable and accrued expenses | 583,418 | (63,221) | |
Net cash provided by operating activities | 2,496,903 | 1,889,899 | |
Cash flows from investing activities: | |||
Purchase of commercial mortgage loans held-for-investment | (64,612,349) | 0 | |
Proceeds from sales of available-for-sale securities | 0 | 144,210,537 | |
Net proceeds from derivative contracts | 0 | 2,792,794 | |
Principal payments from available-for-sale securities | 0 | 36,468,741 | |
Principal Payments From Retained Beneficial Interests | 4,747,049 | 0 | |
Principal payments from commercial mortgage loans held-for-investment | 34,014,437 | 0 | |
Investment related receivable | 33,042,234 | (136,340,151) | |
Due from broker | 0 | 12,617,662 | |
Net cash provided by investing activities | 7,191,371 | 59,749,583 | |
Cash flows from financing activities: | |||
Proceeds from (costs for) issuance of common stock | 0 | 7,310,584 | |
Redemption of preferred stock | (40,250,000) | 0 | |
Dividends paid on common stock | (1,421,259) | (2,314,686) | |
Dividends paid on preferred stock | (521,114) | (880,509) | |
Proceeds from repurchase agreements - available-for-sale securities | 0 | 4,064,474,000 | |
Proceeds from secured term loan | 40,250,000 | 0 | |
Payment of deferred financing costs | (970,545) | 0 | |
Principal repayments of repurchase agreements - available-for-sale securities | 0 | (4,121,936,000) | |
Net cash (used in) financing activities | (2,912,918) | (53,346,611) | |
Net increase in cash, cash equivalents and restricted cash | 6,775,356 | 8,292,871 | |
Cash, cash equivalents and restricted cash, beginning of period | 59,213,812 | 45,622,602 | |
Cash, cash equivalents and restricted cash, end of period | 65,989,168 | 53,915,473 | $ 45,622,602 |
Supplemental disclosure of cash flow information | |||
Cash paid for interest | 4,965,785 | 5,242,972 | |
Non-cash investing and financing activities information | |||
Dividends declared but not paid at end of period | 1,661,844 | 39,132 | |
Net change in unrealized gain (loss) on available-for-sale securities | 0 | $ (10,865,347) | |
Consolidation of multi-family loans held in securitization trusts | 0 | 1,111,092,392 | |
Consolidation of residential loans held in securitization trusts | 0 | 112,140,311 | |
Consolidation of multi-family securitized debt obligations | 0 | 1,090,753,067 | |
Consolidation of residential securitized debt obligations | $ 0 | $ 106,981,993 |
ORGANIZATION AND BUSINESS OPERA
ORGANIZATION AND BUSINESS OPERATIONS | 3 Months Ended |
Mar. 31, 2019 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
ORGANIZATION AND BUSINESS OPERATIONS | ORGANIZATION AND BUSINESS OPERATIONS Hunt Companies Finance Trust, Inc. (the "Company"), is a Maryland corporation that focuses primarily on investing in, financing and managing transitional multi-family and other commercial real estate loans. The Company is externally managed by Hunt Investment Management, LLC (the "Manager"), an affiliate of Hunt Companies, Inc. ("Hunt"). The Company's common stock is listed on the NYSE under the symbol "HCFT." 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 is focused primarily on investing in transitional multifamily and other commercial real estate loans, which are floating rate first mortgage whole loans secured by multifamily and other commercial real estate properties that are not guaranteed by a U.S. government-sponsored entity. 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 and certain other loan-related activities. The Company consolidates this subsidiary under generally accepted accounting principles in the United States of America ("GAAP"). In September 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 was the primary beneficiary, and accordingly consolidated the assets, liabilities, income and expenses 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 previously consolidated the assets, liabilities, income and expenses of the newly established trusts, in each case based upon the Company’s purchase of first-loss securities of the Re-REMIC transactions. During the second quarter of 2018, the Company sold the first-loss tranche of the Re-REMIC related to the FREMF 2011-K13 Trust, and as a result having determined it is no longer the primary beneficiary of the trust, no longer consolidates the assets, liabilities, income and expenses of the FREMF 2011-K13 Trust. In the first quarter of 2019, the first-loss tranche of the Re-REMIC related to the FREMF 2012-KF01 Trust was paid-in full, and as a result having determined it is no longer the primary beneficiary of that trust, no longer consolidates the assets, liabilities, income and expense of the FREMF 2012-KF01 Trust. In December 2014, the Company acquired first loss and subordinated tranches issued by a residential mortgage-backed securitization (the "CSMC 2014-OAK1 Trust"). The Company determined this trust was a VIE and that the Company was the primary beneficiary, and accordingly consolidated the assets, liabilities, income and expenses of the trust into the Company's financial statements in accordance with GAAP. During the second quarter of 2018, the Company sold the first loss and subordinated tranches issued by the CSMC 2014-OAK1 Trust, and as a result, having determined it is no longer the primary beneficiary of the trust, no longer consolidates the assets,liabilities, income and expenses of the underlying trust. 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. As of March 31, 2019 , this subsidiary has no assets or liabilities. 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. As of March 31, 2019 , this subsidiary has no assets or liabilities. 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. As of March 31, 2019 , this subsidiary has no assets or liabilities. On January 18, 2018, the Company announced a new strategic direction, and the entry into a new external management agreement with the Manager and the concurrent mutual termination of the prior management agreement with Oak Circle Capital Partners, LLC ("Oak Circle"). Following the change in management, the Company has substantially completed the reallocation of capital into investment opportunities focused in the commercial real estate mortgage space taking advantage of Hunt's pipeline of transitional floating-rate multi-family and commercial real estate loans. Hunt and its affiliates are experienced in the origination, servicing, risk management and financing of this asset class and the floating-rate nature of the loans has eliminated the need for complex interest-rate hedging. The new management agreement better aligns the Company's interests with those of its new manager through an incentive fee arrangement and agreed upon limitations on manager expense reimbursements from the Company. In connection with the aforementioned transaction, an affiliate of Hunt purchased 1,539,406 shares of the Company's common stock in a private placement, at a purchase price of $4.77 per share resulting in an aggregate capital raise of $7,342,967 . In addition, such Hunt affiliate also purchased 710,495 of the Company's shares from the Company's largest shareholder, XL Investments Ltd. ("XL Investments"), for the same price per share. The purchase price per share represented a 56.9% premium over the Company's common stock price as of the closing on January 17, 2018. In connection with the acquisition of shares from XL Investments, XL Investments agreed to terminate all of its previously held Company warrants. After completion of these share purchases, Hunt and its affiliates own approximately 9.5% of the Company's outstanding common shares. Also in connection with the transaction, and as further described in Section 10 of the Company's 2017 10-K/A filed with the Securities and Exchange Commission filed on November 13, 2018 and in the Company's Current Report on Form 8-K filed with the Securities and Exchange Commission on January 18, 2018, David Carroll resigned as a director, Chairman and CEO of the Company and the Company's board appointed James C. ("Chris") Hunt as a director and Chairman of the board and named James P. Flynn as CEO of the Company and Michael P. Larsen as President of the Company. On April 30, 2018, as more particularly described in our current Report on Form 8-K filed on April 30, 2018, the Company acquired Hunt CMT Equity LLC for an aggregate purchase price of approximately $68 million , which was comprised of commercial mortgage loans financed through a collateralized loan obligation ("Hunt CRE 2017-FL1, Ltd."), a licensed commercial mortgage lender ("Hunt CMT Finance, LLC) and eight loan participations from a Hunt affiliate. The assets of Hunt CRE 2017-FL1, Ltd. were comprised of performing floating-rate commercial mortgage loans with a portfolio balance of $339.4 million at acquisition date and $9.8 million in cash available for reinvestment. The securitization pool was financed by investment-grade notes with a notional principal balance of $290.7 million and a net carrying value of $287.6 million after accounting for unamortized discount. Additionally the Company paid $0.1 million for the assets acquired with the licensed lender and $6.2 million for the loan participations. The Company determined Hunt CRE 2017-FL1, Ltd. was a VIE and that the Company was the primary beneficiary of the issuing entity, and accordingly consolidated its assets, liabilities, income and expenses into the Company's financial statements in accordance with GAAP. On August 20, 2018, the Company closed Hunt CRE 2018-FL2, Ltd., a $285 million commercial real estate Collateralized Loan Obligation, which financed 20 first lien floating-rate commercial real estate mortgage assets acquired from Hunt Finance Company, LLC, an affiliate of the Company's Manager. The assets of the Hunt CRE 2018-FL2, Ltd. were comprised of performing floating-rate commercial mortgage loans with a portfolio balance of $225.3 million at execution date and $59.7 million in cash available for reinvestment. The securitization pool was financed by investment-grade notes with a notional principal balance of $219.4 million and a net carrying value of $215.4 million after accounting for deferred financing costs. The Company determined Hunt CRE 2018-FL2, Ltd. was a VIE and the Company was the primary beneficiary of the issuing entity, and accordingly consolidated its assets, liabilities, income and expenses into the Company's financial statements in accordance with GAAP. On January 15, 2019, the Company, together with its FOAC and Hunt CMT Equity subsidiaries (together with the Company, the “Credit Parties”), entered into a delayed draw facility (the “Delayed Draw Facility”) with the lenders party thereto and Cortland Capital Market Services, LLC, as administrative agent (in such capacity, the “Agent”), providing for a term facility (the “Credit Agreement”) to be drawn in an aggregate principal amount of $40.25 million with a maturity of 6 years . The borrowings under the Delayed Draw Facility are joint and several obligations of the Credit Parties. In addition, the Credit Parties’ obligations under the Delayed Draw Facility are secured by substantially all the assets of the Credit Parties through pledge and security documentation. Amounts advanced under the Delayed Draw Facility are subject to compliance with a borrowing base comprised of assets of the Credit Parties and certain of their subsidiaries, and includes senior and subordinated commercial real estate mortgage loans, preferred equity in a commercial real estate asset (directly or indirectly), commercial real estate construction mortgage loans and certain types of equity interests (the “Eligible Assets”). Borrowings under the Delayed Draw Facility bear interest at a fixed rate of 7.25% for the five year period following the initial draw-down, which is subject toa step up by 0.25% for the first four months after the fifth anniversary of the borrowing of the Senior Secured Term Loan, then by 0.375% for the following four months, then by 0.50% for the last four months until the maturity. On February 14, 2019, the Company drew on the Delayed Draw Facility in the aggregate principal amount of $40.25 million and used the net proceeds of $39.3 million and working capital of $1.1 million to redeem all 1,610,000 shares of its outstanding 8.75% Series A Cumulative Redeemable Preferred Stock at its $25 per share liquidation preference plus accrued and unpaid dividends. On March 18, 2019, the Company entered into a support agreement with its Manager, pursuant to which, its Manager agreed to reduce the reimbursement cap by 25% per annum (subject to such reduction not exceeding $568,000 per annum) until such time as the aggregate support provided thereunder equaled approximately $1.96 million . |
SUMMARY OF SIGNIFICANT ACCOUNTI
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 3 Months Ended |
Mar. 31, 2019 | |
Accounting Policies [Abstract] | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Basis of Presentation The condensed consolidated balance sheet as of December 31, 2018 , has been derived from audited financial statements. The condensed consolidated balance sheet as of March 31, 2019 , the condensed consolidated statements of operations and the condensed consolidated statements of comprehensive income (loss), for the three months ended March 31, 2019 , and for the three months ended March 31, 2018 , the condensed consolidated statement of stockholders’ equity for the three months ended March 31, 2019 , and the condensed consolidated statements of cash flows for the three months ended March 31, 2019 , and the three months ended March 31, 2018 , are unaudited. The unaudited condensed consolidated financial statements and related notes have been prepared in accordance with GAAP for interim financial reporting and the instructions to Form 10-Q and Rule 10-01 of Regulation S-X. Accordingly, certain information and note disclosures normally included in the financial statements prepared under GAAP have been condensed or omitted. In the opinion of management, all adjustments considered necessary for a fair presentation of the Company’s financial position, results of operations and cash flows have been included and are of a normal and recurring nature. The operating results presented for interim periods are not necessarily indicative of the results that may be expected for any other interim period or for the entire year. These condensed consolidated financial statements should be read in conjunction with the Company’s financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2018 , which was filed with the Securities and Exchange Commission (“SEC”) on March 18, 2019. Principles of Consolidation The accompanying condensed 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. During the second quarter of 2018, the Company sold the first-loss securities of the Re-REMIC related to the FREMF 2011-K13 Trust, and as a result, having determined it is no longer the primary beneficiary of the trust, no longer consolidates the assets, liabilities, income and expenses of that trust. Additionally, during the second quarter of 2018, the Company sold the first-loss and subordinated tranches issued by the CSMC 2014-OAK1 Trust, and as a result, having determined it is no longer the primary beneficiary of the trust, no longer consolidates the assets, liabilities, income and expenses of the underlying trust. In the first quarter of 2019, the first-loss tranche of the Re-REMIC related to the FREMF 2012-KF01 Trust was redeemed, and as a result, having determined the Company is no longer the primary beneficiary of that trust, no longer consolidates the assets, liabilities, income and expense of the trust. The Company's maximum exposure to loss from consolidated trusts was $0 and $4,762,149 , respectively, at March 31, 2019 and December 31, 2018 . At March 31, 2019 , the Company did not have any exposure to consolidated trusts. Additionally, the Company has evaluated its junior retained notes and preferred shares of Hunt CRE 2017-FL1, Ltd. and Hunt CRE 2018-FL2, Ltd. for potential consolidation. At March 31, 2019 , the Company determined it was the primary beneficiary of Hunt CRE 2017-FL1, Ltd. and Hunt CRE 2018-FL2, Ltd. based on its obligation to absorb losses derived from ownership of its preferred shares. Accordingly, the Company consolidated the assets, liabilities, income and expenses of the underlying issuing entities. The Company's maximum exposure to loss from collateralized loan obligations was $124,046,671 at March 31, 2019 and December 31, 2018 . 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 and Restricted Cash 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. The following table provides a reconciliation of cash, cash equivalents and restricted cash reported within the condensed consolidated balance sheets that sum to the total of the same amounts shown in the statements of cash flows. March 31, 2019 December 31, 2018 Cash and cash equivalents $ 13,640,181 $ 7,882,862 Restricted cash CRE 2017-FL1, Ltd. 43,193,321 24,085,890 Restricted cash CRE 2018-FL2, Ltd. $ 9,155,666 $ 27,245,060 Total cash, cash equivalents and restricted cash $ 65,989,168 $ 59,213,812 Restricted cash includes cash held within Hunt CRE 2017-FL1, Ltd. and Hunt CRE 2018-FL2, Ltd. for purposes of reinvestment in qualifying commercial mortgage loans. Deferred Income Previously, certain service revenues received in the period were recorded as a liability in the Company’s condensed consolidated balance sheets in the line item “Deferred income”, for subsequent recognition as income in the Company’s condensed consolidated statements of operations in the line item "Other income".. 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. Commercial Mortgage Loans Held-for-Investment Commercial mortgage loans held-for-investment represent floating-rate transitional loans and other commercial mortgage loans purchased by the Company. These loans include loans sold into securitizations that the Company consolidates. Commercial mortgage loans held-for-investment are intended to be held-to-maturity and, accordingly, are carried at their unpaid principal balances, adjusted for net unamortized loan fees and costs (in respect of originated loans), premiums and discounts (in respect of purchased loans) and impairment, if any. Interest income is recognized as revenue using the effective interest method and is recorded on the accrual basis according to the terms of the underlying loan agreement. Any fees, premiums and discounts associated with these loan investments are recorded over the term of the loan using the effective interest method, or on a straight line basis when it approximates the effective interest method. Income accrual is generally suspended and loans are placed on non-accrual status on the earlier of the date at which payment has become 90 days past due or when full and timely collection of interest and principal is considered not probable. The Company may return a loan to accrual status when repayment of principal and interest is reasonably assured under the terms of the underlying loan agreement. As of March 31, 2019 , the Company did not hold any loans placed on non-accrual status. Quarterly, the Company assesses the risk factors of each loan classified as held-for-investment and assigns a risk rating based on a variety of factors, including, without limitation, debt-service coverage ratios ("DSCR"), loan-to-value ratio ("LTV"), property type, geographic and local market dynamics, physical condition, leasing and tenant profile, adherence to business plan and exit plan, maturity default risk and project sponsorship. Based on a 5-point scale, our loans are rated "1" through "5", from least risk to greatest risk, respectively, which ratings are described as follows: 1. Very Low Risk: exceeds expectations, outperforming underwriting 2. Low Risk: meeting expectations 3. Moderate Risk: a loss unlikely due to value and other indicators 4. High Risk: potential risk of default, a loss may occur in the event of default 5. Default Risk: imminent risk of default, a loss is likely in the event of default The Company evaluates each loan classified as held-for-investment which has High Risk or above rating for impairment on a quarterly basis. Impairment occurs when the Company determines that the facts and circumstances of the loan deem it probable that the Company will not be able to collect all amounts due in accordance with the contractual terms of the loan. If a loan is considered to be impaired, an allowance is recorded to reduce the carrying value of the loan through a charge to the provision for loan losses. Impairment of these loans, which are collateral dependent, is measured by comparing the estimated fair value of the underlying collateral, less costs to sell, to the book value of the respective loan. These valuations require significant judgments, which include assumptions regarding capitalization rates, leasing, creditworthiness of major tenants, occupancy rates, availability of financing, exit plan, actions of other lenders, and other factors deemed necessary by the Manager. Actual losses, if any, could ultimately differ from estimated losses. In addition, the Company evaluates the entire portfolio to determine whether the portfolio has any impairment that requires a valuation allowance on the remainder of the loan portfolio. As of March 31, 2019 , the Company has not recognized any impairments on its loans held-for-investment and therefore has not recorded any allowance for loan losses. Mortgage Servicing Rights and Excess Servicing Rights, at Fair Value Mortgage servicing rights (“MSRs”) are associated with residential mortgage loans that the Company 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. Collateralized Loan Obligations Collateralized loan obligations represent third-party liabilities of Hunt CRE 2017-FL1, Ltd. and Hunt CRE 2018-FL2, Ltd. (the "CLOs"). The CLOs are VIEs that the Company has determined it is the primary beneficiary and accordingly they are consolidated in the Company's financial statements, excluding liabilities of the CLOs acquired by the Company that are eliminated on consolidation. The third-party obligations of the CLOs do not have any recourse to the Company as the consolidator of the CLOs. Collateralized loan obligations are carried at their outstanding unpaid principal balances, net of any unamortized discounts or deferred financing costs. Any premiums and discounts or deferred financing costs associated with these liabilities are amortized to interest expense using the effective interest method over the expected average life of the related obligations, or on a straight line basis when it approximates the effective interest method. Secured Term Loan The Company and certain of its subsidiaries are party to a $40.25 million Delayed Draw Facility with the lenders referred to therein and Cortland Capital Service LLC, as administrative agent and collateral agent for the lenders (the "Secured Term Loan"). The Secured Term Loan is carried at its unpaid principal balance, net of deferred financing costs. Deferred financing costs of $970,545 associated with this liability are amortized to interest expense using the effective interest method over the term of the Secured Term Loan, or on a straight line basis when it approximates the effective interest method. Available-for-Sale Securities, at Fair Value Interest income on the Company’s Available-for-Sale ("AFS") securities portfolio, with the exception of Non-Agency RMBS IOs (as further described below), was accrued based on the actual coupon rate and the outstanding principal balance of such securities. The Company recognized interest income using the effective interest method for all AFS securities. As such, premiums and discounts were 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 was recorded in the “Interest Income” line item on the condensed 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 were estimated, which directly affected the speed at which the Company amortized such securities. If actual and anticipated cash flows differed from previous estimates, the Company recognized 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 reassessed 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 were a number of assumptions that were subject to uncertainties and contingencies. These included 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 were judgmentally estimated. Differences between previously estimated cash flows and current actual and anticipated cash flows were 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 was probable, at acquisition, that the Company would be unable to collect all contractually required payments receivable, the Company applied 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 were generally recognized prospectively through adjustment of the investment’s yield over its remaining life. Decreases in cash flows expected to be collected were recognized as impairment to the extent that such decreases were 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 were the result of factors other than credit impairment, for example a change in rate of prepayments, such changes were 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 was likely to differ from the financial accounting treatment of these items as described above. Gains and losses from the sale of AFS securities were recorded within "realized gain (loss) on investments, net" in the Company's condensed consolidated statements of operations. Upon the sale of a security, the Company determined 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 were recorded as "unrealized gain (loss) on available-for-sale securities, net" in the Company's condensed consolidated statements of comprehensive income (loss). Impairment The Company evaluated its MBS, on a quarterly basis, to assess whether a decline, if any, in the fair value of an AFS security below the Company's amortized cost basis was an other-than-temporary impairment (“OTTI”). The presence of OTTI was 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, 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. As of March 31, 2019 and December 31, 2018 , the Company no longer held any AFS securities. Multi-Family and Residential Mortgage Loans Held in Securitization Trusts Multi-family and residential mortgage loans held in consolidated securitization trusts were comprised of multi-family mortgage loans held in the FREMF 2011-K13 Trust and the FREMF 2012-KF01Trust, and residential mortgage loans held in the CSMC 2014-OAK1. Based on a number of factors, the Company determined it was the primary beneficiary of the VIE underlying the trust, met the criteria for consolidation and, accordingly, consolidated the trust, including its assets, liabilities, income and expenses in its financial statements. The Company 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. The Company sold the subordinated securities of the FREMF 2011-K13 Trust on May 18, 2018 and the CSMC 2014-OAK1 Trust on June 18, 2018, and having determined that it was no longer the primary beneficiary of either trust as of those dates, the Company no longer consolidated either trust as of those dates. Additionally, in the first quarter of 2019, the first-loss tranche of the re-REMIC related to the FREMF 2012-KF01 Trust paid-in full, and as a result, having determined the Company is no longer the primary beneficiary of the trust, no longer consolidates the assets, liabilities, income and expense of the trust. Interest income on multi-family and residential mortgage loans held in securitization trusts was recognized at the loan coupon rate. Interest income recognition was suspended when mortgage loans were placed on non-accrual status. The accrual of interest on loans was discontinued when, in management’s opinion, the interest was considered non-collectible, and in all cases when payment became greater than 90 days past due. Loans returned to accrual status when principal and interest became current and were anticipated to be fully collectible. As of March 31, 2019 , the Company no longer held any multi-family securitization trusts and as of March 31, 2019 and December 31, 2018 , respectively, the Company no longer held any residential securitization trusts. Repurchase Agreements The Company previously financed the acquisition of certain of its mortgage-backed securities through the use of repurchase agreements. Our repurchase agreements were generally short-term debt, which expired 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 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. As of March 31, 2019 and December 31, 2018 , the Company no longer had any repurchase agreements outstanding. Multi-Family and Residential Securitized Debt Obligations Multi-family and residential securitized debt obligations represented third-party liabilities of the FREMF 2011-K13 Trust, FREMF 2012-KF01 Trust and CSMC 2014-OAK1 Trust, and excluded the liabilities of the trust acquired by the Company that were eliminated on consolidation. The third-party obligations of the trust did not have any recourse to the Company as the consolidator of each trust. As of March 31, 2019 the Company no longer had any multi-family securitized debt obligations outstanding and as of March 31, 2019 and December 31, 2018 , respectively, the Company no longer had any residential securitized debt obligations outstanding. Backstop Guarantees The Company, through FOAC and in return for fees, provides seller eligibility and backstop guarantee services in respect of residential mortgage loans that are traded through one or more loan exchanges operated by MAXEX LLC (“MAXEX”). On June 27, 2018, FOAC entered into an amendment with MAXEX pursuant to which, amongst other things, FOAC's obligations to provide such seller eligibility and backstop guarantee services terminated at 11:59 p.m. (Eastern Standard Time) on December 31, 2018 or sooner, at MAXEX's option. 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 recognized 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. As of March 31, 2019 and December 31, 2018 , the Company no longer had any backstop guarantee obligations outstanding. Common Stock At March 31, 2019 and December 31, 2018 , 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 23,687,664 shares of common stock issued and outstanding at March 31, 2019 and December 31, 2018 . 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. As of December 31, 2018, the Company had repurchased 126,856 shares of common stock at a weighted average share price of $5.09 . There was no common stock repurchase activity for the three months ended March 31, 2019 . As of March 31, 2019 , $9.4 million of common stock remained authorized for future share repurchases under the Repurchase Program. Preferred Stock On February 14, 2019, the Company redeemed all 1,610,000 shares of its outstanding 8.75% Series A Cumulative Redeemable Preferred Stock at its $25 per share liquidation preference plus accrued and unpaid dividends. At December 31, 2018 , the Company was authorized to issue up to 50,000,000 shares 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 December 31, 2018 . 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. A REIT is generally taxable as a U.S. C-Corporation; however, so long as the Company qualifies as a REIT it is entitled to a special deduction for dividends paid to shareholders not otherwise available to corporations. Accordingly, the Company generally will not be subject to U.S. federal income tax to the extent its distributions to stockholders equals, or exceeds, its REIT taxable income for the year. In addition, the Company must continue to meet certain REIT qualification requirements with respect to distributions, as well as certain asset, income and share ownership tests, in accordance with Sections 856 through 860 of the Code, as summarized below. In addition, the TRS is maintained to perform certain services and earn income for the Company that would potentially disqualify the Company from qualifying as a REIT. To maintain its qualification as a REIT, the Company must meet certain requirements (including but not limited to the following: (i) distribute at least 90% of its REIT taxable income to its stockholde |
FAIR VALUE MEASUREMENTS
FAIR VALUE MEASUREMENTS | 3 Months Ended |
Mar. 31, 2019 | |
Fair Value Disclosures [Abstract] | |
FAIR VALUE MEASUREMENTS | 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. Commercial Mortgage Loans Held-for-Investment Designation The Company classifies its commercial mortgage loans as held-for-investment. Determination of Commercial Mortgage Loans Held-for-Investment Fair Value Loans that the Company has the intent and ability to hold for the foreseeable future, or until maturity or repayment, are reported at their unpaid principal balances, adjusted for net unamortized loan origination fees, premiums and discounts and an allowance for loan losses, if applicable. Loan origination fees and direct loan origination costs are deferred and recognized in interest income over the estimated life of the loans using the interest method, or on a straight line basis when it approximates the interest method, adjusted for actual prepayments. The Company may record fair value adjustments on a non-recurring basis when it has determined that it is necessary to record a specific impairment reserve against a loan and the Company measures such specific reserve using the fair value of the loan's collateral. To determine the fair value of loan collateral, the Company employs different approaches depending upon the nature of such collateral and other relevant market factors. Commercial mortgage loans held-for-investment are considered Level 3 fair value measurements that are not measured at fair value on a recurring basis. MSRs and Excess Servicing Rights Designation MSRs are associated with residential mortgage loans that the Company previously purchased and subsequently sold or securitized, and were typically acquired directly from loan originators and recognized at the time that loans were transferred to a third party or a securitization, in each case providing such transfer met the GAAP criteria for sale. The Company retains the rights to service certain loans that it has sold or securitized, 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 cash flows, 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. Collateralized Loan Obligations Designation Collateralized loan obligations are carried at their outstanding unpaid principal balances, net of any unamortized discounts or deferred financing costs. Determination of Fair Value The Company determines the fair value of collateralized loan obligations by utilizing a third-party pricing service. As such, the Company has determined that collateralized loan obligations should be classified as Level 2. Secured Term Loan Designation Secured term loans are carried at their outstanding unpaid principal balances, net of any unamortized discounts or debt issuance costs. Determination of Fair Value The Company's secured term loan is currently recorded at its outstanding unpaid principal balance, which is the Company's best estimate of fair value as a result of the recency of the February 13, 2019 draw on the Delayed Draw Facility. As such, the Company has determined this secured term loan should be classified as Level 2. Available-for-sale Securities The Company previously invested in Agency RMBS, Multi-Family MBS and Non-Agency RMBS. Designation The Company classified its MBS securities as AFS investments. Although the Company generally intended to hold most of its investment securities until maturity, however, as a result of its change in investment strategy, the Company sold all of these securities during 2018. All assets classified as AFS, except Non-Agency RMBS IOs, were 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 a result of the fair value election, unrealized gains and losses on Non-Agency RMBS IOs were recorded in the Company’s consolidated statement of operations. Determination of MBS Fair Value The Company determined the fair values for the Agency RMBS, Multi-Family MBS and Non-Agency RMBS in its portfolio based on obtaining a valuation for each such security from third-party pricing services, and may have also obtained dealer quotes, as described below. The third-party pricing services used common market pricing methods that may have included pricing models that incorporated 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 incorporated 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 obtained 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 indicated that the pricing data from the primary third-party service was materially inaccurate, or pricing data was unavailable from the primary third-party pricing service, the Company undertook a review of other available prices and took additional steps to determine fair value. In all cases, the Company validated its understanding of methodology and assumptions underlying the fair value used. If the Company determined that the pricing data from the primary third-party service was materially inaccurate if it was not materially representative of where a specific security could be traded in the normal course of business. In making such determination, the Company followed a series of steps, including review of collateral marks from margin departments of repurchase agreement 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 reviewed all pricing of Agency and Non-Agency RMBS and Multi-Family MBS used to ensure that current market conditions were properly represented. This review included, but was 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 were classified as Level 2 securities if the pricing methods used were consistent with the Level 2 definition. If quoted prices for a security were not reasonably and readily available from the pricing service, but dealer quotes were, the Company classified the security as a Level 2 security. If neither was available, the Company determined the fair value based on characteristics of the security that were received from the issuer and based on available market information received from dealers and classified it as a Level 3 security. Multi-Family Mortgage Loans Held in Securitization Trusts and Multi-Family Securitized Debt Obligations Designation Multi-family mortgage loans held in consolidated securitization trusts were comprised of multi-family mortgage loans held in the FREMF 2011-K13 Trust and the FREMF 2012-KF01 Trust. Based on a number of factors, the Company previously determined that it was the primary beneficiary of the VIEs underlying the trusts, met the criteria for consolidation and, accordingly, consolidated the FREMF 2011-K13 Trust and the FREMF 2012-KF01 Trust, including its assets, liabilities, income and expenses in its financial statements. The Company elected the fair value option on each of the assets and liabilities held within the trusts. Following the sale during the second quarter of 2018 of the first-loss tranche of the FREMF 2011-K13 Trust and the repayment in full of the first-loss tranche of the FEMF 2012-KF01 Trust during the first quarter of 2019, the Company determined it was no longer the primary beneficiary of the trusts, and accordingly no longer consolidates the underlying trusts. Determination of Fair Value In accordance with ASU 2014-13, the Company previously elected the fair value option in respect of the assets and liabilities of the FREMF 2011-K13 and FREMF 2012-KF01 Trust. The trusts were “static”, that is no reinvestment was permitted and there was very limited active management of the underlying assets. Under the ASU, the Company was required to determine whether the fair value of the financial assets or the fair value of the financial liabilities of the trust was more observable, but in either case, the methodology resulted in the fair value of the assets of each of the trusts being equal to the fair value of their liabilities. The Company determined that the fair value of the liabilities of the trust was more observable, since in all cases prices for the liabilities were available from the primary third-party pricing service utilized for Multi-Family MBS, while the individual assets of each of the trusts were 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 was an aggregate value derived from the fair value of the trust liabilities, the Company 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 were comprised of residential mortgage loans held in the CSMC 2014-OAK1 Trust. Based on a number of factors, the Company previously determined that it was the primary beneficiary of the VIE underlying the trust, met the criteria for consolidation and, accordingly, consolidated the CSMC 2014-OAK1 Trust including its assets, liabilities, income and expenses in its financial statements. Following the sale during the second quarter of 2018 of the subordinated securities previously held by the Company, the Company determined that it was no longer the primary beneficiary of the trust, and accordingly ceased consolidating the underlying trust as of sale date. The Company previously elected the fair value option on each of the assets and liabilities held within the trust. Determination of Fair Value In accordance with ASU 2014-13, the Company previously elected the fair value option in respect of the assets and liabilities of the CSMC 2014-OAK1 Trust. The trust was “static”, that is no reinvestment is permitted and there was very limited active management of the underlying assets. Under the ASU, the Company was required to determine whether the fair value of the financial assets or the fair value of the financial liabilities of the trust was more observable, but in either case, the methodology resulted in the fair value of the assets of the trust being equal to the fair value of its liabilities. The Company determined that the fair value of the liabilities of the trust was more observable, since in all cases prices for the liabilities were available from the primary third-party pricing service utilized for Non-Agency RMBS, with the exception of the excess servicing rights, which were available from an alternative third-party pricing service. While the individual assets of the trust, i.e. the underlying residential mortgage loans, were capable of being priced, the Company determined that the pricing of the liabilities was more easily and readily determined. Given that the Company’s methodology for valuing the assets of the trust was an aggregate value derived from the fair value of the trust’s liabilities, the Company 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 based on quoted prices for similar instruments in active markets, including exchange-traded instruments, are classified as Level 1 valuations. 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. As of March 31, 2019 , the Company no longer held any derivative financial instruments. 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. |
AVAILABLE-FOR-SALE SECURITIES
AVAILABLE-FOR-SALE SECURITIES | 3 Months Ended |
Mar. 31, 2019 | |
Investments, Debt and Equity Securities [Abstract] | |
AVAILABLE-FOR-SALE SECURITIES | As of March 31, 2019 and December 31, 2018 , the Company no longer held AFS securities. The following table presents a summary of the Company’s net realized gain (loss) from the sale of AFS securities for the three months ended March 31, 2018 : Three Months Ended AFS securities sold, at cost $ 147,058,544 Proceeds from AFS securities sold $ 144,210,537 Net realized gain (loss) on sale of AFS securities $ (2,848,007 ) Gains and losses from the sale of AFS securities are recorded within "realized gain (loss) on sale of investments, net" in the Company's condensed consolidated statements of operations. The following table presents components of interest income on the Company’s AFS securities for the three months ended March 31, 2018 : Three Months Ended March 31, 2018 Coupon interest Net (premium amortization)/ discount accretion Interest income Agency $ 8,323,342 $ (1,275,855 ) $ 7,047,487 Multi-Family — 32,103 32,103 Total $ 8,323,342 $ (1,243,752 ) $ 7,079,590 |
COMMERCIAL MORTGAGE LOANS HELD-
COMMERCIAL MORTGAGE LOANS HELD-FOR-INVESTMENT COMMERCIAL MORTGAGE LOANS HELD-FOR-INVESTMENT | 3 Months Ended |
Mar. 31, 2019 | |
Receivables [Abstract] | |
COMMERCIAL MORTGAGE LOANS HELD-FOR-INVESTMENT | COMMERCIAL MORTGAGE LOANS HELD-FOR-INVESTMENT The following tables summarize certain characteristics of the Company's investments in commercial mortgage loans as of March 31, 2019 and December 31, 2018 : Weighted Average Loan Type Unpaid Principal Balance Carrying Value Loan Count Floating Rate Loan % Coupon (1) Life (Years) (2) March 31, 2019 Loans held-for-investment Senior secured loans (3) $ 585,770,803 $ 585,770,803 45 100.0 % 6.5 % 4.0 585,770,803 585,770,803 45 100.0 % 6.5 % 4.0 Weighted Average Loan Type Unpaid Principal Balance Carrying Value Loan Count Floating Rate Loan % Coupon (1) Life (Years) (2) December 31, 2018 Loans held-for-investment Senior secured loans (3) $ 555,172,891 $ 555,172,891 44 100.0 % 6.4 % 4.1 555,172,891 555,172,891 44 100.0 % 6.4 % 4.1 (1) Average weighted by unpaid principal balance of loan. Weighted average coupon assumes applicable one-month LIBOR rate as of March 31, 2019 and December 31, 2018 . (2) The weighted average life of each loan is based on the expected repayment of principal assuming all extension options are exercised by the borrower. (3) As of March 31, 2019 , $581,878,684 of the outstanding senior secured loans were held in VIEs and $3,892,119 of the outstanding senior secured are held outside VIEs. As of December 31, 2018 , $550,555,503 of the outstanding senior secured loans were held in VIEs and $4,617,388 of the outstanding senior secured loans were held outside VIEs. Activity: For the three months ended March 31, 2019 , the loan portfolio activity was as follows: Commercial Mortgage Loans Held-for-Investment Balance at December 31, 2018 $ 555,172,891 Purchases 64,612,349 Proceeds from principal repayments (34,014,437 ) Balance at March 31, 2019 $ 585,770,803 Loan Risk Ratings: As further described in Note 2, the Company evaluates the commercial mortgage loan portfolio on a quarterly basis. In conjunction with the quarterly commercial mortgage loan portfolio review, the Company assesses the risk factors of each loan, and assigns a risk rating based on a variety of factors. Loans are rated "1" (very low risk) through "5" (default risk), which are described in Note 2. The following tables present the principal balance and net book value of the loan portfolio based on the Company's internal risk ratings as of March 31, 2019 and December 31, 2018 : March 31, 2019 Risk Rating Number of Loans Unpaid Principal Balance Net Carrying Value 1 — $ — — 2 7 63,522,869 63,522,869 3 34 483,865,447 483,865,447 4 4 38,382,487 38,382,487 5 — — — 45 $ 585,770,803 585,770,803 As of March 31, 2019 , the average risk rating of the commercial mortgage loan portfolio was 2.9 (Moderate Risk), weighted by investment carrying value, with 90.9% of commercial loans held-for-investment rated 3 (Moderate Risk) or better by the Company's Manager. December 31, 2018 Risk Rating Number of Loans Unpaid Principal Balance Net Carrying Value 1 — $ — — 2 5 51,589,000 51,589,000 3 34 455,323,082 455,323,082 4 5 48,260,809 48,260,809 5 — — — 44 $ 555,172,891 555,172,891 As of December 31, 2018 , the average risk rating of the commercial mortgage loan portfolio was 2.9 (Moderate Risk), weighted by investment carrying value, with 91.3% of commercial loans held-for-invested rated 3 (Moderate Risk) or better by the Company's Manager. Concentration of Credit Risk: The following tables present the geographic and property types of collateral underlying the Company's commercial mortgage loans as a percentage of the loans' carrying value as of March 31, 2019 and December 31, 2018 : Loans Held-for-Investment March 31, 2019 December 31, 2018 Geography Southwest 36.3 % 30.2 % South 21.6 22.6 Midwest 17.5 20.2 Mid-Atlantic 11.3 10.3 West 7.7 10.8 Various 5.6 5.9 Total 100.0 % 100.0 % March 31, 2019 December 31, 2018 Collateral Property Type Multi-Family 83.8 % 87.2 % Office 7.3 7.6 Retail 7.2 1.2 Self-Storage 0.9 1.0 Mixed-Use 0.8 3.0 Total 100.0 % 100.0 % The table below sets forth additional information relating to the Company's portfolio as of March 31, 2019 : Loan # Form of Investment Origination Date Total Loan Commitment (1) Unpaid Principal Balance Location Property Type Coupon Max Remaining Term (Years) LTV (2) 1 Senior Loan 12-Jun-17 4,675,000 4,675,000 Winston-Salem, NC Multi-Family 1mL + 6.0% 1.3 77.2 % 2 Senior Loan 5-Nov-15 5,535,000 5,535,000 Pascagoula, MS Multi-Family 1mL + 4.5% 1.7 72.9 % 3 Senior Loan 11-Oct-17 6,370,000 6,370,000 New Orleans, LA Multi-Family 1mL + 4.1% 3.7 75.5 % 4 Senior Loan 13-Oct-17 14,715,000 14,715,000 Hattiesburg, MS Multi-Family 1mL + 4.8% 3.7 78.4 % 5 Senior Loan 9-Jan-18 10,317,000 9,518,294 North Highlands, CA Multi-Family 1mL + 4.0% 3.9 79.0 % 6 Senior Loan 16-Jun-17 5,634,482 5,543,885 Dallas, TX Multi-Family 1mL + 4.8% 3.3 75.2 % 7 Senior Loan 15-Nov-17 30,505,000 30,505,000 Phoenix, AZ Multi-Family 1mL + 3.8% 3.8 74.3 % 8 Senior Loan 30-Nov-16 5,000,000 4,675,039 Stafford, TX Office 1mL + 5.5% 2.8 56.4 % 9 Senior Loan 29-Sep-17 12,364,000 11,950,194 Austell, GA Multi-Family 1mL + 4.2% 3.6 80.4 % 10 Senior Loan 29-Jun-16 8,882,738 8,882,738 Various, TX Multi-Family 1mL + 5.5% 0.3 69.2 % 11 Senior Loan 1-Dec-17 19,110,000 19,110,000 Tuscon, AZ Multi-Family 1mL + 4.5% 3.8 80.3 % 12 Senior Loan 8-Aug-18 35,000,000 31,939,667 Dallas, TX Multi-Family 1mL + 3.7% 4.4 81.2 % 13 Senior Loan 27-Dec-17 7,600,000 7,600,000 Philadelphia, PA Multi-Family 1mL + 4.1% 3.8 79.8 % 14 Senior Loan 9-Jul-18 33,830,000 29,338,307 Baltimore, MD Multi-Family 1mL + 3.1% 4.4 77.6 % 15 Senior Loan 9-Oct-18 9,250,000 8,511,430 Dallas, TX Multi-Family 1mL + 3.7% 4.7 78.4 % 16 Senior Loan 10-Oct-18 3,569,150 2,788,015 Philadelphia, PA Multi-Family 1mL + 4.6% 4.7 79.6 % 17 Senior Loan 30-Nov-18 72,000,000 33,000,000 Various Multi-Family 1mL + 4.1% 4.8 70.4 % 18 Senior Loan 6-Dec-18 21,000,000 17,448,900 Greensboro, NC Multi-Family 1mL + 3.4% 4.8 79.8 % 19 Senior Loan 13-Dec-18 17,000,000 17,000,000 Seattle, WA Multi-Family 1mL + 3.8% 2.8 53.7 % 20 Senior Loan 18-Jan-19 10,750,000 7,958,000 Philadelphia, PA Multi-Family 1mL + 4.0% 4.9 71.3 % 21 Senior Loan 28-Dec-18 24,123,000 17,000,000 Austin, TX Retail 1mL + 4.1% 4.8 60.5 % 22 Senior Loan 13-Mar-19 19,360,000 15,862,000 Barytown, TX Multi-Family 1mL + 3.1% 5.1 80.5 % 23 Senior Loan 5-Jun-18 50,858,145 35,625,000 Palatine, IL Multi-Family 1mL + 4.3% 4.3 68.5 % 24 Senior Loan 18-May-18 28,000,000 25,355,116 Woodridge, IL Multi-Family 1mL + 3.8% 4.3 76.4 % 25 Senior Loan 29-Nov-17 22,500,000 22,500,000 Richmond, TX Multi-Family 1mL + 3.9% 1.8 73.5 % 26 Senior Loan 31-May-18 24,700,000 19,430,000 Omaha, NE Multi-Family 1mL + 3.7% 4.3 77.3 % 27 Senior Loan 28-Jun-18 17,000,000 14,800,000 Greenville, SC Multi-Family 1mL + 3.9% 4.3 76.3 % 28 Senior Loan 26-Mar-18 19,235,000 14,212,713 Rochelle Park, NJ Office 1mL + 4.0% 4.1 76.8 % 29 Senior Loan 1-Feb-18 14,320,000 12,920,000 Fresno, CA Multi-Family 1mL + 3.9% 3.9 82.4 % 30 Senior Loan 23-Jul-18 16,200,000 12,432,514 Chicago, IL Office 1mL + 3.8% 4.4 72.7 % 31 Senior Loan 24-May-18 12,720,000 11,323,290 Austin, TX Multi-Family 1mL + 3.6% 4.3 80.2 % 32 Senior Loan 25-May-18 11,000,000 9,440,000 Phoenix, AZ Multi-Family 1mL + 3.9% 4.3 69.4 % 33 Senior Loan 12-Mar-18 9,112,000 9,112,000 Waco, TX Multi-Family 1mL + 4.8% 4.1 78.3 % 34 Senior Loan 15-Feb-18 10,500,000 8,708,582 Atlanta, GA Multi-Family 1mL + 4.3% 4.0 80.2 % 35 Senior Loan 23-Feb-18 8,070,000 8,070,000 Little Rock, AR Multi-Family 1mL + 4.3% 4.0 81.3 % 36 Senior Loan 30-Aug-18 9,034,000 8,000,000 Blacksburg, VA Multi-Family 1mL + 3.9% 4.5 66.6 % 37 Senior Loan 7-Aug-18 9,000,000 8,053,748 Birmingham, AL Multi-Family 1mL + 3.5% 4.5 78.0 % 38 Senior Loan 4-Apr-18 7,332,000 6,874,000 Little Rock, AR Office 1mL + 4.9% 4.1 72.4 % 39 Senior Loan 2-Aug-18 10,000,000 6,860,637 Goldsboro, NC Retail 1mL + 4.0% 4.4 56.5 % 40 Senior Loan 9-Nov-17 6,647,000 5,547,000 Las Vegas, NV Self-Storage 1mL + 4.3% 3.8 76.0 % 41 Senior Loan 22-Jun-18 6,200,000 5,667,487 Chicago, IL Multi-Family 1mL + 4.1% 4.3 80.5 % 42 Senior Loan 29-Jun-18 4,525,000 4,404,365 Washington, DC Mixed Use 1mL + 4.7% 4.3 73.3 % 43 Senior Loan 30-Apr-18 4,080,000 3,793,542 Wichita, KS Multi-Family 1mL + 5.0% 4.2 69.0 % 44 Senior Loan 30-Nov-18 8,250,000 4,714,340 Decatur, GA Office 1mL + 4.1% 4.7 56.8 % 45 Senior Loan 28-Dec-18 20,850,000 18,000,000 Austin, TX Retail 1mL + 3.9% 4.8 71.4 % (1) See Note 16 Commitments and Contingencies for further discussion of unfunded commitments. (2) LTV as of the date the loan was originated by a Hunt affiliate and is calculated after giving effect to capex and earnout reserves, if applicable. LTV has not been updated for any subsequent draws or loan modifications and is not reflective of any changes in value, which may have occurred subsequent to the origination date. |
THE FREMF TRUSTS
THE FREMF TRUSTS | 3 Months Ended |
Mar. 31, 2019 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
THE FREMF TRUSTS | THE FREMF TRUSTS The Company previously elected the fair value option on the assets and liabilities of the FREMF 2011-K13 Trust and the FREMF 2012-KF01 Trust, which required that changes in valuations of the trusts be reflected in the Company’s statements of operations. The Company’s net investment in the trusts was 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 $0 at March 31, 2019 and $4,762,149 at December 31, 2018 . The Company sold the underlying Multi-Family MBS of the FREMF 2011-K13 trust effective May 18, 2018 and on January 25, 2019, the FREMF 2012-KF01 trust was paid-in full. As of March 31, 2019 the Company no longer held any FREMF Trusts. The condensed consolidated balance sheets of the FREMF trusts at December 31, 2018 are set out below: Balance Sheets December 31, 2018 Assets Multi-family mortgage loans held in securitization trusts $ — Receivables 24,357,335 Total assets $ 24,357,335 Liabilities and Equity Multi-family securitized debt obligations $ 19,231,331 Payables 363,855 Total liabilities $ 19,595,186 Equity 4,762,149 Total liabilities and equity $ 24,357,335 As of December 31, 2018, all of the loans within the FREMF 2012-KF01 trust had been paid-in full. Accordingly, the assets of the trust consisted of the non-distributed cash proceeds of the loan redemptions. The condensed consolidated statements of operations of the FREMF trusts for the three months ended March 31, 2019 and March 31, 2018 are as follows: Statements of Operations Three Months Ended Three Months Ended Interest income $ 78,361 $ 13,227,188 Interest expense — 12,526,295 Net interest income $ 78,361 $ 700,893 General and administrative fees — (623,254 ) Unrealized gain (loss) on multi-family loans held in securitization trusts 694,339 (1,355,774 ) Net income (loss) $ 772,700 $ (1,278,135 ) During the three months ended March 31, 2019 , the consolidated trust incurred realized losses of $709,439 . |
RESIDENTIAL MORTGAGE LOAN SECUR
RESIDENTIAL MORTGAGE LOAN SECURITIZATION TRUSTS | 3 Months Ended |
Mar. 31, 2019 | |
Variable Interest Entity [Line Items] | |
RESIDENTIAL MORTGAGE LOAN SECURITIZATION TRUSTS | THE FREMF TRUSTS The Company previously elected the fair value option on the assets and liabilities of the FREMF 2011-K13 Trust and the FREMF 2012-KF01 Trust, which required that changes in valuations of the trusts be reflected in the Company’s statements of operations. The Company’s net investment in the trusts was 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 $0 at March 31, 2019 and $4,762,149 at December 31, 2018 . The Company sold the underlying Multi-Family MBS of the FREMF 2011-K13 trust effective May 18, 2018 and on January 25, 2019, the FREMF 2012-KF01 trust was paid-in full. As of March 31, 2019 the Company no longer held any FREMF Trusts. The condensed consolidated balance sheets of the FREMF trusts at December 31, 2018 are set out below: Balance Sheets December 31, 2018 Assets Multi-family mortgage loans held in securitization trusts $ — Receivables 24,357,335 Total assets $ 24,357,335 Liabilities and Equity Multi-family securitized debt obligations $ 19,231,331 Payables 363,855 Total liabilities $ 19,595,186 Equity 4,762,149 Total liabilities and equity $ 24,357,335 As of December 31, 2018, all of the loans within the FREMF 2012-KF01 trust had been paid-in full. Accordingly, the assets of the trust consisted of the non-distributed cash proceeds of the loan redemptions. The condensed consolidated statements of operations of the FREMF trusts for the three months ended March 31, 2019 and March 31, 2018 are as follows: Statements of Operations Three Months Ended Three Months Ended Interest income $ 78,361 $ 13,227,188 Interest expense — 12,526,295 Net interest income $ 78,361 $ 700,893 General and administrative fees — (623,254 ) Unrealized gain (loss) on multi-family loans held in securitization trusts 694,339 (1,355,774 ) Net income (loss) $ 772,700 $ (1,278,135 ) During the three months ended March 31, 2019 , the consolidated trust incurred realized losses of $709,439 . |
Residential mortgage loans | |
Variable Interest Entity [Line Items] | |
RESIDENTIAL MORTGAGE LOAN SECURITIZATION TRUSTS | RESIDENTIAL MORTGAGE LOAN SECURITIZATION TRUSTS The Company previously 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 was 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. The Company sold all underlying Non-Agency RMBS of the trust effective June 18, 2018. As of March 31, 2019 , the Company no longer held any residential mortgage loan securitization trusts. The condensed consolidated statements of operations of the residential mortgage loan securitization trusts for the three months ended March 31, 2018 are as follows: Statements of Operations Three Months Ended Interest income $ 1,147,641 Interest expense 920,057 Net interest income $ 227,584 General and administrative fees (6,928 ) Unrealized gain (loss) on residential loans held in securitization trusts (255,403 ) Net income (loss) $ (34,747 ) |
USE OF SPECIAL PURPOSE ENTITIES
USE OF SPECIAL PURPOSE ENTITIES AND VARIABLE INTEREST ENTITIES | 3 Months Ended |
Mar. 31, 2019 | |
Hunt CRE 2017-FL1, Ltd. | |
Variable Interest Entity [Line Items] | |
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 then undertook an analysis of whether it is the primary beneficiary of any of these VIEs, and determined that it was the primary beneficiary of the FREMF 2012-KF01 Trust as of December 31, 2018 and through January 25, 2019, the repayment date of the underlying security. Accordingly, the Company consolidated the assets, liabilities, income and expenses of this trust in its financial statements through January 25, 2019 and December 31, 2018 . However, the assets of the trust are restricted, and can only be used to fulfill the obligations of the trust. Additionally, the obligations of the trust do not have any recourse to the Company as the consolidator of the trust. The Company has elected the fair value option in respect of the assets and liabilities of the trusts. As noted in Notes 6 and 7, the Company sold the underlying securities of the FREMF 2011-K13 and CSMC 2014-OAK1 trusts effective May 18, 2018 and June 18, 2018, respectively, and the FREMF 2012-KF01was paid-in full effective January 25, 2019, and henceforth no longer consolidates these three trusts. On April 30, 2018, the Company acquired Hunt CMT Equity LLC, which was comprised of commercial mortgage loans financed through collateralized loan obligations ("Hunt CRE 2017-FL1, Ltd."), a licensed commercial mortgage lender and eight loan participations. The Company determined Hunt CRE 2017-FL1, Ltd. was a VIE and that the Company was the primary beneficiary of the issuing entity, and accordingly consolidated its assets and liabilities into the Company's financial statements in accordance with GAAP. On August 20, 2018, the Company closed a collateral loan obligation ("Hunt CRE 2018-FL2, Ltd."). The Company determined Hunt CRE 2018-FL2, Ltd. was a VIE and the Company was the primary beneficiary of the issuing entity, and accordingly consolidated its assets and liabilities into the Company's financial statements in accordance with GAAP. 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 carrying values of the Company's total assets and liabilities related to Hunt CRE 2017-FL1, Ltd. and Hunt CRE 2018-FL2, Ltd. at March 31, 2019 and December 31, 2018 included the following VIE assets and liabilities: ASSETS March 31, 2019 December 31, 2018 Cash, cash equivalents and restricted cash $ 52,348,987 $ 51,330,950 Accrued interest receivable 2,591,990 2,398,905 Investment related receivable — 32,666,128 Loans held for investment 581,878,684 550,555,503 Total Assets $ 636,819,661 $ 636,951,486 LIABILITIES Accrued interest payable $ 936,589 $ 867,794 Collateralized loan obligations (1) 504,460,023 503,978,918 Total Liabilities $ 505,396,612 $ 504,846,712 Equity 131,423,050 132,104,774 Total liabilities and equity $ 636,819,661 $ 636,951,486 (1) The stated maturity of the collateral loan obligations per the terms of the underlying collateralized loan obligation agreement is August 15, 2034 for Hunt CRE 2017-FL1, Ltd. and August 15, 2028 for Hunt CRE 2018-FL2, Ltd. The following tables present certain loan and borrowing characteristics of Hunt CRE 2017-FL1, Ltd. and Hunt CRE 2018-FL2, Ltd. as of March 31, 2019 and December 31, 2018 : As of March 31, 2019 Collateral (loan investments) Debt (notes issued) Unpaid Principal Balance Carrying Value Face Value Carrying Value $ 581,878,684 $ 581,878,684 $ 510,181,000 $ 504,460,023 As of December 31, 2018 Collateral (loan investments) Debt (notes issued) Unpaid Principal Balance Carrying Value Face Value Carrying Value $ 550,555,503 $ 550,555,503 $ 510,181,000 $ 503,978,918 |
RESTRICTED CASH
RESTRICTED CASH | 3 Months Ended |
Mar. 31, 2019 | |
Cash and Cash Equivalents [Abstract] | |
RESTRICTED CASH | RESTRICTED CASH Hunt CRE 2017-FL1, Ltd. and Hunt CRE 2018-FL2, Ltd. are actively managed with initial reinvestment periods of 30 and 36 months, respectively. As loans payoff or mature, as applicable, during this reinvestment period, cash received is restricted and intended to be reinvested within Hunt CRE 2017-FL1, Ltd. or Hunt CRE 2018-FL2, Ltd. in accordance with the terms and conditions of their respective governing agreements. |
SECURED TERM LOAN
SECURED TERM LOAN | 3 Months Ended |
Mar. 31, 2019 | |
Debt Disclosure [Abstract] | |
SECURED TERM LOAN | SECURED TERM LOAN Secured Term Loan The Company borrowed funds under the Secured Term Loan on February 14, 2019. The outstanding balance of the Secured Term Loan in the table below is presented gross of deferred financing costs. As of March 31, 2019 , the outstanding balance and total commitment under the Credit Agreement consisted of the following: March 31, 2019 Outstanding Balance Total Commitment Secured Term Loan $ 40,250,000 $ 40,250,000 Total $ 40,250,000 $ 40,250,000 On January 15, 2019, the Company, together with its FOAC and Hunt CMT Equity subsidiaries (together with the Company, the “Credit Parties”), entered into a delayed draw facility (the “Delayed Draw Facility”) with the lenders party thereto and Cortland Capital Market Services, LLC, as administrative agent (in such capacity, the “Agent”), providing for a term facility (the “Credit Agreement”) to be drawn in an aggregate principal amount of $40.25 million with a maturity of 6 years . The borrowings under the Delayed Draw Facility are joint and several obligations of the Credit Parties. In addition, the Credit Parties’ obligations under the Delayed Draw Facility are secured by substantially all the assets of the Credit Parties through pledge and security documentation. Amounts advanced under the Delayed Draw Facility are subject to compliance with a borrowing base comprised of assets of the Credit Parties and certain of their subsidiaries, and includes senior and subordinated commercial real estate mortgage loans, preferred equity in commercial real estate assets (directly or indirectly), commercial real estate construction mortgage loans and certain types of equity interests (the “Eligible Assets”). Borrowings under the Delayed Draw Facility bear interest at a fixed rate of 7.25% for the five year period following the initial draw-down, which is subject to step up by 0.25% for the first four months after the fifth anniversary of the borrowing of the Senior Secured Term Loan, then by 0.375% for the following four months, then by 0.50% for the last four months until the maturity. The Credit Agreement contains affirmative and negative covenants binding on the Company and its subsidiaries that are customary for credit facilities of this type, including, but not limited to: minimum asset coverage ratio; minimum unencumbered assets ratio; maximum total net leverage ratio; minimum tangible net worth; and an interest charge coverage ratio. The Credit Agreement contains events of default that are customary for facilities of this type, including, but not limited to, nonpayment of principal, interest, fees and other amounts when due, violation of covenants, cross default with material indebtedness, and change of control. |
DERIVATIVE INSTRUMENTS HEDGING
DERIVATIVE INSTRUMENTS HEDGING AND NON-HEDGING ACTIVITIES | 3 Months Ended |
Mar. 31, 2019 | |
Derivative Instrument Detail [Abstract] | |
DERIVATIVE INSTRUMENTS HEDGING AND NON-HEDGING ACTIVITIES | DERIVATIVE INSTRUMENTS HEDGING AND NON-HEDGING INSTRUMENTS The Company previously entered into a variety of derivative instruments in connection with its risk management activities. The Company's primary objective for executing these derivatives was to mitigate the Company's economic exposure to future events that are outside its control. The Company's derivative financial instruments were 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 entered into various forward contracts, including short securities, Agency to-be-announced securities, or TBAs, options, futures, swaps, swaptions and caps and may do so again in the future. In executing on the Company's former risk management strategy, the Company previously entered into interest rate swaps, 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. Income Statement Presentation The Company has not applied hedge accounting to its derivative portfolio held to mitigate the interest rate risk associated with its debt portfolio. As a result, the Company was previously subject to volatility in its earnings due to movement in the unrealized gains and losses associated with its futures, 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 condensed consolidated statement of operations as realized gain (loss) on derivative contracts, net and unrealized gain (loss) on derivative contracts, net for the three months ended March 31, 2018 . The Company did not hold any derivative instruments as of March 31, 2019 : Three Months Ended March 31, 2018 Primary underlying risk Amount of realized gain (loss) Amount of unrealized appreciation (depreciation) Total Interest rate: Futures $ 2,792,794 $ 12,783,088 $ 15,575,882 Total $ 2,792,794 $ 12,783,088 $ 15,575,882 |
MSRs
MSRs | 3 Months Ended |
Mar. 31, 2019 | |
Mortgage Servicing Rights MSR Disclosure [Abstract] | |
MSRs | MSRs During the three months ended March 31, 2019 , the Company retained the servicing rights associated with an aggregate principal balance of $398,097,489 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. In addition, the Company previously consolidated the assets and liabilities of the CSMC 2014-OAK1 Trust, but following the sale of subordinated and first loss securities during the second quarter of 2018, the Company has determined that it is no longer the primary beneficiary of the trust, and accordingly no longer consolidates its assets and liabilities. Consequently, MSRs associated with this trust are recorded on the Company's condensed consolidated balance sheet at March 31, 2019 . The following table presents the Company’s MSR activity for the three months ended March 31, 2019 and the three months ended March 31, 2018 : March 31, 2019 March 31, 2018 Balance at beginning of period $ 3,997,786 $ 2,963,861 MSRs relating to sales to securitizations — — MSRs related to deconsolidation of securitization trust — — Changes in fair value due to: Changes in valuation inputs or assumptions used in valuation model (289,762 ) 174,761 Other changes to fair value (1) (90,236 ) (117,073 ) Balance at end of period $ 3,617,788 $ 3,021,549 Loans associated with MSRs (2) $ 398,097,489 $ 324,933,643 MSR values as percent of loans (3) 0.91 % 0.93 % (1) Amounts represent changes due to realization of expected cash flows. (2) Amounts represent the unpaid principal balance of loans associated with MSRs outstanding at March 31, 2019 and March 31, 2018 , respectively. (3) Amounts represent the carrying value of MSRs at March 31, 2019 and March 31, 2018 , respectively divided by the outstanding balance of the loans associated with these MSRs. The following table presents the servicing income recorded on the Company’s condensed consolidated statements of operations for the three months ended March 31, 2019 and March 31, 2018 : Three Months Ended Three Months Ended Servicing income $ 248,214 $ 219,978 Total servicing income $ 248,214 $ 219,978 |
FINANCIAL INSTRUMENTS
FINANCIAL INSTRUMENTS | 3 Months Ended |
Mar. 31, 2019 | |
Fair Value Disclosures [Abstract] | |
FINANCIAL INSTRUMENTS | ines 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 carried at fair value within the fair value hierarchy levels as of March 31, 2019 and December 31, 2018 : March 31, 2019 Quoted prices in active markets for identical assets Level 1 Significant other observable inputs Level 2 Unobservable inputs Level 3 Balance as of March 31, 2019 Assets: Mortgage servicing rights — — 3,617,788 3,617,788 Total $ — $ — $ 3,617,788 $ 3,617,788 December 31, 2018 Quoted prices in active markets for identical assets Level 1 Significant other observable inputs Level 2 Unobservable inputs Level 3 Balance as of December 31, 2018 Assets: Mortgage servicing rights — — 3,997,786 3,997,786 Total $ — $ — $ 3,997,786 $ 3,997,786 Liabilities: Multi-family securitized debt obligations $ — $ (19,231,331 ) $ — $ (19,231,331 ) Total $ — $ (19,231,331 ) $ — $ (19,231,331 ) As of March 31, 2019 and December 31, 2018 , the Company had $3,617,788 and $3,997,786 , 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 Notes 3 and 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 March 31, 2019 and December 31, 2018 : As of March 31, 2019 Valuation Technique Unobservable Input Range Weighted Average Discounted cash flow Constant prepayment rate 7.0 - 24.0% 11.5 % Discount rate 12.0 % 12.0 % As of December 31, 2018 Valuation Technique Unobservable Input Range Weighted Average Discounted cash flow Constant prepayment rate 7.0 - 20.4% 10.1 % Discount rate 12.0 % 12.0 % As discussed in Note 3, GAAP requires disclosure of fair value information about financial instruments, whether or not recognized in the statement of financial position, for which it is practicable to estimate that value. The following table details the carrying amount, face amount and fair value of the financial instruments described in Note 3: March 31, 2019 Carrying Value Face Amount Fair Value Assets: Cash and cash equivalents $ 13,640,181 $ 13,640,181 $ 13,640,181 Restricted cash 52,348,987 52,348,987 52,348,987 Commercial mortgage loans held-for-investment 585,770,803 585,770,803 585,770,803 Total $ 651,759,971 $ 651,759,971 $ 651,759,971 Liabilities: Collateralized loan obligations $ 504,460,023 $ 510,181,000 $ 509,101,491 Secured Term Loan 39,300,544 40,250,000 40,250,000 Total $ 543,760,567 $ 550,431,000 $ 549,351,491 December 31, 2018 Carrying Value Face Amount Fair Value Assets: Cash and cash equivalents $ 7,882,862 $ 7,882,862 $ 7,882,862 Restricted cash 51,330,950 51,330,950 51,330,950 Cash held in securitization trusts, at fair value 24,357,335 24,357,335 24,357,335 Commercial mortgage loans held-for-investment 555,172,891 555,172,891 555,172,891 Total $ 638,744,038 $ 638,744,038 $ 638,744,038 Liabilities: Collateralized loan obligations $ 503,978,918 $ 510,181,000 $ 509,000,439 Total $ 503,978,918 $ 510,181,000 $ 509,000,439 Estimates of cash and cash equivalents and restricted cash are measured using quoted market prices, or Level 1 inputs. Estimates of the fair value of collateralized loan obligations are measured using observable, quoted market prices, in active markets, or Level 2 inputs. All other fair value significant estimates are measured using unobservable inputs, or Level 3 inputs. See Note 3 for further discussion regarding fair value measurement of certain of our assets and liabilities. |
RELATED PARTY TRANSACTIONS
RELATED PARTY TRANSACTIONS | 3 Months Ended |
Mar. 31, 2019 | |
Related Party Transactions [Abstract] | |
RELATED PARTY TRANSACTIONS | RELATED PARTY TRANSACTIONS Management Fee The Company is externally managed and advised by the Manager. Pursuant to the terms of the prior management agreement in effect through January 18, 2018, the Company paid the prior 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 meant 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 paid for repurchases of the Company’s common stock since inception, and excluding any unrealized gains, losses or other items that did not affect realized net income (regardless of whether such items were included in other comprehensive income or loss, or in net income). This amount was 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 reduced the Company’s retained earnings at the end of any completed calendar quarter, it would 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. On January 18, 2018, the management agreement in effect for the year ended December 31, 2017 was terminated, and a new management agreement with the Manager became effective. Pursuant to the terms of the new management contract, the Company is required to pay the Manager an annual base management fee of 1.50% of Stockholders' Equity (as defined in the management agreement), payable quarterly ( 0.375% per quarter) in arrears. The definition of stockholders' equity in the new management agreement is materially unchanged from the definition in the prior management agreement. Additionally, starting in the first full calendar quarter following January 18, 2019, the Company is also required to pay the Manager a quarterly incentive fee equal to 20% of the excess of Core Earnings (as defined in the management agreement) over the product of (i) the Stockholders' Equity as of the end of such fiscal quarter, and (ii) 8% per annum. On June 7, 2017, the prior manager agreed to waive a portion equal to 0.75% of its 1.50% management fee on the net proceeds of the June 16, 2017 common stock offering, for the next twelve monthly payments, beginning with the payment due for the month of June 2017. Due to the termination of the previous management agreement with Oak Circle, the fee waiver terminated on January 18, 2018. The net amount of management fee waived from January 1, 2018 to January 18, 2018 was $6,959 . For the three months ended March 31, 2019 , the Company incurred management fees of $ 553,459 (March 31, 2018: $ 576,135 , net of $ 6,959 in management fees waived), recorded as "Management Fee" in the condensed consolidated statement of operations, of which $ 567,000 (March 31, 2018: $ 577,000 ) was accrued but had not been paid, included in "fees and expenses payable to Manager" in the condensed 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, 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. The Manager has agreed to certain limitations on manager expense reimbursement from the Company. On March 18, 2019, the Company entered into a support agreement with the Manager, pursuant to which, the Manager agreed to reduce the reimbursement cap by 25% per annum (subject to such reduction not exceeding $568,000 per annum) until such time as the aggregate support provided thereunder equaled approximately $1.96 million . For the three months ended March 31, 2019 , the Company incurred reimbursable expenses of $ 540,037 (March 31, 2018: $ 746,092 ), recorded as "operating expenses reimbursable to Manager" in the condensed consolidated statement of operations, of which $ 479,436 (March 31, 2018: $ 742,711 ) was accrued but had not yet been paid and included in "fees and expenses payable to Manager" in the condensed consolidated balance sheets. Manager Equity Plan The Company has in place 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 is 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. The following table summarizes the activity related to restricted common stock for the three months ended March 31, 2019 and March 31, 2018 : Three Months Ended March 31, 2019 2019 2018 Shares Weighted Average Grant Date Fair Market Value Shares Weighted Average Grant Date Fair Market Value Outstanding Unvested Shares at Beginning of Period 4,500 $ 3.40 4,500 $ 4.33 Granted — — — — Vested — — — — Outstanding Unvested Shares at End of Period 4,500 $ 3.40 4,500 $ 4.33 For the period ended March 31, 2019 , the Company recognized compensation expense related to restricted common stock of $ 3,773 (2018: $ 4,805 ). The Company has unrecognized compensation expense of $ 4,150 as of March 31, 2019 (2018: $ 10,730 ) for unvested shares of restricted common stock. As of March 31, 2019 , the weighted average period for which the unrecognized compensation expense will be recognized is 3.3 months. MAXEX LLC The Company’s lead independent director is also an independent director of an entity, MAXEX LLC (“ MAXEX ”), with which the Company had 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 March 31, 2018 , the Company received $ 67,325 in fees, net of $ 15,704 in marketing fees paid to MAXEX, relating to its provision to MAXEX of seller eligibility review and backstop services. The Company did not receive any fees from MAXEX for the three months ended March 31, 2019 . Pursuant to an Assumption Agreement dated December 31, 2018, among MAXEX Clearing LLC and FOAC, MAXEX Clearing LLC assumed all of FOAC's obligations under its backstop guarantees and agreed to indemnify and hold FOAC harmless against any losses, liabilities, costs, expenses and obligations under the backstop guarantee. FOAC paid MAXEX Clearing LLC, as the replacement backstop provider, a fee of $ 426,770 . The fees received that were related to seller eligibility review and backstop services were 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. Hunt Finance Company, LLC During the first quarter of 2019, Hunt CRE 2017-FL1, Ltd. purchased three loans with an aggregate unpaid principal balance of $40,820,000 at par and Hunt CRE 2018-FL2 purchased one loan with an unpaid principal balance of $18,000,000 at par from Hunt Finance Company ("HFC"), LLC, an affiliate of our Manager. Hunt Servicing Company, LLC Hunt Servicing Company, LLC, an affiliate of the Manager, was appointed as the sub-servicer to the servicer with respect to mortgage assets for Hunt CRE 2017-FL1, Ltd. and Hunt CRE 2018-FL2, Ltd. by KeyBank in its capacity as servicer of both CLOs. Additionally, Hunt Servicing Company, LLC was appointed by KeyBank as servicer to act as special servicer of any serviced mortgage loan that becomes a specially serviced mortgage loan. |
GUARANTEES
GUARANTEES | 3 Months Ended |
Mar. 31, 2019 | |
Guarantees [Abstract] | |
GUARANTEES | 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 representations and warranties. In July 2016, the Company announced that it would no longer aggregate and securitize residential mortgage loans; however, the Company 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, MAXEX Clearing LLC, formerly known as Central Clearing and Settlement LLC ("MAXEX Clearing LLC"), 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 on August 29, 2016, January 30, 2017 and June 27, 2018, among MAXEX, MAXEX Clearing LLC and FOAC (the "Master Agreement"), FOAC provided seller eligibility review services under which it reviewed, approved and monitored sellers that sold loans via MAXEX Clearing LLC. Once approved, and having signed the standardized loan sale contract, the seller sold loan(s) to MAXEX Clearing LLC, and MAXEX Clearing LLC simultaneously sold loan(s) to the buyer on substantially the same terms including representations and warranties. The Master Agreement was terminated on November 28, 2018 (the "MAXEX Termination Date"). To the extent that a seller approved by FOAC prior to the MAXEX Termination Date failed to honor its obligations to repurchase a loan based on an arbitration finding that it breached its representations and warranties, FOAC was 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 representations and warranties over time is considered unlikely to occur more than five years from the sale of a mortgage. FOAC's obligations to provide further seller eligibility review and backstop guarantee services terminated on the MAXEX Termination Date. Pursuant to an Assumption Agreement dated December 31, 2018, among MAXEX Clearing LLC and FOAC, MAXEX Clearing LLC assumed all of FOAC's obligations under its backstop guarantees and agreed to indemnify and hold FOAC harmless against any losses, liabilities, costs, expenses and obligations under the backstop guarantee. FOAC paid MAXEX Clearing LLC, as the replacement backstop provider, a fee of $426,770 (the "Alternate Backstop Fee"). MAXEX Clearing LLC represented to FOAC in the Assumption Agreement that it (i) is rated at least "A" (or equivalent) by at least one nationally recognized statistical rating agency or (ii) has (a) adjusted tangible net worth of at least $20,000,000 and (b) minimum available liquidity equal to the greater of (x) $5,000,000 and (y) 0.1% multiplied by the scheduled unpaid principal balance of each outstanding loan covered by the backstop guarantees. MAXEX's chief financial officer is required to certify ongoing compliance by MAXEX Clearing LLC with the aforementioned criteria on a quarterly basis and if MAXEX Clearing LLC fails to satisfy such criteria, MAXEX Clearing LLC is required to deposit into an escrow account for FOAC's benefit an amount equal to the greater of (A) the unamortized Alternate Backstop Fee for each outstanding loan covered by the backstop guarantee and (B) the product of 0.01% multiplied by the scheduled unpaid principal balance of each outstanding loan covered by the backstop guarantees. 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 MAXEX Clearing LLC, was estimated to be $1,405,182,222 as of March 31, 2019 and $1,405,182,222 as of December 31, 2018 , although the Company believes this amount is not indicative of the Company's actual potential losses. Amounts payable in excess of the outstanding principal balance of the 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 sale of property securing) the mortgage loan repurchased and, as noted above, MAXEX Clearing LLC has assumed all of FOAC's obligations in respect of its backstop guarantees. 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 to MAXEX. As of March 31, 2019 , the Company was not aware of any circumstances expected to lead to the triggering of a backstop guarantee obligation. See Note 2 for 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 the 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 March 31, 2019 . |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 3 Months Ended |
Mar. 31, 2019 | |
Commitments and Contingencies Disclosure [Abstract] | |
COMMITMENTS AND CONTINGENCIES | COMMITMENTS AND CONTINGENCIES Unfunded Commitments As of March 31, 2019 and December 31, 2018 , the Company had $36.9 million and $16.0 million of unfunded commitments related to loans held in Hunt CRE 2017-FL1, Ltd. These commitments are not reflected on the Company's condensed consolidated balance sheets. As of March 31, 2019 and December 31, 2018 , HFC, an affiliate of the Manager, had $54.3 million and $55.4 million of unfunded commitments related to loans held in Hunt CRE 2018-FL2, Ltd. These commitments are not reflected on the Company's condensed consolidated balance sheets. |
EQUITY
EQUITY | 3 Months Ended |
Mar. 31, 2019 | |
Stockholders' Equity Note [Abstract] | |
EQUITY | and Warrants 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 following adjustment in December 2016, entitled XL Investments Ltd, to purchase an aggregate of 3,753,492 shares of the Company’s common stock at a per share exercise price equal to $13.11 . XL Global, Inc., a indirect subsidiary of AXA SA, held a minority stake in the previous manager. Pursuant to an agreement dated January 18, 2018, XL Investments agreed to terminate all of its previously held warrants to purchase 3,753,492 shares of common stock held by it. Common Stock The Company has 450,000,000 authorized shares of common stock, par value $0.01 per share, with 23,687,664 shares issued and outstanding as of March 31, 2019 and December 31, 2018 , respectively. On January 18, 2018, the Company issued 1,539,406 shares of common stock to an affiliate of the Manager in a private placement at a purchase price of $4.77 per share resulting in aggregate net proceeds of $7.3 million . 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. As of March 31, 2019 , the Company had repurchased 126,856 shares of common stock at a weighted average share price of $5.09 . No share repurchases were made during the three months ended March 31, 2019 . As of March 31, 2019 , $9.4 million of common stock remained authorized for future share repurchase under the Repurchase Program. Preferred Stock The Company had 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 December 31, 2018 . The Series A Preferred Stock was entitled to receive a dividend rate of 8.75% per year on the $25 liquidation preference and was senior to the common stock with respect to distributions upon liquidation, dissolution or winding up. The Company declared quarterly and paid monthly dividends on the shares of the Series A Preferred Stock, in arrears, on the 27th day of each month to holders of record at the close of business on the 15th day of each month. No dividends may be paid on the Company's common stock unless full cumulative dividends have been paid on the preferred stock. The Company paid full cumulative dividends on its preferred stock on a monthly basis since it was first issued in December 2013. On February 14, 2019, the Company redeemed all 1,610,000 shares of its outstanding 8.75% Series A Cumulative Redeemable Preferred Stock at its $25 per share liquidation preference plus accrued and unpaid dividends. Distributions to stockholders For the 2019 taxable year to date, the Company has declared dividends to common stockholders totaling $ 1,658,136 , or $ 0.07 per share. The following table presents cash dividends declared by the Company on its common stock during the three months ended March 31, 2019 : Declaration Date Record Date Payment Date Dividend Amount Cash Dividend Per Weighted Average Share March 18, 2019 March 29, 2019 April 15, 2019 $ 1,658,136 $ 0.07000 The following table presents cash dividends declared by the Company on its Series A Preferred Stock for the three months ended March 31, 2019 : Declaration Date Record Date Payment Date Dividend Amount Cash Dividend Per Weighted Average Share December 7, 2018 January 15, 2019 January 28, 2019 $ 332,626 $ 0.20660 December 7, 2018 February 14, 2019 February 14, 2019 $ 188,488 $ 0.11710 Non-controlling interests On November 29, 2018, Hunt Commercial Mortgage Trust (“HCMT”), an indirect wholly-owned subsidiary of the Company that has elected to be taxed as a REIT issued 125 shares of Series A Preferred Shares (“HCMT Preferred Shares”). Net proceeds to HCMT were $99,500 representing $125,000 in equity raised, less $25,500 in expenses and is reflected as “Non-controlling interests” in the Company’s consolidated balance sheets. Dividends on the HCMT Preferred Shares are cumulative annually, in an amount equal to 12% of the initial purchase price plus any accrued unpaid dividends. The HCMT Preferred Shares are redeemable at any time by HCMT. The redemption price through December 31, 2020 is 1.1x the initial purchase price plus all accrued and unpaid dividends, and the initial purchase price plus all accrued and unpaid dividends thereafter. The holders of the HCMT Preferred Shares have limited voting rights, which do not entitle the holders to participate or otherwise direct the management of HCMT or the Company. The HCMT Preferred Shares are not convertible into or exchangeable for any other property or securities of HCMT or the Company. Dividends on the HCMT Preferred Shares, which amounted to $1,333 for the year ended December 31, 2018 are reflected in “Dividends to preferred stockholders” in the Company’s consolidated statements of operations. As of March 31, 2019 , HCMT had $3,708 in accrued and unpaid dividends on the preferred shares which are reflected in "Dividends payable" in the Company's condensed consolidated balance sheet and in "Dividends to preferred stockholders" in the Company's consolidated statements of operations. |
EARNINGS PER SHARE
EARNINGS PER SHARE | 3 Months Ended |
Mar. 31, 2019 | |
Earnings Per Share [Abstract] | |
EARNINGS PER SHARE | EARNINGS PER SHARE 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 three months ended March 31, 2019 and March 31, 2018 : Three Months Ended March 31, 2019 Three Months Ended March 31, 2018 Net income (loss) $ 1,474,767 $ 11,315,000 Less dividends: Common stock $ 1,658,136 $ 2,314,686 Preferred stock 480,472 880,509 Deemed dividend on preferred stock related to redemption 3,093,028 — 5,231,636 3,195,195 Undistributed earnings (deficit) $ (3,756,869 ) $ 8,119,805 Unvested Share-Based Payment Awards Common Stock Unvested Share-Based Payment Awards Common Stock Distributed earnings $ 0.07 $ 0.07 $ 0.10 $ 0.10 Undistributed earnings (deficit) (0.16 ) (0.16 ) 0.35 0.35 Total $ (0.09 ) $ (0.09 ) $ 0.45 $ 0.45 Pursuant to an agreement dated January 18, 2018, XL investments agreed to terminate all of its previously held warrants to purchase 3,753,492 shares of common stock held by it, and therefore no adjustment was needed for the calculation of diluted earnings per share for the three months ended March 31, 2019 . No adjustment was required for the calculation of diluted earnings per share for the three months March 31, 2018 , for the warrants described in Note 17 because the warrants’ exercise price was greater than the average market price of the common shares for the period, and thereby anti-dilutive. For the three months ended March 31, 2019 the weighted average number of shares of common stock outstanding to calculate the basic and diluted earnings per share was 23,687,664 and for the three months ended March 31, 2018 , the weighted average number of shares of common stock outstanding to calculate the basic and diluted earnings per share was 23,392,387 . |
INCOME TAXES
INCOME TAXES | 3 Months Ended |
Mar. 31, 2019 | |
Income Tax Disclosure [Abstract] | |
INCOME TAXES | INCOME TAXES The Company has elected to be treated as a REIT under federal income tax laws. As a REIT, the Company is generally not subject to federal income taxation at the corporate level to the extent that it distributes 100% of its taxable earnings to shareholders annually and does not engage in prohibited transactions. Certain activities of the Company that produce prohibited income are conducted through a taxable REIT subsidiary ("TRS"), FOAC, to protect REIT election and FOAC is therefore subject to tax as a U.S. C-Corporation. To maintain our REIT election, the Company must continue to meet certain ownership, asset and income requirements set forth in the Code. As further discussed below, the Company may be subject to non-income taxes on excess amounts of assets or income that cause a failure of any of the REIT testing requirements. The following table reconciles the Company’s TRS GAAP net income (loss) to taxable income (in thousands): As of March 31, 2019 As of March 31, 2018 GAAP consolidated net income (loss) attributable to Five Oaks Investment Corp 1,411 12,829 GAAP net loss (income) from REIT operations (1,311 ) (12,559 ) GAAP net income (loss) of taxable subsidiary 100 270 Capitalized transaction fees (10 ) (10 ) Unrealized gain (loss) 380 (50 ) Deferred income — 52 Tax income (loss) of taxable subsidiary before utilization of net operating losses 470 262 Current state tax expense (102 ) — Utilizations of net operating losses (68 ) (262 ) Net tax income of taxable subsidiaries 300 — The TRS has a deferred tax asset, comprised of the following (in thousands): As of March 31, 2019 As of December 31, 2018 Accumulated net operating losses of TRS 297 263 Unrealized (gain) loss 417 245 Capitalized transaction costs 133 112 Deferred tax asset (liability) 847 620 The Company had provided a valuation allowance against its deferred tax assets for the three months ended March 31, 2018 . The Company recorded a 100% valuation allowance related to the TRS net deferred tax asset because it believed it was more likely than not that the deferred tax asset would not be fully realized. During 2018, the TRS reported GAAP earnings of $1.3 million which, when combined with the prior two years of profit and loss, resulted in cumulative GAAP earnings for the prior three years. The history of earnings, combined with the introduction of a new investment at the TRS in the fourth quarter of 2018, results in the Company's determination that, as of March 31, 2019 , it is more likely than not that the Company will realize benefit from its deferred tax assets in subsequent periods. At March 31, 2019 , the TRS had net operating loss carryforwards for federal income tax purposes of $0.95 million , which are available to offset future taxable income and begin expiring in 2034. As of March 31, 2019 , the Company is not aware of any material uncertain tax positions, but the Company could be subject to federal and state income taxes for its open tax years of 2016, 2017 and 2018. REIT Testing and Tax on 75% Income Test Failure During tax years 2017 and 2018 the Company passed all the requisite ownership, asset and income tests, with the exception of the 2018 test under Section 856(c)(3) of the Code, also known as the 75% Income Test. The 75% Income Test required that at least 75% of the gross income earned by the Company be generated by qualifying real estate income, including interest income on mortgages and realized gain on the sale of real estate assets. In our case, the gains generated by the asset protection hedging strategy resulting from the complete dissolution of the MBS asset portfolio during 2018 were determined to be non-qualified income for the purpose of the 75% Income Test and resulted in a failure of the 75% Income Test for the year-ended December 31, 2018. As a result, the Company also owed an income tax on the amount of the gross income that exceeded the 75% Income Test threshold. The calculation of the tax under Section 857(b)(5) of the Code resulted in an accrued tax liability of $1.96 million for 2018, which is reflected as part of the "(Provision for) benefit from income taxes" in the Company's condensed consolidated statements of operations and "Other accounts payable and accrued expenses" in the Company's condensed consolidated balance sheets. The Company believes it more likely than not that our REIT election will not be impacted in the current or future periods. On April 12, 2019, in connection with filing its 2018 tax extensions, the Company paid the $1.96 million tax liability associated with the failure of the 75% gross income test. |
SEGMENT REPORTING
SEGMENT REPORTING | 3 Months Ended |
Mar. 31, 2019 | |
Segment Reporting [Abstract] | |
SEGMENT REPORTING | SEGMENT REPORTING The Company invests in a portfolio comprised of commercial mortgage loans and other mortgage-related investments, and operates as a single reporting segment. |
SUBSEQUENT EVENTS
SUBSEQUENT EVENTS | 3 Months Ended |
Mar. 31, 2019 | |
Subsequent Events [Abstract] | |
SUBSEQUENT EVENTS | eviewed subsequent events occurring through the date that these condensed consolidated financial statements were issued, and determined that no subsequent events occurred that would require accrual or additional disclosure. |
SUMMARY OF SIGNIFICANT ACCOUN_2
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 3 Months Ended |
Mar. 31, 2019 | |
Accounting Policies [Abstract] | |
Basis of Presentation | Basis of Presentation The condensed consolidated balance sheet as of December 31, 2018 , has been derived from audited financial statements. The condensed consolidated balance sheet as of March 31, 2019 , the condensed consolidated statements of operations and the condensed consolidated statements of comprehensive income (loss), for the three months ended March 31, 2019 , and for the three months ended March 31, 2018 , the condensed consolidated statement of stockholders’ equity for the three months ended March 31, 2019 , and the condensed consolidated statements of cash flows for the three months ended March 31, 2019 , and the three months ended March 31, 2018 , are unaudited. The unaudited condensed consolidated financial statements and related notes have been prepared in accordance with GAAP for interim financial reporting and the instructions to Form 10-Q and Rule 10-01 of Regulation S-X. Accordingly, certain information and note disclosures normally included in the financial statements prepared under GAAP have been condensed or omitted. In the opinion of management, all adjustments considered necessary for a fair presentation of the Company’s financial position, results of operations and cash flows have been included and are of a normal and recurring nature. The operating results presented for interim periods are not necessarily indicative of the results that may be expected for any other interim period or for the entire year. These condensed consolidated financial statements should be read in conjunction with the Company’s financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2018 , which was filed with the Securities and Exchange Commission (“SEC”) on March 18, 2019. |
Principles of Consolidation | Principles of Consolidation The accompanying condensed 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 | 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. During the second quarter of 2018, the Company sold the first-loss securities of the Re-REMIC related to the FREMF 2011-K13 Trust, and as a result, having determined it is no longer the primary beneficiary of the trust, no longer consolidates the assets, liabilities, income and expenses of that trust. Additionally, during the second quarter of 2018, the Company sold the first-loss and subordinated tranches issued by the CSMC 2014-OAK1 Trust, and as a result, having determined it is no longer the primary beneficiary of the trust, no longer consolidates the assets, liabilities, income and expenses of the underlying trust. In the first quarter of 2019, the first-loss tranche of the Re-REMIC related to the FREMF 2012-KF01 Trust was redeemed, and as a result, having determined the Company is no longer the primary beneficiary of that trust, no longer consolidates the assets, liabilities, income and expense of the trust. |
Use of Estimates | 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 and Restricted Cash | Cash and Cash Equivalents and Restricted Cash 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. The following table provides a reconciliation of cash, cash equivalents and restricted cash reported within the condensed consolidated balance sheets that sum to the total of the same amounts shown in the statements of cash flows. March 31, 2019 December 31, 2018 Cash and cash equivalents $ 13,640,181 $ 7,882,862 Restricted cash CRE 2017-FL1, Ltd. 43,193,321 24,085,890 Restricted cash CRE 2018-FL2, Ltd. $ 9,155,666 $ 27,245,060 Total cash, cash equivalents and restricted cash $ 65,989,168 $ 59,213,812 Restricted cash includes cash held within Hunt CRE 2017-FL1, Ltd. and Hunt CRE 2018-FL2, Ltd. for purposes of reinvestment in qualifying commercial mortgage loans. |
Deferred Income | Deferred Income Previously, certain service revenues received in the period were recorded as a liability in the Company’s condensed consolidated balance sheets in the line item “Deferred income”, for subsequent recognition as income in the Company’s condensed consolidated statements of operations in the line item "Other income".. |
Deferred Offering Costs | 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. |
Commercial Mortgage Loans Held-For-Investment | Commercial Mortgage Loans Held-for-Investment Commercial mortgage loans held-for-investment represent floating-rate transitional loans and other commercial mortgage loans purchased by the Company. These loans include loans sold into securitizations that the Company consolidates. Commercial mortgage loans held-for-investment are intended to be held-to-maturity and, accordingly, are carried at their unpaid principal balances, adjusted for net unamortized loan fees and costs (in respect of originated loans), premiums and discounts (in respect of purchased loans) and impairment, if any. Interest income is recognized as revenue using the effective interest method and is recorded on the accrual basis according to the terms of the underlying loan agreement. Any fees, premiums and discounts associated with these loan investments are recorded over the term of the loan using the effective interest method, or on a straight line basis when it approximates the effective interest method. Income accrual is generally suspended and loans are placed on non-accrual status on the earlier of the date at which payment has become 90 days past due or when full and timely collection of interest and principal is considered not probable. The Company may return a loan to accrual status when repayment of principal and interest is reasonably assured under the terms of the underlying loan agreement. As of March 31, 2019 , the Company did not hold any loans placed on non-accrual status. Quarterly, the Company assesses the risk factors of each loan classified as held-for-investment and assigns a risk rating based on a variety of factors, including, without limitation, debt-service coverage ratios ("DSCR"), loan-to-value ratio ("LTV"), property type, geographic and local market dynamics, physical condition, leasing and tenant profile, adherence to business plan and exit plan, maturity default risk and project sponsorship. Based on a 5-point scale, our loans are rated "1" through "5", from least risk to greatest risk, respectively, which ratings are described as follows: 1. Very Low Risk: exceeds expectations, outperforming underwriting 2. Low Risk: meeting expectations 3. Moderate Risk: a loss unlikely due to value and other indicators 4. High Risk: potential risk of default, a loss may occur in the event of default 5. Default Risk: imminent risk of default, a loss is likely in the event of default The Company evaluates each loan classified as held-for-investment which has High Risk or above rating for impairment on a quarterly basis. Impairment occurs when the Company determines that the facts and circumstances of the loan deem it probable that the Company will not be able to collect all amounts due in accordance with the contractual terms of the loan. If a loan is considered to be impaired, an allowance is recorded to reduce the carrying value of the loan through a charge to the provision for loan losses. Impairment of these loans, which are collateral dependent, is measured by comparing the estimated fair value of the underlying collateral, less costs to sell, to the book value of the respective loan. These valuations require significant judgments, which include assumptions regarding capitalization rates, leasing, creditworthiness of major tenants, occupancy rates, availability of financing, exit plan, actions of other lenders, and other factors deemed necessary by the Manager. Actual losses, if any, could ultimately differ from estimated losses. |
Multi-Family and Residential Mortgage Loans Held in Securitization Trusts | Multi-Family and Residential Mortgage Loans Held in Securitization Trusts Multi-family and residential mortgage loans held in consolidated securitization trusts were comprised of multi-family mortgage loans held in the FREMF 2011-K13 Trust and the FREMF 2012-KF01Trust, and residential mortgage loans held in the CSMC 2014-OAK1. Based on a number of factors, the Company determined it was the primary beneficiary of the VIE underlying the trust, met the criteria for consolidation and, accordingly, consolidated the trust, including its assets, liabilities, income and expenses in its financial statements. The Company 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. The Company sold the subordinated securities of the FREMF 2011-K13 Trust on May 18, 2018 and the CSMC 2014-OAK1 Trust on June 18, 2018, and having determined that it was no longer the primary beneficiary of either trust as of those dates, the Company no longer consolidated either trust as of those dates. Additionally, in the first quarter of 2019, the first-loss tranche of the re-REMIC related to the FREMF 2012-KF01 Trust paid-in full, and as a result, having determined the Company is no longer the primary beneficiary of the trust, no longer consolidates the assets, liabilities, income and expense of the trust. Interest income on multi-family and residential mortgage loans held in securitization trusts was recognized at the loan coupon rate. Interest income recognition was suspended when mortgage loans were placed on non-accrual status. The accrual of interest on loans was discontinued when, in management’s opinion, the interest was considered non-collectible, and in all cases when payment became greater than 90 days past due. Loans returned to accrual status when principal and interest became current and were anticipated to be fully collectible. |
Repurchase Agreements | Repurchase Agreements The Company previously financed the acquisition of certain of its mortgage-backed securities through the use of repurchase agreements. Our repurchase agreements were generally short-term debt, which expired 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 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. |
Collateralized Loan Obligations | Collateralized Loan Obligations Collateralized loan obligations represent third-party liabilities of Hunt CRE 2017-FL1, Ltd. and Hunt CRE 2018-FL2, Ltd. (the "CLOs"). The CLOs are VIEs that the Company has determined it is the primary beneficiary and accordingly they are consolidated in the Company's financial statements, excluding liabilities of the CLOs acquired by the Company that are eliminated on consolidation. The third-party obligations of the CLOs do not have any recourse to the Company as the consolidator of the CLOs. Collateralized loan obligations are carried at their outstanding unpaid principal balances, net of any unamortized discounts or deferred financing costs. Any premiums and discounts or deferred financing costs associated with these liabilities are amortized to interest expense using the effective interest method over the expected average life of the related obligations, or on a straight line basis when it approximates the effective interest method. |
Multi-Family and Residential Securitized Debt Obligations | Multi-Family and Residential Securitized Debt Obligations Multi-family and residential securitized debt obligations represented third-party liabilities of the FREMF 2011-K13 Trust, FREMF 2012-KF01 Trust and CSMC 2014-OAK1 Trust, and excluded the liabilities of the trust acquired by the Company that were eliminated on consolidation. The third-party obligations of the trust did not have any recourse to the Company as the consolidator of each trust. As of March 31, 2019 the Company no longer had any multi-family securitized debt obligations outstanding and as of March 31, 2019 and December 31, 2018 , respectively, the Company no longer had any residential securitized debt obligations outstanding. |
Backstop Guarantees | Backstop Guarantees The Company, through FOAC and in return for fees, provides seller eligibility and backstop guarantee services in respect of residential mortgage loans that are traded through one or more loan exchanges operated by MAXEX LLC (“MAXEX”). On June 27, 2018, FOAC entered into an amendment with MAXEX pursuant to which, amongst other things, FOAC's obligations to provide such seller eligibility and backstop guarantee services terminated at 11:59 p.m. (Eastern Standard Time) on December 31, 2018 or sooner, at MAXEX's option. 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 recognized 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. |
Income Taxes | 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. A REIT is generally taxable as a U.S. C-Corporation; however, so long as the Company qualifies as a REIT it is entitled to a special deduction for dividends paid to shareholders not otherwise available to corporations. Accordingly, the Company generally will not be subject to U.S. federal income tax to the extent its distributions to stockholders equals, or exceeds, its REIT taxable income for the year. In addition, the Company must continue to meet certain REIT qualification requirements with respect to distributions, as well as certain asset, income and share ownership tests, in accordance with Sections 856 through 860 of the Code, as summarized below. In addition, the TRS is maintained to perform certain services and earn income for the Company that would potentially disqualify the Company from qualifying as a REIT. To maintain its qualification as a REIT, the Company must meet certain requirements (including but not limited to the following: (i) distribute at least 90% of its REIT taxable income to its stockholders; (ii) invest at least 75% of its assets in REIT qualifying assets, with additional restrictions with respect to asset concentration risk; and (iii) earn at least 95% of its gross income from qualifying sources of income, including at least 75% from qualifying real estate and real estate related sources. Regardless of the REIT election, 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 as a U.S. C-Corporation, which could have a material adverse impact on its results of operations and amounts available for distributions to its stockholders. The Company has met the requisite ownership, asset and income tests, with the exception of the 2018 75% gross income test. The failure of the 75% gross income test was a result of gains generated from termination of hedges associated with the disposition of the Agency RMBS portfolio during 2018. The Company accrued a tax liability of $1.96 million as of December 31, 2018 as a result of its failure of the 75% gross income test. On April 12, 2019, in connection with filing its 2018 tax extensions, the Company paid the $1.96 million tax liability associated with the failure of the 75% gross income test. 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. 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. The TRS is not subject to a distribution requirement with respect to its REIT owner. The TRS may retain earnings annually, resulting in an increase in the consolidated book equity of the Company and without a corresponding distribution requirement by the REIT. If the TRS generates net income, and declares dividends to the Company, such dividends will be included in its taxable income and necessitate a distribution to its stockholders in accordance with the REIT distribution requirements. |
Earnings per Share | 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 18 for details of the computation of basic and diluted earnings per share. |
Stock-Based Compensation | 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 (Loss) Attributable to Common Stockholders | Comprehensive Income (Loss) Attributable to Common Stockholders Comprehensive income (loss) is comprised of net income (loss), 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 (loss) and dividends paid to preferred stockholders. |
Recently Issued and/or Adopted Accounting Standards | Recently Issued and/or Adopted Accounting Standards 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 is effective for fiscal years beginning after December 15, 2019, including interim periods within those fiscal years. The Company continues to assess the impact of this guidance. Fair Value Measurement In August 2018, the FASB issued ASU 2018-13, which amends ASC topic 820, Fair Value Measurement, to reduce the disclosure requirements for fair value measurements. The amendments of ASU 2018-13 remove the requirements to disclose transfers between Levels 1 and 2 of the fair value hierarchy, the policy for the timing of transfers between levels of the fair value hierarchy and the valuation process for Level 3 fair value measurements. ASU 2018-13 is effective for all entities for fiscal years and interim periods within those fiscal years beginning after December 15, 2019. Early adoption is permitted upon issuance of the ASU. Early adoption of this ASU was applied, which did not have a material impact on the Company's financial condition or results of operations.. |
SUMMARY OF SIGNIFICANT ACCOUN_3
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Accounting Policies [Abstract] | |
Reconciliation of Cash, Cash Equivalents and Restricted Cash | The following table provides a reconciliation of cash, cash equivalents and restricted cash reported within the condensed consolidated balance sheets that sum to the total of the same amounts shown in the statements of cash flows. March 31, 2019 December 31, 2018 Cash and cash equivalents $ 13,640,181 $ 7,882,862 Restricted cash CRE 2017-FL1, Ltd. 43,193,321 24,085,890 Restricted cash CRE 2018-FL2, Ltd. $ 9,155,666 $ 27,245,060 Total cash, cash equivalents and restricted cash $ 65,989,168 $ 59,213,812 |
Reconciliation of Cash, Cash Equivalents and Restricted Cash | The following table provides a reconciliation of cash, cash equivalents and restricted cash reported within the condensed consolidated balance sheets that sum to the total of the same amounts shown in the statements of cash flows. March 31, 2019 December 31, 2018 Cash and cash equivalents $ 13,640,181 $ 7,882,862 Restricted cash CRE 2017-FL1, Ltd. 43,193,321 24,085,890 Restricted cash CRE 2018-FL2, Ltd. $ 9,155,666 $ 27,245,060 Total cash, cash equivalents and restricted cash $ 65,989,168 $ 59,213,812 |
AVAILABLE-FOR-SALE SECURITIES (
AVAILABLE-FOR-SALE SECURITIES (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Investments, Debt and Equity Securities [Abstract] | |
Summary of Net Realized Gain (Loss) From the Sale of AFS Securities | The following table presents a summary of the Company’s net realized gain (loss) from the sale of AFS securities for the three months ended March 31, 2018 : Three Months Ended AFS securities sold, at cost $ 147,058,544 Proceeds from AFS securities sold $ 144,210,537 Net realized gain (loss) on sale of AFS securities $ (2,848,007 ) |
Components of Interest Income on AFS Securities | The following table presents components of interest income on the Company’s AFS securities for the three months ended March 31, 2018 : Three Months Ended March 31, 2018 Coupon interest Net (premium amortization)/ discount accretion Interest income Agency $ 8,323,342 $ (1,275,855 ) $ 7,047,487 Multi-Family — 32,103 32,103 Total $ 8,323,342 $ (1,243,752 ) $ 7,079,590 |
COMMERCIAL MORTGAGE LOANS HEL_2
COMMERCIAL MORTGAGE LOANS HELD-FOR-INVESTMENT COMMERCIAL MORTGAGE LOANS HELD-FOR-INVESTMENT (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Receivables [Abstract] | |
Summary of Commercial Mortgage Loans | The following tables summarize certain characteristics of the Company's investments in commercial mortgage loans as of March 31, 2019 and December 31, 2018 : Weighted Average Loan Type Unpaid Principal Balance Carrying Value Loan Count Floating Rate Loan % Coupon (1) Life (Years) (2) March 31, 2019 Loans held-for-investment Senior secured loans (3) $ 585,770,803 $ 585,770,803 45 100.0 % 6.5 % 4.0 585,770,803 585,770,803 45 100.0 % 6.5 % 4.0 Weighted Average Loan Type Unpaid Principal Balance Carrying Value Loan Count Floating Rate Loan % Coupon (1) Life (Years) (2) December 31, 2018 Loans held-for-investment Senior secured loans (3) $ 555,172,891 $ 555,172,891 44 100.0 % 6.4 % 4.1 555,172,891 555,172,891 44 100.0 % 6.4 % 4.1 (1) Average weighted by unpaid principal balance of loan. Weighted average coupon assumes applicable one-month LIBOR rate as of March 31, 2019 and December 31, 2018 . (2) The weighted average life of each loan is based on the expected repayment of principal assuming all extension options are exercised by the borrower. (3) As of March 31, 2019 , $581,878,684 of the outstanding senior secured loans were held in VIEs and $3,892,119 of the outstanding senior secured are held outside VIEs. As of December 31, 2018 , $550,555,503 of the outstanding senior secured loans were held in VIEs and $4,617,388 of the outstanding senior secured loans were held outside VIEs. Activity: For the three months ended March 31, 2019 , the loan portfolio activity was as follows: Commercial Mortgage Loans Held-for-Investment Balance at December 31, 2018 $ 555,172,891 Purchases 64,612,349 Proceeds from principal repayments (34,014,437 ) Balance at March 31, 2019 $ 585,770,803 The table below sets forth additional information relating to the Company's portfolio as of March 31, 2019 : Loan # Form of Investment Origination Date Total Loan Commitment (1) Unpaid Principal Balance Location Property Type Coupon Max Remaining Term (Years) LTV (2) 1 Senior Loan 12-Jun-17 4,675,000 4,675,000 Winston-Salem, NC Multi-Family 1mL + 6.0% 1.3 77.2 % 2 Senior Loan 5-Nov-15 5,535,000 5,535,000 Pascagoula, MS Multi-Family 1mL + 4.5% 1.7 72.9 % 3 Senior Loan 11-Oct-17 6,370,000 6,370,000 New Orleans, LA Multi-Family 1mL + 4.1% 3.7 75.5 % 4 Senior Loan 13-Oct-17 14,715,000 14,715,000 Hattiesburg, MS Multi-Family 1mL + 4.8% 3.7 78.4 % 5 Senior Loan 9-Jan-18 10,317,000 9,518,294 North Highlands, CA Multi-Family 1mL + 4.0% 3.9 79.0 % 6 Senior Loan 16-Jun-17 5,634,482 5,543,885 Dallas, TX Multi-Family 1mL + 4.8% 3.3 75.2 % 7 Senior Loan 15-Nov-17 30,505,000 30,505,000 Phoenix, AZ Multi-Family 1mL + 3.8% 3.8 74.3 % 8 Senior Loan 30-Nov-16 5,000,000 4,675,039 Stafford, TX Office 1mL + 5.5% 2.8 56.4 % 9 Senior Loan 29-Sep-17 12,364,000 11,950,194 Austell, GA Multi-Family 1mL + 4.2% 3.6 80.4 % 10 Senior Loan 29-Jun-16 8,882,738 8,882,738 Various, TX Multi-Family 1mL + 5.5% 0.3 69.2 % 11 Senior Loan 1-Dec-17 19,110,000 19,110,000 Tuscon, AZ Multi-Family 1mL + 4.5% 3.8 80.3 % 12 Senior Loan 8-Aug-18 35,000,000 31,939,667 Dallas, TX Multi-Family 1mL + 3.7% 4.4 81.2 % 13 Senior Loan 27-Dec-17 7,600,000 7,600,000 Philadelphia, PA Multi-Family 1mL + 4.1% 3.8 79.8 % 14 Senior Loan 9-Jul-18 33,830,000 29,338,307 Baltimore, MD Multi-Family 1mL + 3.1% 4.4 77.6 % 15 Senior Loan 9-Oct-18 9,250,000 8,511,430 Dallas, TX Multi-Family 1mL + 3.7% 4.7 78.4 % 16 Senior Loan 10-Oct-18 3,569,150 2,788,015 Philadelphia, PA Multi-Family 1mL + 4.6% 4.7 79.6 % 17 Senior Loan 30-Nov-18 72,000,000 33,000,000 Various Multi-Family 1mL + 4.1% 4.8 70.4 % 18 Senior Loan 6-Dec-18 21,000,000 17,448,900 Greensboro, NC Multi-Family 1mL + 3.4% 4.8 79.8 % 19 Senior Loan 13-Dec-18 17,000,000 17,000,000 Seattle, WA Multi-Family 1mL + 3.8% 2.8 53.7 % 20 Senior Loan 18-Jan-19 10,750,000 7,958,000 Philadelphia, PA Multi-Family 1mL + 4.0% 4.9 71.3 % 21 Senior Loan 28-Dec-18 24,123,000 17,000,000 Austin, TX Retail 1mL + 4.1% 4.8 60.5 % 22 Senior Loan 13-Mar-19 19,360,000 15,862,000 Barytown, TX Multi-Family 1mL + 3.1% 5.1 80.5 % 23 Senior Loan 5-Jun-18 50,858,145 35,625,000 Palatine, IL Multi-Family 1mL + 4.3% 4.3 68.5 % 24 Senior Loan 18-May-18 28,000,000 25,355,116 Woodridge, IL Multi-Family 1mL + 3.8% 4.3 76.4 % 25 Senior Loan 29-Nov-17 22,500,000 22,500,000 Richmond, TX Multi-Family 1mL + 3.9% 1.8 73.5 % 26 Senior Loan 31-May-18 24,700,000 19,430,000 Omaha, NE Multi-Family 1mL + 3.7% 4.3 77.3 % 27 Senior Loan 28-Jun-18 17,000,000 14,800,000 Greenville, SC Multi-Family 1mL + 3.9% 4.3 76.3 % 28 Senior Loan 26-Mar-18 19,235,000 14,212,713 Rochelle Park, NJ Office 1mL + 4.0% 4.1 76.8 % 29 Senior Loan 1-Feb-18 14,320,000 12,920,000 Fresno, CA Multi-Family 1mL + 3.9% 3.9 82.4 % 30 Senior Loan 23-Jul-18 16,200,000 12,432,514 Chicago, IL Office 1mL + 3.8% 4.4 72.7 % 31 Senior Loan 24-May-18 12,720,000 11,323,290 Austin, TX Multi-Family 1mL + 3.6% 4.3 80.2 % 32 Senior Loan 25-May-18 11,000,000 9,440,000 Phoenix, AZ Multi-Family 1mL + 3.9% 4.3 69.4 % 33 Senior Loan 12-Mar-18 9,112,000 9,112,000 Waco, TX Multi-Family 1mL + 4.8% 4.1 78.3 % 34 Senior Loan 15-Feb-18 10,500,000 8,708,582 Atlanta, GA Multi-Family 1mL + 4.3% 4.0 80.2 % 35 Senior Loan 23-Feb-18 8,070,000 8,070,000 Little Rock, AR Multi-Family 1mL + 4.3% 4.0 81.3 % 36 Senior Loan 30-Aug-18 9,034,000 8,000,000 Blacksburg, VA Multi-Family 1mL + 3.9% 4.5 66.6 % 37 Senior Loan 7-Aug-18 9,000,000 8,053,748 Birmingham, AL Multi-Family 1mL + 3.5% 4.5 78.0 % 38 Senior Loan 4-Apr-18 7,332,000 6,874,000 Little Rock, AR Office 1mL + 4.9% 4.1 72.4 % 39 Senior Loan 2-Aug-18 10,000,000 6,860,637 Goldsboro, NC Retail 1mL + 4.0% 4.4 56.5 % 40 Senior Loan 9-Nov-17 6,647,000 5,547,000 Las Vegas, NV Self-Storage 1mL + 4.3% 3.8 76.0 % 41 Senior Loan 22-Jun-18 6,200,000 5,667,487 Chicago, IL Multi-Family 1mL + 4.1% 4.3 80.5 % 42 Senior Loan 29-Jun-18 4,525,000 4,404,365 Washington, DC Mixed Use 1mL + 4.7% 4.3 73.3 % 43 Senior Loan 30-Apr-18 4,080,000 3,793,542 Wichita, KS Multi-Family 1mL + 5.0% 4.2 69.0 % 44 Senior Loan 30-Nov-18 8,250,000 4,714,340 Decatur, GA Office 1mL + 4.1% 4.7 56.8 % 45 Senior Loan 28-Dec-18 20,850,000 18,000,000 Austin, TX Retail 1mL + 3.9% 4.8 71.4 % (1) See Note 16 Commitments and Contingencies for further discussion of unfunded commitments. (2) LTV as of the date the loan was originated by a Hunt affiliate and is calculated after giving effect to capex and earnout reserves, if applicable. LTV has not been updated for any subsequent draws or loan modifications and is not reflective of any changes in value, which may have occurred subsequent to the origination date. |
Summary of Loan Risk Ratings | The following tables present the principal balance and net book value of the loan portfolio based on the Company's internal risk ratings as of March 31, 2019 and December 31, 2018 : March 31, 2019 Risk Rating Number of Loans Unpaid Principal Balance Net Carrying Value 1 — $ — — 2 7 63,522,869 63,522,869 3 34 483,865,447 483,865,447 4 4 38,382,487 38,382,487 5 — — — 45 $ 585,770,803 585,770,803 As of March 31, 2019 , the average risk rating of the commercial mortgage loan portfolio was 2.9 (Moderate Risk), weighted by investment carrying value, with 90.9% of commercial loans held-for-investment rated 3 (Moderate Risk) or better by the Company's Manager. December 31, 2018 Risk Rating Number of Loans Unpaid Principal Balance Net Carrying Value 1 — $ — — 2 5 51,589,000 51,589,000 3 34 455,323,082 455,323,082 4 5 48,260,809 48,260,809 5 — — — 44 $ 555,172,891 555,172,891 As of December 31, 2018 , the average risk rating of the commercial mortgage loan portfolio was 2.9 (Moderate Risk), weighted by investment carrying value, with 91.3% of commercial loans held-for-invested rated 3 (Moderate Risk) or better by the Company's Manager. |
Geographic Concentrations | The following tables present the geographic and property types of collateral underlying the Company's commercial mortgage loans as a percentage of the loans' carrying value as of March 31, 2019 and December 31, 2018 : Loans Held-for-Investment March 31, 2019 December 31, 2018 Geography Southwest 36.3 % 30.2 % South 21.6 22.6 Midwest 17.5 20.2 Mid-Atlantic 11.3 10.3 West 7.7 10.8 Various 5.6 5.9 Total 100.0 % 100.0 % March 31, 2019 December 31, 2018 Collateral Property Type Multi-Family 83.8 % 87.2 % Office 7.3 7.6 Retail 7.2 1.2 Self-Storage 0.9 1.0 Mixed-Use 0.8 3.0 Total 100.0 % 100.0 % |
THE FREMF TRUSTS (Tables)
THE FREMF TRUSTS (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Condensed Consolidated Balance Sheets of the FREMF trusts | The condensed consolidated balance sheets of the FREMF trusts at December 31, 2018 are set out below: Balance Sheets December 31, 2018 Assets Multi-family mortgage loans held in securitization trusts $ — Receivables 24,357,335 Total assets $ 24,357,335 Liabilities and Equity Multi-family securitized debt obligations $ 19,231,331 Payables 363,855 Total liabilities $ 19,595,186 Equity 4,762,149 Total liabilities and equity $ 24,357,335 |
Condensed Consolidated Statements of Operations of the FREMF Trusts | The condensed consolidated statements of operations of the FREMF trusts for the three months ended March 31, 2019 and March 31, 2018 are as follows: Statements of Operations Three Months Ended Three Months Ended Interest income $ 78,361 $ 13,227,188 Interest expense — 12,526,295 Net interest income $ 78,361 $ 700,893 General and administrative fees — (623,254 ) Unrealized gain (loss) on multi-family loans held in securitization trusts 694,339 (1,355,774 ) Net income (loss) $ 772,700 $ (1,278,135 ) |
RESIDENTIAL MORTGAGE LOAN SEC_2
RESIDENTIAL MORTGAGE LOAN SECURITIZATION TRUSTS (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Variable Interest Entity [Line Items] | |
Condensed Consolidated Statements of Operations | The condensed consolidated statements of operations of the FREMF trusts for the three months ended March 31, 2019 and March 31, 2018 are as follows: Statements of Operations Three Months Ended Three Months Ended Interest income $ 78,361 $ 13,227,188 Interest expense — 12,526,295 Net interest income $ 78,361 $ 700,893 General and administrative fees — (623,254 ) Unrealized gain (loss) on multi-family loans held in securitization trusts 694,339 (1,355,774 ) Net income (loss) $ 772,700 $ (1,278,135 ) |
Residential mortgage loans | |
Variable Interest Entity [Line Items] | |
Condensed Consolidated Statements of Operations | The condensed consolidated statements of operations of the residential mortgage loan securitization trusts for the three months ended March 31, 2018 are as follows: Statements of Operations Three Months Ended Interest income $ 1,147,641 Interest expense 920,057 Net interest income $ 227,584 General and administrative fees (6,928 ) Unrealized gain (loss) on residential loans held in securitization trusts (255,403 ) Net income (loss) $ (34,747 ) |
USE OF SPECIAL PURPOSE ENTITI_2
USE OF SPECIAL PURPOSE ENTITIES AND VARIABLE INTEREST ENTITIES USE OF SPECIAL PURPOSE ENTITIES AND VARIABLE INTEREST ENTITIES (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Variable Interest Entity [Line Items] | |
Condensed Consolidated Balance Sheets | The condensed consolidated balance sheets of the FREMF trusts at December 31, 2018 are set out below: Balance Sheets December 31, 2018 Assets Multi-family mortgage loans held in securitization trusts $ — Receivables 24,357,335 Total assets $ 24,357,335 Liabilities and Equity Multi-family securitized debt obligations $ 19,231,331 Payables 363,855 Total liabilities $ 19,595,186 Equity 4,762,149 Total liabilities and equity $ 24,357,335 |
Summary of Loan and Borrowing Characteristics | COMMERCIAL MORTGAGE LOANS HELD-FOR-INVESTMENT The following tables summarize certain characteristics of the Company's investments in commercial mortgage loans as of March 31, 2019 and December 31, 2018 : Weighted Average Loan Type Unpaid Principal Balance Carrying Value Loan Count Floating Rate Loan % Coupon (1) Life (Years) (2) March 31, 2019 Loans held-for-investment Senior secured loans (3) $ 585,770,803 $ 585,770,803 45 100.0 % 6.5 % 4.0 585,770,803 585,770,803 45 100.0 % 6.5 % 4.0 Weighted Average Loan Type Unpaid Principal Balance Carrying Value Loan Count Floating Rate Loan % Coupon (1) Life (Years) (2) December 31, 2018 Loans held-for-investment Senior secured loans (3) $ 555,172,891 $ 555,172,891 44 100.0 % 6.4 % 4.1 555,172,891 555,172,891 44 100.0 % 6.4 % 4.1 (1) Average weighted by unpaid principal balance of loan. Weighted average coupon assumes applicable one-month LIBOR rate as of March 31, 2019 and December 31, 2018 . (2) The weighted average life of each loan is based on the expected repayment of principal assuming all extension options are exercised by the borrower. (3) As of March 31, 2019 , $581,878,684 of the outstanding senior secured loans were held in VIEs and $3,892,119 of the outstanding senior secured are held outside VIEs. As of December 31, 2018 , $550,555,503 of the outstanding senior secured loans were held in VIEs and $4,617,388 of the outstanding senior secured loans were held outside VIEs. Activity: For the three months ended March 31, 2019 , the loan portfolio activity was as follows: Commercial Mortgage Loans Held-for-Investment Balance at December 31, 2018 $ 555,172,891 Purchases 64,612,349 Proceeds from principal repayments (34,014,437 ) Balance at March 31, 2019 $ 585,770,803 Loan Risk Ratings: As further described in Note 2, the Company evaluates the commercial mortgage loan portfolio on a quarterly basis. In conjunction with the quarterly commercial mortgage loan portfolio review, the Company assesses the risk factors of each loan, and assigns a risk rating based on a variety of factors. Loans are rated "1" (very low risk) through "5" (default risk), which are described in Note 2. The following tables present the principal balance and net book value of the loan portfolio based on the Company's internal risk ratings as of March 31, 2019 and December 31, 2018 : March 31, 2019 Risk Rating Number of Loans Unpaid Principal Balance Net Carrying Value 1 — $ — — 2 7 63,522,869 63,522,869 3 34 483,865,447 483,865,447 4 4 38,382,487 38,382,487 5 — — — 45 $ 585,770,803 585,770,803 As of March 31, 2019 , the average risk rating of the commercial mortgage loan portfolio was 2.9 (Moderate Risk), weighted by investment carrying value, with 90.9% of commercial loans held-for-investment rated 3 (Moderate Risk) or better by the Company's Manager. December 31, 2018 Risk Rating Number of Loans Unpaid Principal Balance Net Carrying Value 1 — $ — — 2 5 51,589,000 51,589,000 3 34 455,323,082 455,323,082 4 5 48,260,809 48,260,809 5 — — — 44 $ 555,172,891 555,172,891 As of December 31, 2018 , the average risk rating of the commercial mortgage loan portfolio was 2.9 (Moderate Risk), weighted by investment carrying value, with 91.3% of commercial loans held-for-invested rated 3 (Moderate Risk) or better by the Company's Manager. Concentration of Credit Risk: The following tables present the geographic and property types of collateral underlying the Company's commercial mortgage loans as a percentage of the loans' carrying value as of March 31, 2019 and December 31, 2018 : Loans Held-for-Investment March 31, 2019 December 31, 2018 Geography Southwest 36.3 % 30.2 % South 21.6 22.6 Midwest 17.5 20.2 Mid-Atlantic 11.3 10.3 West 7.7 10.8 Various 5.6 5.9 Total 100.0 % 100.0 % March 31, 2019 December 31, 2018 Collateral Property Type Multi-Family 83.8 % 87.2 % Office 7.3 7.6 Retail 7.2 1.2 Self-Storage 0.9 1.0 Mixed-Use 0.8 3.0 Total 100.0 % 100.0 % The table below sets forth additional information relating to the Company's portfolio as of March 31, 2019 : Loan # Form of Investment Origination Date Total Loan Commitment (1) Unpaid Principal Balance Location Property Type Coupon Max Remaining Term (Years) LTV (2) 1 Senior Loan 12-Jun-17 4,675,000 4,675,000 Winston-Salem, NC Multi-Family 1mL + 6.0% 1.3 77.2 % 2 Senior Loan 5-Nov-15 5,535,000 5,535,000 Pascagoula, MS Multi-Family 1mL + 4.5% 1.7 72.9 % 3 Senior Loan 11-Oct-17 6,370,000 6,370,000 New Orleans, LA Multi-Family 1mL + 4.1% 3.7 75.5 % 4 Senior Loan 13-Oct-17 14,715,000 14,715,000 Hattiesburg, MS Multi-Family 1mL + 4.8% 3.7 78.4 % 5 Senior Loan 9-Jan-18 10,317,000 9,518,294 North Highlands, CA Multi-Family 1mL + 4.0% 3.9 79.0 % 6 Senior Loan 16-Jun-17 5,634,482 5,543,885 Dallas, TX Multi-Family 1mL + 4.8% 3.3 75.2 % 7 Senior Loan 15-Nov-17 30,505,000 30,505,000 Phoenix, AZ Multi-Family 1mL + 3.8% 3.8 74.3 % 8 Senior Loan 30-Nov-16 5,000,000 4,675,039 Stafford, TX Office 1mL + 5.5% 2.8 56.4 % 9 Senior Loan 29-Sep-17 12,364,000 11,950,194 Austell, GA Multi-Family 1mL + 4.2% 3.6 80.4 % 10 Senior Loan 29-Jun-16 8,882,738 8,882,738 Various, TX Multi-Family 1mL + 5.5% 0.3 69.2 % 11 Senior Loan 1-Dec-17 19,110,000 19,110,000 Tuscon, AZ Multi-Family 1mL + 4.5% 3.8 80.3 % 12 Senior Loan 8-Aug-18 35,000,000 31,939,667 Dallas, TX Multi-Family 1mL + 3.7% 4.4 81.2 % 13 Senior Loan 27-Dec-17 7,600,000 7,600,000 Philadelphia, PA Multi-Family 1mL + 4.1% 3.8 79.8 % 14 Senior Loan 9-Jul-18 33,830,000 29,338,307 Baltimore, MD Multi-Family 1mL + 3.1% 4.4 77.6 % 15 Senior Loan 9-Oct-18 9,250,000 8,511,430 Dallas, TX Multi-Family 1mL + 3.7% 4.7 78.4 % 16 Senior Loan 10-Oct-18 3,569,150 2,788,015 Philadelphia, PA Multi-Family 1mL + 4.6% 4.7 79.6 % 17 Senior Loan 30-Nov-18 72,000,000 33,000,000 Various Multi-Family 1mL + 4.1% 4.8 70.4 % 18 Senior Loan 6-Dec-18 21,000,000 17,448,900 Greensboro, NC Multi-Family 1mL + 3.4% 4.8 79.8 % 19 Senior Loan 13-Dec-18 17,000,000 17,000,000 Seattle, WA Multi-Family 1mL + 3.8% 2.8 53.7 % 20 Senior Loan 18-Jan-19 10,750,000 7,958,000 Philadelphia, PA Multi-Family 1mL + 4.0% 4.9 71.3 % 21 Senior Loan 28-Dec-18 24,123,000 17,000,000 Austin, TX Retail 1mL + 4.1% 4.8 60.5 % 22 Senior Loan 13-Mar-19 19,360,000 15,862,000 Barytown, TX Multi-Family 1mL + 3.1% 5.1 80.5 % 23 Senior Loan 5-Jun-18 50,858,145 35,625,000 Palatine, IL Multi-Family 1mL + 4.3% 4.3 68.5 % 24 Senior Loan 18-May-18 28,000,000 25,355,116 Woodridge, IL Multi-Family 1mL + 3.8% 4.3 76.4 % 25 Senior Loan 29-Nov-17 22,500,000 22,500,000 Richmond, TX Multi-Family 1mL + 3.9% 1.8 73.5 % 26 Senior Loan 31-May-18 24,700,000 19,430,000 Omaha, NE Multi-Family 1mL + 3.7% 4.3 77.3 % 27 Senior Loan 28-Jun-18 17,000,000 14,800,000 Greenville, SC Multi-Family 1mL + 3.9% 4.3 76.3 % 28 Senior Loan 26-Mar-18 19,235,000 14,212,713 Rochelle Park, NJ Office 1mL + 4.0% 4.1 76.8 % 29 Senior Loan 1-Feb-18 14,320,000 12,920,000 Fresno, CA Multi-Family 1mL + 3.9% 3.9 82.4 % 30 Senior Loan 23-Jul-18 16,200,000 12,432,514 Chicago, IL Office 1mL + 3.8% 4.4 72.7 % 31 Senior Loan 24-May-18 12,720,000 11,323,290 Austin, TX Multi-Family 1mL + 3.6% 4.3 80.2 % 32 Senior Loan 25-May-18 11,000,000 9,440,000 Phoenix, AZ Multi-Family 1mL + 3.9% 4.3 69.4 % 33 Senior Loan 12-Mar-18 9,112,000 9,112,000 Waco, TX Multi-Family 1mL + 4.8% 4.1 78.3 % 34 Senior Loan 15-Feb-18 10,500,000 8,708,582 Atlanta, GA Multi-Family 1mL + 4.3% 4.0 80.2 % 35 Senior Loan 23-Feb-18 8,070,000 8,070,000 Little Rock, AR Multi-Family 1mL + 4.3% 4.0 81.3 % 36 Senior Loan 30-Aug-18 9,034,000 8,000,000 Blacksburg, VA Multi-Family 1mL + 3.9% 4.5 66.6 % 37 Senior Loan 7-Aug-18 9,000,000 8,053,748 Birmingham, AL Multi-Family 1mL + 3.5% 4.5 78.0 % 38 Senior Loan 4-Apr-18 7,332,000 6,874,000 Little Rock, AR Office 1mL + 4.9% 4.1 72.4 % 39 Senior Loan 2-Aug-18 10,000,000 6,860,637 Goldsboro, NC Retail 1mL + 4.0% 4.4 56.5 % 40 Senior Loan 9-Nov-17 6,647,000 5,547,000 Las Vegas, NV Self-Storage 1mL + 4.3% 3.8 76.0 % 41 Senior Loan 22-Jun-18 6,200,000 5,667,487 Chicago, IL Multi-Family 1mL + 4.1% 4.3 80.5 % 42 Senior Loan 29-Jun-18 4,525,000 4,404,365 Washington, DC Mixed Use 1mL + 4.7% 4.3 73.3 % 43 Senior Loan 30-Apr-18 4,080,000 3,793,542 Wichita, KS Multi-Family 1mL + 5.0% 4.2 69.0 % 44 Senior Loan 30-Nov-18 8,250,000 4,714,340 Decatur, GA Office 1mL + 4.1% 4.7 56.8 % 45 Senior Loan 28-Dec-18 20,850,000 18,000,000 Austin, TX Retail 1mL + 3.9% 4.8 71.4 % (1) See Note 16 Commitments and Contingencies for further discussion of unfunded commitments. (2) LTV as of the date the loan was originated by a Hunt affiliate and is calculated after giving effect to capex and earnout reserves, if applicable. LTV has not been updated for any subsequent draws or loan modifications and is not reflective of any changes in value, which may have occurred subsequent to the origination date. |
Hunt CRE 2017-FL1, Ltd. | |
Variable Interest Entity [Line Items] | |
Condensed Consolidated Balance Sheets | The carrying values of the Company's total assets and liabilities related to Hunt CRE 2017-FL1, Ltd. and Hunt CRE 2018-FL2, Ltd. at March 31, 2019 and December 31, 2018 included the following VIE assets and liabilities: ASSETS March 31, 2019 December 31, 2018 Cash, cash equivalents and restricted cash $ 52,348,987 $ 51,330,950 Accrued interest receivable 2,591,990 2,398,905 Investment related receivable — 32,666,128 Loans held for investment 581,878,684 550,555,503 Total Assets $ 636,819,661 $ 636,951,486 LIABILITIES Accrued interest payable $ 936,589 $ 867,794 Collateralized loan obligations (1) 504,460,023 503,978,918 Total Liabilities $ 505,396,612 $ 504,846,712 Equity 131,423,050 132,104,774 Total liabilities and equity $ 636,819,661 $ 636,951,486 (1) The stated maturity of the collateral loan obligations per the terms of the underlying collateralized loan obligation agreement is August 15, 2034 for Hunt CRE 2017-FL1, Ltd. and August 15, 2028 for Hunt CRE 2018-FL2, Ltd. |
Summary of Loan and Borrowing Characteristics | The following tables present certain loan and borrowing characteristics of Hunt CRE 2017-FL1, Ltd. and Hunt CRE 2018-FL2, Ltd. as of March 31, 2019 and December 31, 2018 : As of March 31, 2019 Collateral (loan investments) Debt (notes issued) Unpaid Principal Balance Carrying Value Face Value Carrying Value $ 581,878,684 $ 581,878,684 $ 510,181,000 $ 504,460,023 |
Special Purpose Entity And Variable Interest Entity Disclosure [Text Block] | 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 then undertook an analysis of whether it is the primary beneficiary of any of these VIEs, and determined that it was the primary beneficiary of the FREMF 2012-KF01 Trust as of December 31, 2018 and through January 25, 2019, the repayment date of the underlying security. Accordingly, the Company consolidated the assets, liabilities, income and expenses of this trust in its financial statements through January 25, 2019 and December 31, 2018 . However, the assets of the trust are restricted, and can only be used to fulfill the obligations of the trust. Additionally, the obligations of the trust do not have any recourse to the Company as the consolidator of the trust. The Company has elected the fair value option in respect of the assets and liabilities of the trusts. As noted in Notes 6 and 7, the Company sold the underlying securities of the FREMF 2011-K13 and CSMC 2014-OAK1 trusts effective May 18, 2018 and June 18, 2018, respectively, and the FREMF 2012-KF01was paid-in full effective January 25, 2019, and henceforth no longer consolidates these three trusts. On April 30, 2018, the Company acquired Hunt CMT Equity LLC, which was comprised of commercial mortgage loans financed through collateralized loan obligations ("Hunt CRE 2017-FL1, Ltd."), a licensed commercial mortgage lender and eight loan participations. The Company determined Hunt CRE 2017-FL1, Ltd. was a VIE and that the Company was the primary beneficiary of the issuing entity, and accordingly consolidated its assets and liabilities into the Company's financial statements in accordance with GAAP. On August 20, 2018, the Company closed a collateral loan obligation ("Hunt CRE 2018-FL2, Ltd."). The Company determined Hunt CRE 2018-FL2, Ltd. was a VIE and the Company was the primary beneficiary of the issuing entity, and accordingly consolidated its assets and liabilities into the Company's financial statements in accordance with GAAP. 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 carrying values of the Company's total assets and liabilities related to Hunt CRE 2017-FL1, Ltd. and Hunt CRE 2018-FL2, Ltd. at March 31, 2019 and December 31, 2018 included the following VIE assets and liabilities: ASSETS March 31, 2019 December 31, 2018 Cash, cash equivalents and restricted cash $ 52,348,987 $ 51,330,950 Accrued interest receivable 2,591,990 2,398,905 Investment related receivable — 32,666,128 Loans held for investment 581,878,684 550,555,503 Total Assets $ 636,819,661 $ 636,951,486 LIABILITIES Accrued interest payable $ 936,589 $ 867,794 Collateralized loan obligations (1) 504,460,023 503,978,918 Total Liabilities $ 505,396,612 $ 504,846,712 Equity 131,423,050 132,104,774 Total liabilities and equity $ 636,819,661 $ 636,951,486 (1) The stated maturity of the collateral loan obligations per the terms of the underlying collateralized loan obligation agreement is August 15, 2034 for Hunt CRE 2017-FL1, Ltd. and August 15, 2028 for Hunt CRE 2018-FL2, Ltd. The following tables present certain loan and borrowing characteristics of Hunt CRE 2017-FL1, Ltd. and Hunt CRE 2018-FL2, Ltd. as of March 31, 2019 and December 31, 2018 : As of March 31, 2019 Collateral (loan investments) Debt (notes issued) Unpaid Principal Balance Carrying Value Face Value Carrying Value $ 581,878,684 $ 581,878,684 $ 510,181,000 $ 504,460,023 As of December 31, 2018 Collateral (loan investments) Debt (notes issued) Unpaid Principal Balance Carrying Value Face Value Carrying Value $ 550,555,503 $ 550,555,503 $ 510,181,000 $ 503,978,918 |
SECURED TERM LOAN (Tables)
SECURED TERM LOAN (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Debt Disclosure [Abstract] | |
Summary of Credit Agreement | As of March 31, 2019 , the outstanding balance and total commitment under the Credit Agreement consisted of the following: March 31, 2019 Outstanding Balance Total Commitment Secured Term Loan $ 40,250,000 $ 40,250,000 Total $ 40,250,000 $ 40,250,000 |
DERIVATIVE INSTRUMENTS HEDGIN_2
DERIVATIVE INSTRUMENTS HEDGING AND NON-HEDGING ACTIVITIES (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Derivative Instrument Detail [Abstract] | |
Hedged Risks and Gains and Losses on Derivative Instruments | The following table summarizes the underlying hedged risks and the amount of gains and losses on derivative instruments reported net in the condensed consolidated statement of operations as realized gain (loss) on derivative contracts, net and unrealized gain (loss) on derivative contracts, net for the three months ended March 31, 2018 . The Company did not hold any derivative instruments as of March 31, 2019 : Three Months Ended March 31, 2018 Primary underlying risk Amount of realized gain (loss) Amount of unrealized appreciation (depreciation) Total Interest rate: Futures $ 2,792,794 $ 12,783,088 $ 15,575,882 Total $ 2,792,794 $ 12,783,088 $ 15,575,882 |
MSRs (Tables)
MSRs (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Mortgage Servicing Rights MSR Disclosure [Abstract] | |
MSR Activity | The following table presents the Company’s MSR activity for the three months ended March 31, 2019 and the three months ended March 31, 2018 : March 31, 2019 March 31, 2018 Balance at beginning of period $ 3,997,786 $ 2,963,861 MSRs relating to sales to securitizations — — MSRs related to deconsolidation of securitization trust — — Changes in fair value due to: Changes in valuation inputs or assumptions used in valuation model (289,762 ) 174,761 Other changes to fair value (1) (90,236 ) (117,073 ) Balance at end of period $ 3,617,788 $ 3,021,549 Loans associated with MSRs (2) $ 398,097,489 $ 324,933,643 MSR values as percent of loans (3) 0.91 % 0.93 % (1) Amounts represent changes due to realization of expected cash flows. (2) Amounts represent the unpaid principal balance of loans associated with MSRs outstanding at March 31, 2019 and March 31, 2018 , respectively. (3) Amounts represent the carrying value of MSRs at March 31, 2019 and March 31, 2018 , respectively divided by the outstanding balance of the loans associated with these MSRs |
Components of Servicing Income | The following table presents the servicing income recorded on the Company’s condensed consolidated statements of operations for the three months ended March 31, 2019 and March 31, 2018 : Three Months Ended Three Months Ended Servicing income $ 248,214 $ 219,978 Total servicing income $ 248,214 $ 219,978 |
FINANCIAL INSTRUMENTS (Tables)
FINANCIAL INSTRUMENTS (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Fair Value Disclosures [Abstract] | |
Valuation of Assets and Liabilities at Fair Value | The following tables summarize the valuation of the Company’s assets and liabilities carried at fair value within the fair value hierarchy levels as of March 31, 2019 and December 31, 2018 : March 31, 2019 Quoted prices in active markets for identical assets Level 1 Significant other observable inputs Level 2 Unobservable inputs Level 3 Balance as of March 31, 2019 Assets: Mortgage servicing rights — — 3,617,788 3,617,788 Total $ — $ — $ 3,617,788 $ 3,617,788 December 31, 2018 Quoted prices in active markets for identical assets Level 1 Significant other observable inputs Level 2 Unobservable inputs Level 3 Balance as of December 31, 2018 Assets: Mortgage servicing rights — — 3,997,786 3,997,786 Total $ — $ — $ 3,997,786 $ 3,997,786 Liabilities: Multi-family securitized debt obligations $ — $ (19,231,331 ) $ — $ (19,231,331 ) Total $ — $ (19,231,331 ) $ — $ (19,231,331 ) |
Quantitative Information About the Significant Unobservable Inputs Used in the Fair Value Measurement of MSRs Classified as Level 3 | 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 March 31, 2019 and December 31, 2018 : As of March 31, 2019 Valuation Technique Unobservable Input Range Weighted Average Discounted cash flow Constant prepayment rate 7.0 - 24.0% 11.5 % Discount rate 12.0 % 12.0 % As of December 31, 2018 Valuation Technique Unobservable Input Range Weighted Average Discounted cash flow Constant prepayment rate 7.0 - 20.4% 10.1 % Discount rate 12.0 % 12.0 % |
Fair value schedule of financial instruments | The following table details the carrying amount, face amount and fair value of the financial instruments described in Note 3: March 31, 2019 Carrying Value Face Amount Fair Value Assets: Cash and cash equivalents $ 13,640,181 $ 13,640,181 $ 13,640,181 Restricted cash 52,348,987 52,348,987 52,348,987 Commercial mortgage loans held-for-investment 585,770,803 585,770,803 585,770,803 Total $ 651,759,971 $ 651,759,971 $ 651,759,971 Liabilities: Collateralized loan obligations $ 504,460,023 $ 510,181,000 $ 509,101,491 Secured Term Loan 39,300,544 40,250,000 40,250,000 Total $ 543,760,567 $ 550,431,000 $ 549,351,491 December 31, 2018 Carrying Value Face Amount Fair Value Assets: Cash and cash equivalents $ 7,882,862 $ 7,882,862 $ 7,882,862 Restricted cash 51,330,950 51,330,950 51,330,950 Cash held in securitization trusts, at fair value 24,357,335 24,357,335 24,357,335 Commercial mortgage loans held-for-investment 555,172,891 555,172,891 555,172,891 Total $ 638,744,038 $ 638,744,038 $ 638,744,038 Liabilities: Collateralized loan obligations $ 503,978,918 $ 510,181,000 $ 509,000,439 Total $ 503,978,918 $ 510,181,000 $ 509,000,439 |
RELATED PARTY TRANSACTIONS (Tab
RELATED PARTY TRANSACTIONS (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Related Party Transactions [Abstract] | |
Restricted Common Stock Activity | The following table summarizes the activity related to restricted common stock for the three months ended March 31, 2019 and March 31, 2018 : Three Months Ended March 31, 2019 2019 2018 Shares Weighted Average Grant Date Fair Market Value Shares Weighted Average Grant Date Fair Market Value Outstanding Unvested Shares at Beginning of Period 4,500 $ 3.40 4,500 $ 4.33 Granted — — — — Vested — — — — Outstanding Unvested Shares at End of Period 4,500 $ 3.40 4,500 $ 4.33 |
EQUITY (Tables)
EQUITY (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Stockholders' Equity Note [Abstract] | |
Cash Dividends Declared | The following table presents cash dividends declared by the Company on its common stock during the three months ended March 31, 2019 : Declaration Date Record Date Payment Date Dividend Amount Cash Dividend Per Weighted Average Share March 18, 2019 March 29, 2019 April 15, 2019 $ 1,658,136 $ 0.07000 The following table presents cash dividends declared by the Company on its Series A Preferred Stock for the three months ended March 31, 2019 : Declaration Date Record Date Payment Date Dividend Amount Cash Dividend Per Weighted Average Share December 7, 2018 January 15, 2019 January 28, 2019 $ 332,626 $ 0.20660 December 7, 2018 February 14, 2019 February 14, 2019 $ 188,488 $ 0.11710 |
EARNINGS PER SHARE (Tables)
EARNINGS PER SHARE (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Earnings Per Share [Abstract] | |
Computation of Basic and Diluted Earnings Per Share | The following tables provide additional disclosure regarding the computation for the three months ended March 31, 2019 and March 31, 2018 : Three Months Ended March 31, 2019 Three Months Ended March 31, 2018 Net income (loss) $ 1,474,767 $ 11,315,000 Less dividends: Common stock $ 1,658,136 $ 2,314,686 Preferred stock 480,472 880,509 Deemed dividend on preferred stock related to redemption 3,093,028 — 5,231,636 3,195,195 Undistributed earnings (deficit) $ (3,756,869 ) $ 8,119,805 Unvested Share-Based Payment Awards Common Stock Unvested Share-Based Payment Awards Common Stock Distributed earnings $ 0.07 $ 0.07 $ 0.10 $ 0.10 Undistributed earnings (deficit) (0.16 ) (0.16 ) 0.35 0.35 Total $ (0.09 ) $ (0.09 ) $ 0.45 $ 0.45 |
INCOME TAXES (Tables)
INCOME TAXES (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Income Tax Disclosure [Abstract] | |
Schedule of Taxable Income Reconciliation | The following table reconciles the Company’s TRS GAAP net income (loss) to taxable income (in thousands): As of March 31, 2019 As of March 31, 2018 GAAP consolidated net income (loss) attributable to Five Oaks Investment Corp 1,411 12,829 GAAP net loss (income) from REIT operations (1,311 ) (12,559 ) GAAP net income (loss) of taxable subsidiary 100 270 Capitalized transaction fees (10 ) (10 ) Unrealized gain (loss) 380 (50 ) Deferred income — 52 Tax income (loss) of taxable subsidiary before utilization of net operating losses 470 262 Current state tax expense (102 ) — Utilizations of net operating losses (68 ) (262 ) Net tax income of taxable subsidiaries 300 — |
Schedule of Deferred Tax Assets | The TRS has a deferred tax asset, comprised of the following (in thousands): As of March 31, 2019 As of December 31, 2018 Accumulated net operating losses of TRS 297 263 Unrealized (gain) loss 417 245 Capitalized transaction costs 133 112 Deferred tax asset (liability) 847 620 |
ORGANIZATION AND BUSINESS OPE_2
ORGANIZATION AND BUSINESS OPERATIONS - Narrative (Details) | Mar. 18, 2019USD ($) | Feb. 14, 2019USD ($)$ / sharesshares | Jan. 15, 2019USD ($) | Apr. 30, 2018USD ($)Loan_Participation | Jan. 18, 2018USD ($)$ / sharesshares | Jan. 17, 2018 | Mar. 31, 2019USD ($)shares | Mar. 31, 2018 | Dec. 31, 2018USD ($)$ / sharesshares | Aug. 20, 2018USD ($) |
Variable Interest Entity [Line Items] | ||||||||||
Total Assets | $ 659,406,989 | $ 679,352,035 | ||||||||
Total Liabilities | 550,136,102 | 529,148,697 | ||||||||
Cash and cash equivalents | 13,640,181 | 7,882,862 | ||||||||
Collateralized loan obligations | 504,460,023 | 503,978,918 | ||||||||
Principal amount | 40,250,000 | |||||||||
Preferred stock, liquidation preference, value (in dollars) | $ 25 | $ 25 | ||||||||
Preferred stock, shares outstanding (in shares) | shares | 0 | 1,610,000 | ||||||||
Preferred stock, dividend rate, percentage | 8.75% | 8.75% | 8.75% | |||||||
Preferred stock, liquidation preference (in dollars per share) | $ / shares | $ 25 | |||||||||
Oaks Funding, LLC | ||||||||||
Variable Interest Entity [Line Items] | ||||||||||
Total Assets | $ 0 | |||||||||
Total Liabilities | 0 | |||||||||
Oaks Funding II, LLC | ||||||||||
Variable Interest Entity [Line Items] | ||||||||||
Total Assets | 0 | |||||||||
Total Liabilities | 0 | |||||||||
Oaks Holding I LLC | ||||||||||
Variable Interest Entity [Line Items] | ||||||||||
Total Assets | 0 | |||||||||
Total Liabilities | 0 | |||||||||
Hunt | Private Placement | ||||||||||
Variable Interest Entity [Line Items] | ||||||||||
Common stock issued (in shares) | shares | 1,539,406 | |||||||||
Common stock, shares issued (in dollars per share) | $ / shares | $ 4.77 | |||||||||
Aggregate capital raise | $ 7,342,967 | |||||||||
XL Investments | Hunt | ||||||||||
Variable Interest Entity [Line Items] | ||||||||||
Purchase premium (percentage) | 56.90% | |||||||||
Outstanding common shares owned (percentage) | 9.50% | |||||||||
XL Investments | Hunt | Private Placement | ||||||||||
Variable Interest Entity [Line Items] | ||||||||||
Common stock issued (in shares) | shares | 710,495 | |||||||||
Hunt CMT | ||||||||||
Variable Interest Entity [Line Items] | ||||||||||
Aggregate purchase price | $ 68,000,000 | |||||||||
Number of loan participations | Loan_Participation | 8 | |||||||||
Assets acquired | $ 100,000 | |||||||||
Loan participations acquired | 6,200,000 | |||||||||
Face Amount | ||||||||||
Variable Interest Entity [Line Items] | ||||||||||
Total Assets | 651,759,971 | $ 638,744,038 | ||||||||
Total Liabilities | 550,431,000 | 510,181,000 | ||||||||
Cash and cash equivalents | 13,640,181 | 7,882,862 | ||||||||
Collateralized loan obligations | 510,181,000 | 510,181,000 | ||||||||
Carrying Value | ||||||||||
Variable Interest Entity [Line Items] | ||||||||||
Total Assets | 651,759,971 | 638,744,038 | ||||||||
Total Liabilities | 543,760,567 | 503,978,918 | ||||||||
Cash and cash equivalents | 13,640,181 | 7,882,862 | ||||||||
Collateralized loan obligations | 504,460,023 | 503,978,918 | ||||||||
Hunt CRE 2017-FL1, Ltd. | Hunt CMT | ||||||||||
Variable Interest Entity [Line Items] | ||||||||||
Portfolio balance | 339,400,000 | |||||||||
Cash and cash equivalents | 9,800,000 | |||||||||
Hunt CRE 2017-FL1, Ltd. | Face Amount | ||||||||||
Variable Interest Entity [Line Items] | ||||||||||
Collateralized loan obligations | 290,700,000 | |||||||||
Hunt CRE 2017-FL1, Ltd. | Carrying Value | ||||||||||
Variable Interest Entity [Line Items] | ||||||||||
Collateralized loan obligations | $ 287,600,000 | |||||||||
Hunt CRE 2018-FL2, Ltd | ||||||||||
Variable Interest Entity [Line Items] | ||||||||||
Cash and cash equivalents | $ 59,700,000 | |||||||||
Collateralized loan obligations | 285,000,000 | |||||||||
Unpaid Principal Balance | 219,400,000 | $ 225,300,000 | ||||||||
Commercial real estate portfolio segment | ||||||||||
Variable Interest Entity [Line Items] | ||||||||||
Unpaid Principal Balance | 585,770,803 | 555,172,891 | ||||||||
Carrying Value | 585,770,803 | $ 555,172,891 | ||||||||
Commercial real estate portfolio segment | Hunt CRE 2018-FL2, Ltd | ||||||||||
Variable Interest Entity [Line Items] | ||||||||||
Carrying Value | 215,400,000 | |||||||||
Delayed Draw Facility | Credit Agreement | ||||||||||
Variable Interest Entity [Line Items] | ||||||||||
Principal amount | $ 40,250,000 | $ 40,250,000 | $ 40,250,000 | |||||||
Maturity term | 6 years | |||||||||
Proceeds from debt | 39,300,000 | |||||||||
Delayed Draw Facility | Credit Agreement | Five year period following initial draw | ||||||||||
Variable Interest Entity [Line Items] | ||||||||||
Interest fixed rate | 7.25% | |||||||||
Delayed Draw Facility | Credit Agreement | First four months after fifth anniversary | ||||||||||
Variable Interest Entity [Line Items] | ||||||||||
Interest fixed rate | 0.25% | |||||||||
Delayed Draw Facility | Credit Agreement | Second four months after fifth anniversary | ||||||||||
Variable Interest Entity [Line Items] | ||||||||||
Interest fixed rate | 0.375% | |||||||||
Delayed Draw Facility | Credit Agreement | Last four months until maturity | ||||||||||
Variable Interest Entity [Line Items] | ||||||||||
Interest fixed rate | 0.50% | |||||||||
Redeemable Preferred Stock | ||||||||||
Variable Interest Entity [Line Items] | ||||||||||
Preferred stock, liquidation preference, value (in dollars) | $ 1,100,000 | |||||||||
Preferred stock, shares outstanding (in shares) | shares | 1,610,000 | |||||||||
Preferred stock, dividend rate, percentage | 8.75% | |||||||||
Preferred stock, liquidation preference (in dollars per share) | $ / shares | $ 25 | |||||||||
Support Agreement | Hunt Investment Management, LLC | ||||||||||
Variable Interest Entity [Line Items] | ||||||||||
Maximum reduction of expense reimbursement per annum (percent) | 25.00% | |||||||||
Maximum expense reimbursement reduction per annum | $ 568,000 | |||||||||
Aggregate reduction of expense reimbursement | $ 1,960,000 |
SUMMARY OF SIGNIFICANT ACCOUN_4
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Narrative (Details) - USD ($) | Apr. 12, 2019 | Feb. 14, 2019 | Mar. 31, 2019 | Mar. 31, 2018 | Dec. 31, 2018 | Dec. 31, 2017 | Jan. 15, 2019 | Dec. 15, 2015 |
Debt and Equity Securities, FV-NI [Line Items] | ||||||||
Maximum exposure to loss from consolidated trusts | $ 0 | $ 4,762,149 | ||||||
Non-accrual status | 0 | |||||||
Recognized impairment | 0 | |||||||
Allowance for loan losses | 0 | |||||||
Principal amount | 40,250,000 | |||||||
Deferred financing costs amortized | 970,545 | |||||||
Available for sale securities | 0 | $ 0 | ||||||
Outstanding repurchase agreements | $ 0 | $ 0 | ||||||
Backstop deferred income, amortization period | 5 years | |||||||
Backstop guarantee, assumed prepayment rate (percentage) | 15.00% | |||||||
Common stock, shares authorized (in shares) | 450,000,000 | 450,000,000 | ||||||
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 | ||||||
Common stock, shares issued (in shares) | 23,687,664 | 23,687,664 | ||||||
Stock repurchase program, authorized amount | $ 10,000,000 | |||||||
Preferred stock, shares authorized (in shares) | 50,000,000 | 50,000,000 | ||||||
Preferred stock, par value (in dollars per share) | $ 0.01 | $ 0.01 | ||||||
Preferred stock, shares issued (in shares) | 0 | 1,610,000 | ||||||
Common stock, shares outstanding (in shares) | 23,687,664 | 23,687,664 | ||||||
Preferred stock, shares outstanding (in shares) | 0 | 1,610,000 | ||||||
Preferred stock, dividend rate, percentage | 8.75% | 8.75% | 8.75% | |||||
Preferred stock, liquidation preference (in dollars per share) | $ 25 | |||||||
Tax liability | $ 1,960,000 | |||||||
Credit Agreement | Delayed Draw Facility | ||||||||
Debt and Equity Securities, FV-NI [Line Items] | ||||||||
Principal amount | $ 40,250,000 | $ 40,250,000 | $ 40,250,000 | |||||
Stock Repurchase Program | ||||||||
Debt and Equity Securities, FV-NI [Line Items] | ||||||||
Weighted average share price of common stock repurchased (in dollars per share) | $ 5.09 | |||||||
Number of shares repurchased (in shares) | 126,856 | 126,856 | ||||||
Common stock repurchase activity (in shares) | 0 | |||||||
Stock repurchase program, remaining authorized amount | $ 9,400,000 | |||||||
Collateralized Loan Obligations | ||||||||
Debt and Equity Securities, FV-NI [Line Items] | ||||||||
Maximum exposure to loss from consolidated trusts | $ 124,046,671 | |||||||
Redeemable Preferred Stock | ||||||||
Debt and Equity Securities, FV-NI [Line Items] | ||||||||
Preferred stock, shares outstanding (in shares) | 1,610,000 | |||||||
Preferred stock, dividend rate, percentage | 8.75% | |||||||
Preferred stock, liquidation preference (in dollars per share) | $ 25 | |||||||
Subsequent Event | Internal Revenue Service (IRS) | ||||||||
Debt and Equity Securities, FV-NI [Line Items] | ||||||||
Income taxes, interest paid | $ 1,960,000 |
SUMMARY OF SIGNIFICANT ACCOUN_5
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Reconciliation of Cash, Cash Equivalents and Restricted Cash (Details) - USD ($) | Mar. 31, 2019 | Dec. 31, 2018 | Aug. 20, 2018 | Mar. 31, 2018 | Dec. 31, 2017 |
Cash and Cash Equivalents [Line Items] | |||||
Cash and cash equivalents | $ 13,640,181 | $ 7,882,862 | |||
Restricted cash | 52,348,987 | 51,330,950 | |||
Total cash, cash equivalents and restricted cash | 65,989,168 | 59,213,812 | $ 53,915,473 | $ 45,622,602 | |
Hunt CRE 2017-FL1, Ltd. | |||||
Cash and Cash Equivalents [Line Items] | |||||
Restricted cash | 43,193,321 | 24,085,890 | |||
Hunt CRE 2018-FL2, Ltd | |||||
Cash and Cash Equivalents [Line Items] | |||||
Cash and cash equivalents | $ 59,700,000 | ||||
Restricted cash | $ 9,155,666 | $ 27,245,060 |
FAIR VALUE MEASUREMENTS - Narra
FAIR VALUE MEASUREMENTS - Narrative (Details) | Mar. 31, 2019insturment |
Fair Value Disclosures [Abstract] | |
Number of derivative instruments held | 0 |
AVAILABLE-FOR-SALE SECURITIES -
AVAILABLE-FOR-SALE SECURITIES - Realized Gain (Loss) from Sale of AFS Securities (Details) - USD ($) | 3 Months Ended | ||
Mar. 31, 2018 | Mar. 31, 2019 | Dec. 31, 2018 | |
Debt Securities, Available-for-sale [Line Items] | |||
Available for sale securities | $ 0 | $ 0 | |
AFS Securities | |||
Debt Securities, Available-for-sale [Line Items] | |||
AFS securities sold, at cost | $ 147,058,544 | ||
Proceeds from AFS securities sold | 144,210,537 | ||
Net realized gain (loss) on sale of AFS securities | $ (2,848,007) |
AVAILABLE-FOR-SALE SECURITIES_2
AVAILABLE-FOR-SALE SECURITIES - Components of Interest Income on AFS Securities (Details) - USD ($) | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Debt Securities, Available-for-sale [Line Items] | ||
Coupon interest | $ 8,323,342 | |
Net (premium amortization)/ discount accretion | $ 0 | (1,243,752) |
Interest income | 7,079,590 | |
Agency | ||
Debt Securities, Available-for-sale [Line Items] | ||
Coupon interest | 8,323,342 | |
Net (premium amortization)/ discount accretion | (1,275,855) | |
Interest income | 7,047,487 | |
Multi-Family | ||
Debt Securities, Available-for-sale [Line Items] | ||
Coupon interest | 0 | |
Net (premium amortization)/ discount accretion | 32,103 | |
Interest income | $ 32,103 |
COMMERCIAL MORTGAGE LOANS HEL_3
COMMERCIAL MORTGAGE LOANS HELD-FOR-INVESTMENT - Summary of Commercial Mortgage Loans (Details) | 3 Months Ended | 12 Months Ended |
Mar. 31, 2019USD ($)mortgage_loan | Dec. 31, 2018USD ($)mortgage_loan | |
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Commercial mortgage loans held-for-investment, at amortized cost | $ 585,770,803 | $ 555,172,891 |
Commercial real estate portfolio segment | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Unpaid Principal Balance | 585,770,803 | 555,172,891 |
Commercial mortgage loans held-for-investment, at amortized cost | 585,770,803 | 555,172,891 |
Carrying Value | $ 585,770,803 | $ 555,172,891 |
Number of Loans | mortgage_loan | 45 | 44 |
Weighted average, floating rate loan, percentage | 100.00% | 100.00% |
Weighted average coupon rate, percentage | 6.50% | 6.40% |
Weighted average, life (in years) | 4 years | 4 years 1 month 6 days |
Outstanding senior secured loans from loan participations | $ 3,892,119 | $ 4,617,388 |
Commercial real estate portfolio segment | Hunt CMT | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Commercial mortgage loans held-for-investment, at amortized cost | $ 581,878,684 | $ 550,555,503 |
THE FREMF TRUSTS - Narrative (D
THE FREMF TRUSTS - Narrative (Details) - FREMF Trusts - USD ($) | 3 Months Ended | |
Mar. 31, 2019 | Dec. 31, 2018 | |
Variable Interest Entity [Line Items] | ||
Investment in Multi-Family MBS, carrying value | $ 0 | $ 4,762,149 |
Realized losses | $ 709,439 |
COMMERCIAL MORTGAGE LOANS HEL_4
COMMERCIAL MORTGAGE LOANS HELD-FOR-INVESTMENT - Loan Portfolio Activity (Details) - USD ($) | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Loans Receivable Held-For-Investment, Net, Reconciliation To Cash Flow [Roll Forward] | ||
Balance at December 31, 2018 | $ 555,172,891 | |
Purchases, net | 64,612,349 | $ 0 |
Proceeds from principal repayments | (34,014,437) | $ 0 |
Balance at March 31, 2019 | 585,770,803 | |
Commercial real estate portfolio segment | ||
Loans Receivable Held-For-Investment, Net, Reconciliation To Cash Flow [Roll Forward] | ||
Balance at December 31, 2018 | 555,172,891 | |
Purchases, net | 64,612,349 | |
Proceeds from principal repayments | (34,014,437) | |
Balance at March 31, 2019 | $ 585,770,803 |
THE FREMF TRUSTS - Condensed Co
THE FREMF TRUSTS - Condensed Consolidated Balance Sheets (Details) - USD ($) | Mar. 31, 2019 | Dec. 31, 2018 | |
Assets | |||
Total assets | $ 659,406,989 | $ 679,352,035 | |
Liabilities and Equity | |||
Multi-family securitized debt obligations | [1] | 0 | 19,231,331 |
Total liabilities | 550,136,102 | 529,148,697 | |
Equity | 109,171,387 | 150,103,838 | |
Total liabilities and equity | $ 659,406,989 | 679,352,035 | |
FREMF Trusts | |||
Assets | |||
Multi-family mortgage loans held in securitization trusts | 0 | ||
Receivables | 24,357,335 | ||
Total assets | 24,357,335 | ||
Liabilities and Equity | |||
Multi-family securitized debt obligations | 19,231,331 | ||
Payables | 363,855 | ||
Total liabilities | 19,595,186 | ||
Equity | 4,762,149 | ||
Total liabilities and equity | $ 24,357,335 | ||
[1] | Our consolidated balance sheets include assets and liabilities of consolidated variable interest entities ("VIEs") as the Company was the primary beneficiary of these VIEs. As of December 31, 2018, assets of consolidated VIEs totaled $24,357,335, and the liabilities of consolidated VIEs totaled $19,595,186 respectively. |
COMMERCIAL MORTGAGE LOANS HEL_5
COMMERCIAL MORTGAGE LOANS HELD-FOR-INVESTMENT - Summary of Commercial Loan Risk Ratings (Details) | 3 Months Ended | 12 Months Ended |
Mar. 31, 2019USD ($)mortgage_loan | Dec. 31, 2018USD ($)mortgage_loan | |
Financing Receivable, Recorded Investment [Line Items] | ||
Commercial mortgage loans held-for-investment, at amortized cost | $ 585,770,803 | $ 555,172,891 |
Commercial real estate portfolio segment | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Number of Loans | mortgage_loan | 45 | 44 |
Unpaid Principal Balance | $ 585,770,803 | $ 555,172,891 |
Commercial mortgage loans held-for-investment, at amortized cost | $ 585,770,803 | $ 555,172,891 |
Commercial real estate portfolio segment | Risk rating, 1 | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Number of Loans | mortgage_loan | 0 | 0 |
Unpaid Principal Balance | $ 0 | $ 0 |
Commercial mortgage loans held-for-investment, at amortized cost | $ 0 | $ 0 |
Commercial real estate portfolio segment | Risk rating, 2 | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Number of Loans | mortgage_loan | 7 | 5 |
Unpaid Principal Balance | $ 63,522,869 | $ 51,589,000 |
Commercial mortgage loans held-for-investment, at amortized cost | $ 63,522,869 | $ 51,589,000 |
Commercial real estate portfolio segment | Risk rating, 3 | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Number of Loans | mortgage_loan | 34 | 34 |
Unpaid Principal Balance | $ 483,865,447 | $ 455,323,082 |
Commercial mortgage loans held-for-investment, at amortized cost | $ 483,865,447 | $ 455,323,082 |
Average risk rating, percentage | 90.90% | 91.30% |
Commercial real estate portfolio segment | Risk rating, 4 | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Number of Loans | mortgage_loan | 4 | 5 |
Unpaid Principal Balance | $ 38,382,487 | $ 48,260,809 |
Commercial mortgage loans held-for-investment, at amortized cost | $ 38,382,487 | $ 48,260,809 |
Commercial real estate portfolio segment | Risk rating, 5 | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Number of Loans | mortgage_loan | 0 | 0 |
Unpaid Principal Balance | $ 0 | $ 0 |
Commercial mortgage loans held-for-investment, at amortized cost | $ 0 | $ 0 |
THE FREMF TRUSTS - Condensed _2
THE FREMF TRUSTS - Condensed Consolidated Statements of Operations (Details) - USD ($) | 3 Months Ended | |||
Mar. 31, 2019 | Dec. 31, 2018 | Mar. 31, 2018 | Dec. 31, 2017 | |
Variable Interest Entity [Line Items] | ||||
Net interest income | $ 4,206,547 | $ 3,117,572 | ||
General and administrative fees | (1,466,685) | (1,390,061) | ||
Unrealized gain (loss) on multi-family loans held in securitization trusts | 694,339 | $ (1,355,774) | ||
Net income (loss) | 1,474,767 | $ 11,315,000 | 11,315,000 | $ 11,315,000 |
FREMF Trusts | ||||
Variable Interest Entity [Line Items] | ||||
Interest income | 78,361 | 13,227,188 | ||
Interest expense | 0 | 12,526,295 | ||
Net interest income | 78,361 | 700,893 | ||
General and administrative fees | 0 | (623,254) | ||
Unrealized gain (loss) on multi-family loans held in securitization trusts | 694,339 | (1,355,774) | ||
Net income (loss) | $ 772,700 | $ (1,278,135) |
COMMERCIAL MORTGAGE LOANS HEL_6
COMMERCIAL MORTGAGE LOANS HELD-FOR-INVESTMENT - Summary of Concentration of Credit Risk (Details) | 3 Months Ended | 12 Months Ended |
Mar. 31, 2019 | Dec. 31, 2018 | |
Collateral Property Type | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Concentration risk, percentage | 100.00% | 100.00% |
Commercial loans held-for-investment | Commercial real estate portfolio segment | Geography | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Concentration risk, percentage | 100.00% | 100.00% |
Commercial loans held-for-investment | Commercial real estate portfolio segment | Multi-Family Property [Member] | Collateral Property Type | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Concentration risk, percentage | 83.80% | 87.20% |
Commercial loans held-for-investment | Commercial real estate portfolio segment | Office Property [Member] | Collateral Property Type | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Concentration risk, percentage | 7.30% | 7.60% |
Commercial loans held-for-investment | Commercial real estate portfolio segment | Retail Property [Member] | Collateral Property Type | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Concentration risk, percentage | 7.20% | 1.20% |
Commercial loans held-for-investment | Commercial real estate portfolio segment | Self-Storage [Member] | Collateral Property Type | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Concentration risk, percentage | 0.90% | 1.00% |
Commercial loans held-for-investment | Commercial real estate portfolio segment | Mixed Use Property [Member] | Collateral Property Type | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Concentration risk, percentage | 0.80% | 3.00% |
Commercial loans held-for-investment | Commercial real estate portfolio segment | Southwest | Geography | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Concentration risk, percentage | 36.30% | 30.20% |
Commercial loans held-for-investment | Commercial real estate portfolio segment | South | Geography | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Concentration risk, percentage | 21.60% | 22.60% |
Commercial loans held-for-investment | Commercial real estate portfolio segment | Midwest | Geography | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Concentration risk, percentage | 17.50% | 20.20% |
Commercial loans held-for-investment | Commercial real estate portfolio segment | Mid-Atlantic | Geography | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Concentration risk, percentage | 11.30% | 10.30% |
Commercial loans held-for-investment | Commercial real estate portfolio segment | West | Geography | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Concentration risk, percentage | 7.70% | 10.80% |
Commercial loans held-for-investment | Commercial real estate portfolio segment | Various | Geography | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Concentration risk, percentage | 5.60% | 5.90% |
COMMERCIAL MORTGAGE LOANS HEL_7
COMMERCIAL MORTGAGE LOANS HELD-FOR-INVESTMENT - Additional Portfolio Information (Details) - Commercial real estate portfolio segment - USD ($) | 3 Months Ended | |
Mar. 31, 2019 | Dec. 31, 2018 | |
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Unpaid Principal Balance | $ 585,770,803 | $ 555,172,891 |
Las Vegas, NV | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Total Loan Commitment(1) | $ 6,647,000 | |
Max Remaining Term (Years) | 3 years 9 months 18 days | |
LTV(2) | 76.00% | |
Multi-Family | Winston-Salem, NC | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Total Loan Commitment(1) | $ 4,675,000 | |
Unpaid Principal Balance | $ 4,675,000 | |
Coupon | 6.00% | |
Max Remaining Term (Years) | 1 year 3 months 18 days | |
LTV(2) | 77.20% | |
Multi-Family | Pascagoula, MS | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Total Loan Commitment(1) | $ 5,535,000 | |
Unpaid Principal Balance | $ 5,535,000 | |
Coupon | 4.50% | |
Max Remaining Term (Years) | 1 year 8 months 12 days | |
LTV(2) | 72.90% | |
Multi-Family | New Orleans, LA | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Total Loan Commitment(1) | $ 6,370,000 | |
Unpaid Principal Balance | $ 6,370,000 | |
Coupon | 4.10% | |
Max Remaining Term (Years) | 3 years 8 months 12 days | |
LTV(2) | 75.50% | |
Multi-Family | Hattiesburg, MS | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Total Loan Commitment(1) | $ 14,715,000 | |
Unpaid Principal Balance | $ 14,715,000 | |
Coupon | 4.80% | |
Max Remaining Term (Years) | 3 years 8 months 12 days | |
LTV(2) | 78.40% | |
Multi-Family | North Highlands, CA | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Total Loan Commitment(1) | $ 10,317,000 | |
Unpaid Principal Balance | $ 9,518,294 | |
Coupon | 4.00% | |
Max Remaining Term (Years) | 3 years 10 months 24 days | |
LTV(2) | 79.00% | |
Multi-Family | Dallas, TX | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Total Loan Commitment(1) | $ 5,634,482 | |
Unpaid Principal Balance | $ 5,543,885 | |
Coupon | 4.80% | |
Max Remaining Term (Years) | 3 years 3 months 18 days | |
LTV(2) | 75.20% | |
Multi-Family | Phoenix, AZ | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Total Loan Commitment(1) | $ 30,505,000 | |
Unpaid Principal Balance | $ 30,505,000 | |
Coupon | 3.80% | |
Max Remaining Term (Years) | 3 years 9 months 18 days | |
LTV(2) | 74.30% | |
Multi-Family | Austell, GA | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Total Loan Commitment(1) | $ 12,364,000 | |
Unpaid Principal Balance | $ 11,950,194 | |
Coupon | 4.20% | |
Max Remaining Term (Years) | 3 years 7 months 6 days | |
LTV(2) | 80.40% | |
Multi-Family | Various, TX | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Total Loan Commitment(1) | $ 8,882,738 | |
Unpaid Principal Balance | $ 8,882,738 | |
Coupon | 5.50% | |
Max Remaining Term (Years) | 3 months 18 days | |
LTV(2) | 69.20% | |
Multi-Family | Tuscon, AZ | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Total Loan Commitment(1) | $ 19,110,000 | |
Unpaid Principal Balance | $ 19,110,000 | |
Coupon | 4.50% | |
Max Remaining Term (Years) | 3 years 9 months 18 days | |
LTV(2) | 80.30% | |
Multi-Family | Dallas, TX | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Total Loan Commitment(1) | $ 35,000,000 | |
Unpaid Principal Balance | $ 31,939,667 | |
Coupon | 3.70% | |
Max Remaining Term (Years) | 4 years 4 months 24 days | |
LTV(2) | 81.20% | |
Multi-Family | Philadelphia, PA | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Total Loan Commitment(1) | $ 7,600,000 | |
Unpaid Principal Balance | $ 7,600,000 | |
Coupon | 4.10% | |
Max Remaining Term (Years) | 3 years 9 months 18 days | |
LTV(2) | 79.80% | |
Multi-Family | Baltimore, MD | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Total Loan Commitment(1) | $ 33,830,000 | |
Unpaid Principal Balance | $ 29,338,307 | |
Coupon | 3.10% | |
Max Remaining Term (Years) | 4 years 4 months 24 days | |
LTV(2) | 77.60% | |
Multi-Family | Dallas, TX | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Total Loan Commitment(1) | $ 9,250,000 | |
Unpaid Principal Balance | $ 8,511,430 | |
Coupon | 3.70% | |
Max Remaining Term (Years) | 4 years 8 months 12 days | |
LTV(2) | 78.40% | |
Multi-Family | Philadelphia, PA | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Total Loan Commitment(1) | $ 3,569,150 | |
Unpaid Principal Balance | $ 2,788,015 | |
Coupon | 4.60% | |
Max Remaining Term (Years) | 4 years 8 months 12 days | |
LTV(2) | 79.60% | |
Multi-Family | Various | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Total Loan Commitment(1) | $ 72,000,000 | |
Unpaid Principal Balance | $ 33,000,000 | |
Coupon | 4.10% | |
Max Remaining Term (Years) | 4 years 9 months 18 days | |
LTV(2) | 70.40% | |
Multi-Family | Greensboro, NC | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Total Loan Commitment(1) | $ 21,000,000 | |
Unpaid Principal Balance | $ 17,448,900 | |
Coupon | 3.40% | |
Max Remaining Term (Years) | 4 years 9 months 18 days | |
LTV(2) | 79.80% | |
Multi-Family | Seattle, WA | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Total Loan Commitment(1) | $ 17,000,000 | |
Unpaid Principal Balance | $ 17,000,000 | |
Coupon | 3.80% | |
Max Remaining Term (Years) | 2 years 9 months 18 days | |
LTV(2) | 53.70% | |
Multi-Family | Philadelphia, PA | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Total Loan Commitment(1) | $ 10,750,000 | |
Unpaid Principal Balance | $ 7,958,000 | |
Coupon | 4.00% | |
Max Remaining Term (Years) | 4 years 10 months 24 days | |
LTV(2) | 71.30% | |
Multi-Family | Barytown, TX | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Total Loan Commitment(1) | $ 19,360,000 | |
Unpaid Principal Balance | $ 15,862,000 | |
Coupon | 3.10% | |
Max Remaining Term (Years) | 5 years 1 month 6 days | |
LTV(2) | 80.50% | |
Multi-Family | Palatine, IL | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Total Loan Commitment(1) | $ 50,858,145 | |
Unpaid Principal Balance | $ 35,625,000 | |
Coupon | 4.30% | |
Max Remaining Term (Years) | 4 years 3 months 18 days | |
LTV(2) | 68.50% | |
Multi-Family | Woodridge, IL | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Total Loan Commitment(1) | $ 28,000,000 | |
Unpaid Principal Balance | $ 25,355,116 | |
Coupon | 3.80% | |
Max Remaining Term (Years) | 4 years 3 months 18 days | |
LTV(2) | 76.40% | |
Multi-Family | Richmond, TX | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Total Loan Commitment(1) | $ 22,500,000 | |
Unpaid Principal Balance | $ 22,500,000 | |
Coupon | 3.90% | |
Max Remaining Term (Years) | 1 year 9 months 18 days | |
LTV(2) | 73.50% | |
Multi-Family | Omaha, NE | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Total Loan Commitment(1) | $ 24,700,000 | |
Unpaid Principal Balance | $ 19,430,000 | |
Coupon | 3.70% | |
Max Remaining Term (Years) | 4 years 3 months 18 days | |
LTV(2) | 77.30% | |
Multi-Family | Greenville, SC | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Total Loan Commitment(1) | $ 17,000,000 | |
Unpaid Principal Balance | $ 14,800,000 | |
Coupon | 3.90% | |
Max Remaining Term (Years) | 4 years 3 months 18 days | |
LTV(2) | 76.30% | |
Multi-Family | Fresno, CA | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Total Loan Commitment(1) | $ 14,320,000 | |
Unpaid Principal Balance | $ 12,920,000 | |
Coupon | 3.90% | |
Max Remaining Term (Years) | 3 years 10 months 24 days | |
LTV(2) | 82.40% | |
Multi-Family | Austin, TX | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Total Loan Commitment(1) | $ 12,720,000 | |
Unpaid Principal Balance | $ 11,323,290 | |
Coupon | 3.60% | |
Max Remaining Term (Years) | 4 years 3 months 18 days | |
LTV(2) | 80.20% | |
Multi-Family | Phoenix, AZ | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Total Loan Commitment(1) | $ 11,000,000 | |
Unpaid Principal Balance | $ 9,440,000 | |
Coupon | 3.90% | |
Max Remaining Term (Years) | 4 years 3 months 18 days | |
LTV(2) | 69.40% | |
Multi-Family | Waco, TX | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Total Loan Commitment(1) | $ 9,112,000 | |
Unpaid Principal Balance | $ 9,112,000 | |
Coupon | 4.80% | |
Max Remaining Term (Years) | 4 years 1 month 6 days | |
LTV(2) | 78.30% | |
Multi-Family | Atlanta, GA | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Total Loan Commitment(1) | $ 10,500,000 | |
Unpaid Principal Balance | $ 8,708,582 | |
Coupon | 4.30% | |
Max Remaining Term (Years) | 4 years | |
LTV(2) | 80.20% | |
Multi-Family | Little Rock, AR | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Total Loan Commitment(1) | $ 8,070,000 | |
Unpaid Principal Balance | $ 8,070,000 | |
Coupon | 4.30% | |
Max Remaining Term (Years) | 4 years | |
LTV(2) | 81.30% | |
Multi-Family | Blacksburg, VA | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Total Loan Commitment(1) | $ 9,034,000 | |
Unpaid Principal Balance | $ 8,000,000 | |
Coupon | 3.90% | |
Max Remaining Term (Years) | 4 years 6 months | |
LTV(2) | 66.60% | |
Multi-Family | Birmingham, AL | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Total Loan Commitment(1) | $ 9,000,000 | |
Unpaid Principal Balance | $ 8,053,748 | |
Coupon | 3.50% | |
Max Remaining Term (Years) | 4 years 6 months | |
LTV(2) | 78.00% | |
Multi-Family | Chicago, IL | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Total Loan Commitment(1) | $ 6,200,000 | |
Unpaid Principal Balance | $ 5,667,487 | |
Coupon | 4.10% | |
Max Remaining Term (Years) | 4 years 3 months 18 days | |
LTV(2) | 80.50% | |
Multi-Family | Washington, DC | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Total Loan Commitment(1) | $ 4,525,000 | |
Unpaid Principal Balance | $ 4,404,365 | |
Max Remaining Term (Years) | 4 years 3 months 18 days | |
LTV(2) | 73.30% | |
Multi-Family | Wichita, KS | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Total Loan Commitment(1) | $ 4,080,000 | |
Unpaid Principal Balance | $ 3,793,542 | |
Coupon | 5.00% | |
Max Remaining Term (Years) | 4 years 2 months 12 days | |
LTV(2) | 69.00% | |
Mixed Use | Washington, DC | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Coupon | 4.70% | |
Office | Stafford, TX | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Total Loan Commitment(1) | $ 5,000,000 | |
Unpaid Principal Balance | $ 4,675,039 | |
Coupon | 5.50% | |
Max Remaining Term (Years) | 2 years 9 months 18 days | |
LTV(2) | 56.40% | |
Office | Rochelle Park, NJ | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Total Loan Commitment(1) | $ 19,235,000 | |
Unpaid Principal Balance | $ 14,212,713 | |
Coupon | 4.00% | |
Max Remaining Term (Years) | 4 years 1 month 6 days | |
LTV(2) | 76.80% | |
Office | Chicago, IL | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Total Loan Commitment(1) | $ 16,200,000 | |
Unpaid Principal Balance | $ 12,432,514 | |
Coupon | 3.80% | |
Max Remaining Term (Years) | 4 years 4 months 24 days | |
LTV(2) | 72.70% | |
Office | Little Rock, AR | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Total Loan Commitment(1) | $ 7,332,000 | |
Unpaid Principal Balance | $ 6,874,000 | |
Coupon | 4.90% | |
Max Remaining Term (Years) | 4 years 1 month 6 days | |
LTV(2) | 72.40% | |
Office | Decatur, GA | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Total Loan Commitment(1) | $ 8,250,000 | |
Unpaid Principal Balance | $ 4,714,340 | |
Coupon | 4.10% | |
Max Remaining Term (Years) | 4 years 8 months 12 days | |
LTV(2) | 56.80% | |
Retail | Austin, TX | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Total Loan Commitment(1) | $ 24,123,000 | |
Unpaid Principal Balance | $ 17,000,000 | |
Coupon | 4.10% | |
Max Remaining Term (Years) | 4 years 9 months 18 days | |
LTV(2) | 60.50% | |
Retail | Goldsboro, NC | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Total Loan Commitment(1) | $ 10,000,000 | |
Unpaid Principal Balance | $ 6,860,637 | |
Coupon | 4.00% | |
Max Remaining Term (Years) | 4 years 4 months 24 days | |
LTV(2) | 56.50% | |
Retail | Austin, TX | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Total Loan Commitment(1) | $ 20,850,000 | |
Unpaid Principal Balance | $ 18,000,000 | |
Coupon | 3.90% | |
Max Remaining Term (Years) | 4 years 9 months 18 days | |
LTV(2) | 71.40% | |
Self-Storage | Las Vegas, NV | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Unpaid Principal Balance | $ 5,547,000 | |
Coupon | 4.30% |
RESIDENTIAL MORTGAGE LOAN SEC_3
RESIDENTIAL MORTGAGE LOAN SECURITIZATION TRUSTS - Condensed Consolidated Statements of Operations (Details) - USD ($) | 3 Months Ended | |||
Mar. 31, 2019 | Dec. 31, 2018 | Mar. 31, 2018 | Dec. 31, 2017 | |
Variable Interest Entity [Line Items] | ||||
Net interest income | $ 4,206,547 | $ 3,117,572 | ||
General and administrative fees | (1,466,685) | (1,390,061) | ||
Unrealized gain (loss) on residential loans held in securitization trusts | 0 | (255,403) | $ (255,403) | |
Net income (loss) | $ 1,474,767 | $ 11,315,000 | 11,315,000 | $ 11,315,000 |
Residential mortgage loans | ||||
Variable Interest Entity [Line Items] | ||||
Interest income | 1,147,641 | |||
Interest expense | 920,057 | |||
Net interest income | 227,584 | |||
General and administrative fees | (6,928) | |||
Unrealized gain (loss) on residential loans held in securitization trusts | (255,403) | |||
Net income (loss) | $ (34,747) |
USE OF SPECIAL PURPOSE ENTITI_3
USE OF SPECIAL PURPOSE ENTITIES AND VARIABLE INTEREST ENTITIES - Narrative (Details) | Jun. 18, 2018mortgage_loan_trust |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Number of trusts | 3 |
USE OF SPECIAL PURPOSE ENTITI_4
USE OF SPECIAL PURPOSE ENTITIES AND VARIABLE INTEREST ENTITIES - Condensed Consolidated Balance Sheets (Details) - USD ($) | Mar. 31, 2019 | Dec. 31, 2018 | Mar. 31, 2018 | Dec. 31, 2017 |
Variable Interest Entity [Line Items] | ||||
Cash, cash equivalents and restricted cash | $ 65,989,168 | $ 59,213,812 | $ 53,915,473 | $ 45,622,602 |
Accrued interest receivable | 2,611,659 | 2,430,790 | ||
Investment related receivable | 0 | 33,042,234 | ||
Loans held for investment | 585,770,803 | 555,172,891 | ||
Total assets | 659,406,989 | 679,352,035 | ||
Accrued interest payable | 1,017,648 | 1,231,649 | ||
Collateralized loan obligations | 504,460,023 | 503,978,918 | ||
Total liabilities | 550,136,102 | 529,148,697 | ||
Equity | 109,171,387 | 150,103,838 | ||
Total liabilities and equity | 659,406,989 | 679,352,035 | ||
Hunt CRE 2017-FL1, Ltd. | ||||
Variable Interest Entity [Line Items] | ||||
Cash, cash equivalents and restricted cash | 52,348,987 | 51,330,950 | ||
Accrued interest receivable | 2,591,990 | 2,398,905 | ||
Investment related receivable | 0 | 32,666,128 | ||
Loans held for investment | 581,878,684 | 550,555,503 | ||
Total assets | 636,819,661 | 636,951,486 | ||
Accrued interest payable | 936,589 | 867,794 | ||
Collateralized loan obligations | 504,460,023 | 503,978,918 | ||
Total liabilities | 505,396,612 | 504,846,712 | ||
Equity | 131,423,050 | 132,104,774 | ||
Total liabilities and equity | $ 636,819,661 | $ 636,951,486 |
USE OF SPECIAL PURPOSE ENTITI_5
USE OF SPECIAL PURPOSE ENTITIES AND VARIABLE INTEREST ENTITIES - Summary of Loan and Borrowing Characteristics (Details) - USD ($) | Mar. 31, 2019 | Dec. 31, 2018 |
Variable Interest Entity [Line Items] | ||
Collateralized loan obligations (net of discount of $2,170,488 and $2,440,674 and deferred financing costs of $3,550,489 and $3,761,410 for March 31, 2019 and December 31, 2018, respectively) | $ 504,460,023 | $ 503,978,918 |
Hunt CRE 2017-FL1, Ltd. | ||
Variable Interest Entity [Line Items] | ||
Collateralized loan obligations (net of discount of $2,170,488 and $2,440,674 and deferred financing costs of $3,550,489 and $3,761,410 for March 31, 2019 and December 31, 2018, respectively) | 504,460,023 | 503,978,918 |
Face Amount | ||
Variable Interest Entity [Line Items] | ||
Collateralized loan obligations (net of discount of $2,170,488 and $2,440,674 and deferred financing costs of $3,550,489 and $3,761,410 for March 31, 2019 and December 31, 2018, respectively) | 510,181,000 | 510,181,000 |
Face Amount | Hunt CRE 2017-FL1, Ltd. | ||
Variable Interest Entity [Line Items] | ||
Unpaid Principal Balance | 581,878,684 | 550,555,503 |
Collateralized loan obligations (net of discount of $2,170,488 and $2,440,674 and deferred financing costs of $3,550,489 and $3,761,410 for March 31, 2019 and December 31, 2018, respectively) | 510,181,000 | 510,181,000 |
Carrying Value | ||
Variable Interest Entity [Line Items] | ||
Collateralized loan obligations (net of discount of $2,170,488 and $2,440,674 and deferred financing costs of $3,550,489 and $3,761,410 for March 31, 2019 and December 31, 2018, respectively) | 504,460,023 | 503,978,918 |
Carrying Value | Hunt CRE 2017-FL1, Ltd. | ||
Variable Interest Entity [Line Items] | ||
Carrying Value | 581,878,684 | 550,555,503 |
Collateralized loan obligations (net of discount of $2,170,488 and $2,440,674 and deferred financing costs of $3,550,489 and $3,761,410 for March 31, 2019 and December 31, 2018, respectively) | $ 504,460,023 | $ 503,978,918 |
SECURED TERM LOAN - Narrative (
SECURED TERM LOAN - Narrative (Details) - USD ($) | Jan. 15, 2019 | Mar. 31, 2019 | Feb. 14, 2019 |
Debt Instrument [Line Items] | |||
Principal amount | $ 40,250,000 | ||
Delayed Draw Facility | Credit Agreement | |||
Debt Instrument [Line Items] | |||
Principal amount | $ 40,250,000 | $ 40,250,000 | $ 40,250,000 |
Maturity term | 6 years | ||
Five year period following initial draw | Delayed Draw Facility | Credit Agreement | |||
Debt Instrument [Line Items] | |||
Interest fixed rate | 7.25% | ||
First four months after fifth anniversary | Delayed Draw Facility | Credit Agreement | |||
Debt Instrument [Line Items] | |||
Interest fixed rate | 0.25% | ||
Second four months after fifth anniversary | Delayed Draw Facility | Credit Agreement | |||
Debt Instrument [Line Items] | |||
Interest fixed rate | 0.375% | ||
Last four months until maturity | Delayed Draw Facility | Credit Agreement | |||
Debt Instrument [Line Items] | |||
Interest fixed rate | 0.50% |
SECURED TERM LOAN - Summary of
SECURED TERM LOAN - Summary of Credit Agreement (Details) | Mar. 31, 2019USD ($) |
Debt Disclosure [Abstract] | |
Outstanding Balance | $ 40,250,000 |
Total Commitment | $ 40,250,000 |
DERIVATIVE INSTRUMENTS HEDGIN_3
DERIVATIVE INSTRUMENTS HEDGING AND NON-HEDGING ACTIVITIES - Gains and Losses on Derivative Contracts (Details) | 3 Months Ended |
Mar. 31, 2018USD ($) | |
Interest rate: | |
Amount of realized gain (loss) | $ 2,792,794 |
Amount of unrealized appreciation (depreciation) | 12,783,088 |
Total | 15,575,882 |
Futures | |
Interest rate: | |
Amount of realized gain (loss) | 2,792,794 |
Amount of unrealized appreciation (depreciation) | 12,783,088 |
Total | $ 15,575,882 |
MSRs - MSR Activity (Details)
MSRs - MSR Activity (Details) | 3 Months Ended | |
Mar. 31, 2019USD ($)mortgage_loan_trust | Mar. 31, 2018USD ($) | |
Movement in Mortgage Service Rights | ||
Number of residential mortgage loan securitization trusts | mortgage_loan_trust | 4 | |
Mortgage Servicing Rights | ||
Movement in Mortgage Service Rights | ||
Balance at beginning of period | $ 3,997,786 | $ 2,963,861 |
MSRs relating to sales to securitizations | 0 | 0 |
MSRs related to deconsolidation of securitization trust | 0 | 0 |
Changes in fair value due to: | ||
Changes in valuation inputs or assumptions used in valuation model | (289,762) | 174,761 |
Other changes to fair value | (90,236) | (117,073) |
Balance at end of period | 3,617,788 | 3,021,549 |
Loans associated with MSRs | $ 398,097,489 | $ 324,933,643 |
MSR values as percent of loans | 0.91% | 0.93% |
MSRs - Components of Servicing
MSRs - Components of Servicing Income (Details) - Mortgages - USD ($) | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Schedule Of Components Of Servicing Income [Line Items] | ||
Servicing income | $ 248,214 | $ 219,978 |
Total servicing income | $ 248,214 | $ 219,978 |
FINANCIAL INSTRUMENTS - Assets
FINANCIAL INSTRUMENTS - Assets and Liabilities at Fair Value (Details) - USD ($) | Mar. 31, 2019 | Dec. 31, 2018 | Sep. 30, 2018 | Dec. 31, 2017 |
Assets: | ||||
Total assets | $ 3,617,788 | $ 3,997,786 | ||
Liabilities: | ||||
Total liabilities | (19,231,331) | |||
Quoted prices in active markets for identical assets Level 1 | ||||
Assets: | ||||
Total assets | $ 0 | $ 0 | ||
Liabilities: | ||||
Total liabilities | 0 | |||
Significant other observable inputs Level 2 | ||||
Assets: | ||||
Total assets | 0 | 0 | ||
Liabilities: | ||||
Total liabilities | (19,231,331) | |||
Unobservable inputs Level 3 | ||||
Assets: | ||||
Total assets | 3,617,788 | 3,997,786 | ||
Liabilities: | ||||
Total liabilities | 0 | |||
Mortgage servicing rights | ||||
Assets: | ||||
Total assets | $ 3,617,788 | 3,997,786 | ||
Mortgage servicing rights | Quoted prices in active markets for identical assets Level 1 | ||||
Assets: | ||||
Total assets | 0 | 0 | ||
Mortgage servicing rights | Significant other observable inputs Level 2 | ||||
Assets: | ||||
Total assets | 0 | 0 | ||
Mortgage servicing rights | Unobservable inputs Level 3 | ||||
Assets: | ||||
Total assets | $ 3,617,788 | 3,997,786 | ||
Multi-family securitized debt obligations | ||||
Liabilities: | ||||
Total liabilities | $ (19,231,331) | |||
Multi-family securitized debt obligations | Quoted prices in active markets for identical assets Level 1 | ||||
Liabilities: | ||||
Total liabilities | 0 | |||
Multi-family securitized debt obligations | Significant other observable inputs Level 2 | ||||
Liabilities: | ||||
Total liabilities | (19,231,331) | |||
Multi-family securitized debt obligations | Unobservable inputs Level 3 | ||||
Liabilities: | ||||
Total liabilities | $ 0 |
FINANCIAL INSTRUMENTS - Narrati
FINANCIAL INSTRUMENTS - Narrative (Details) - USD ($) | Mar. 31, 2019 | Dec. 31, 2018 | Sep. 30, 2018 | Dec. 31, 2017 |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Total assets | $ 3,617,788 | $ 3,997,786 | ||
Unobservable inputs Level 3 | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Total assets | $ 3,617,788 | $ 3,997,786 | ||
Mortgage Servicing Rights | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Total assets | $ 3,617,788 | $ 3,997,786 | ||
Mortgage Servicing Rights | Unobservable inputs Level 3 | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Total assets | $ 3,617,788 | $ 3,997,786 |
FINANCIAL INSTRUMENTS - Unobser
FINANCIAL INSTRUMENTS - Unobservable Inputs Information (Details) - Mortgage servicing rights - Discounted cash flow - Unobservable inputs Level 3 | Mar. 31, 2019 | Dec. 31, 2018 |
Constant prepayment rate | Minimum | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Unobservable Input | 0.070 | 0.070 |
Constant prepayment rate | Maximum | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Unobservable Input | 0.240 | 0.204 |
Constant prepayment rate | Weighted Average | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Unobservable Input | 0.115 | 0.101 |
Discount rate | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Unobservable Input | 0.120 | 0.120 |
Discount rate | Weighted Average | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Unobservable Input | 0.120 | 0.120 |
FINANCIAL INSTRUMENTS FINANCIAL
FINANCIAL INSTRUMENTS FINANCIAL INSTRUMENTS - Fair Value Information on Financial Instruments (Details) - USD ($) | Mar. 31, 2019 | Dec. 31, 2018 |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Cash and cash equivalents | $ 13,640,181 | $ 7,882,862 |
Restricted cash | 52,348,987 | 51,330,950 |
Total assets | 659,406,989 | 679,352,035 |
Collateralized loan obligations | 504,460,023 | 503,978,918 |
Total | 39,300,544 | 0 |
Total liabilities | 550,136,102 | 529,148,697 |
Carrying Value | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Cash and cash equivalents | 13,640,181 | 7,882,862 |
Restricted cash | 52,348,987 | 51,330,950 |
Commercial mortgage loans held-for-investment, at amortized cost | 585,770,803 | 555,172,891 |
Cash held in securitization trusts, at fair value | 24,357,335 | |
Total assets | 651,759,971 | 638,744,038 |
Collateralized loan obligations | 504,460,023 | 503,978,918 |
Total | 39,300,544 | |
Total liabilities | 543,760,567 | 503,978,918 |
Face Amount | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Cash and cash equivalents | 13,640,181 | 7,882,862 |
Restricted cash | 52,348,987 | 51,330,950 |
Commercial mortgage loans held-for-investment, at amortized cost | 585,770,803 | 555,172,891 |
Cash held in securitization trusts, at fair value | 24,357,335 | |
Total assets | 651,759,971 | 638,744,038 |
Collateralized loan obligations | 510,181,000 | 510,181,000 |
Total | 40,250,000 | |
Total liabilities | 550,431,000 | 510,181,000 |
Fair Value | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Cash and cash equivalents | 13,640,181 | 7,882,862 |
Restricted cash | 52,348,987 | 51,330,950 |
Commercial mortgage loans held-for-investment, at amortized cost | 585,770,803 | 555,172,891 |
Cash held in securitization trusts, at fair value | 24,357,335 | |
Total assets | 651,759,971 | 638,744,038 |
Collateralized loan obligations | 509,101,491 | 509,000,439 |
Total | 40,250,000 | |
Total liabilities | $ 549,351,491 | $ 509,000,439 |
RELATED PARTY TRANSACTIONS - Na
RELATED PARTY TRANSACTIONS - Narrative (Details) | Mar. 18, 2019USD ($) | Jan. 18, 2018 | Jun. 07, 2017 | Jan. 18, 2018USD ($) | Jun. 30, 2017 | Mar. 31, 2019USD ($)mortgage_loan | Dec. 31, 2018USD ($) | Mar. 31, 2018USD ($) | Dec. 31, 2017 | Aug. 20, 2018USD ($) |
Related Party Transaction [Line Items] | ||||||||||
Management fee percentage | 1.50% | 1.50% | ||||||||
Management fee percentage, waived portion | 0.75% | |||||||||
Management fee waived | $ 6,959 | $ 6,959 | ||||||||
Management fee expense | 553,459 | $ 576,135 | $ 576,135 | |||||||
Management fee payable | 567,000 | 577,000 | ||||||||
Reimbursable expenses | 540,037 | 746,092 | 746,092 | |||||||
Reimbursable expenses payable | $ 479,436 | 742,711 | ||||||||
Weighted average period for compensation expense not yet recognized | 3 months 18 days | |||||||||
Backstop Guarantee | Oak Circle Capital Partners, LLC | Loan Review Services | ||||||||||
Related Party Transaction [Line Items] | ||||||||||
Alternative backstop fee | $ 426,770 | |||||||||
MAXEX LLC | ||||||||||
Related Party Transaction [Line Items] | ||||||||||
Proceeds from fees | 67,325 | |||||||||
Marketing fees paid | 15,704 | |||||||||
Manager Equity Plan | ||||||||||
Related Party Transaction [Line Items] | ||||||||||
Maximum shares issued, percentage of issued and outstanding shares of common stock | 3.00% | |||||||||
Manager Equity Plan | Restricted Stock Units (RSUs) | ||||||||||
Related Party Transaction [Line Items] | ||||||||||
Compensation expense | $ 3,773 | 4,805 | ||||||||
Unrecognized compensation expense | 4,150 | $ 10,730 | ||||||||
Hunt Investment Management, LLC | ||||||||||
Related Party Transaction [Line Items] | ||||||||||
Annual management fee percentage | 1.50% | |||||||||
Quarterly management fee percentage | 0.375% | |||||||||
Quarterly incentive fee percentage | 20.00% | |||||||||
Hurdle rate percentage | 8.00% | |||||||||
Hunt Investment Management, LLC | Support Agreement | ||||||||||
Related Party Transaction [Line Items] | ||||||||||
Maximum reduction of expense reimbursement per annum (percent) | 25.00% | |||||||||
Maximum expense reimbursement reduction per annum | $ 568,000 | |||||||||
Aggregate reduction of expense reimbursement | $ 1,960,000 | |||||||||
Hunt CRE 2018-FL2, Ltd | ||||||||||
Related Party Transaction [Line Items] | ||||||||||
Unpaid Principal Balance | $ 219,400,000 | $ 225,300,000 | ||||||||
Hunt CRE 2018-FL2, Ltd | Hunt Finance Company, LLC | ||||||||||
Related Party Transaction [Line Items] | ||||||||||
Number of Loans | mortgage_loan | 1 | |||||||||
Unpaid Principal Balance | $ 18,000,000 | |||||||||
Hunt CRE 2017-FL1, Ltd. | Hunt Finance Company, LLC | ||||||||||
Related Party Transaction [Line Items] | ||||||||||
Number of Loans | mortgage_loan | 3 | |||||||||
Unpaid Principal Balance | $ 40,820,000 |
RELATED PARTY TRANSACTIONS - Un
RELATED PARTY TRANSACTIONS - Unvested Share Activity (Details) - Employee Stock Option - $ / shares | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Shares | ||
Outstanding Unvested Shares at Beginning of Period (in shares) | 4,500 | 4,500 |
Granted (in shares) | 0 | 0 |
Vested (in shares) | 0 | 0 |
Outstanding Unvested Shares at End of Period (in shares) | 4,500 | 4,500 |
Weighted Average Grant Date Fair Market Value | ||
Outstanding Unvested Shares at Beginning of Period (in dollars per share) | $ 3.40 | $ 4.33 |
Granted (in dollars per share) | 0 | 0 |
Vested (in dollars per share) | 0 | 0 |
Outstanding Unvested Shares at End of Period (in dollars per share) | $ 3.40 | $ 4.33 |
GUARANTEES (Details)
GUARANTEES (Details) - USD ($) | Jun. 15, 2016 | Dec. 31, 2018 | Mar. 31, 2019 |
Backstop Guarantee | |||
Guarantor Obligations [Line Items] | |||
Representation and warranty breach, threshold period for likely occurance | 5 years | ||
Minimum adjusted tangible new worth | $ 20,000,000 | ||
Minimum available liquidity | $ 5,000,000 | $ 5,000,000 | |
Minimum available liquidity, percentage of aggregate unpaid principal balance | 0.10% | 0.10% | |
Maximum amount of estimated future payments under the backstop guarantees | $ 1,405,182,222 | $ 1,405,182,222 | |
Indemnification Agreement | |||
Guarantor Obligations [Line Items] | |||
Maximum amount of estimated future payments under the backstop guarantees | $ 0 | ||
Loan Review Services | Backstop Guarantee | |||
Guarantor Obligations [Line Items] | |||
Minimum available liquidity, percentage of aggregate unpaid principal balance | 0.01% | ||
Oak Circle Capital Partners, LLC | Loan Review Services | Backstop Guarantee | |||
Guarantor Obligations [Line Items] | |||
Alternative backstop fee | $ 426,770 |
COMMITMENTS AND CONTINGENCIES (
COMMITMENTS AND CONTINGENCIES (Details) - USD ($) $ in Millions | Mar. 31, 2019 | Dec. 31, 2018 |
Hunt CRE 2017-FL1, Ltd. | ||
Loss Contingencies [Line Items] | ||
Unfunded commitment related to loans held-for-investment | $ 36.9 | $ 16 |
Hunt CRE 2018-FL2, Ltd | ||
Loss Contingencies [Line Items] | ||
Unfunded commitment related to loans held-for-investment | $ 54.3 | $ 55.4 |
EQUITY - Narrative (Details)
EQUITY - Narrative (Details) - USD ($) | Feb. 14, 2019 | Nov. 29, 2018 | Jan. 18, 2018 | Mar. 31, 2019 | Dec. 31, 2018 | Mar. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2018 | Dec. 27, 2016 | Dec. 15, 2015 |
Stockholders' Equity Note [Line Items] | ||||||||||
Common stock, shares authorized (in shares) | 450,000,000 | 450,000,000 | 450,000,000 | |||||||
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 | $ 0.01 | |||||||
Common stock, shares, outstanding | 23,687,664 | 23,687,664 | 23,687,664 | |||||||
Common stock, shares issued (in shares) | 23,687,664 | 23,687,664 | 23,687,664 | |||||||
Stock repurchase program, authorized amount | $ 10,000,000 | |||||||||
Preferred stock, shares authorized (in shares) | 50,000,000 | 50,000,000 | 50,000,000 | |||||||
Preferred stock, par value (in dollars per share) | $ 0.01 | $ 0.01 | $ 0.01 | |||||||
Preferred stock, shares issued (in shares) | 0 | 1,610,000 | 1,610,000 | |||||||
Preferred stock, shares outstanding (in shares) | 0 | 1,610,000 | 1,610,000 | |||||||
Preferred stock, dividend rate, percentage | 8.75% | 8.75% | 8.75% | |||||||
Preferred stock, liquidation preference (in dollars per share) | $ 25 | $ 25 | ||||||||
Dividends payable | $ 1,661,844 | $ 1,465,610 | $ 39,132 | $ 1,465,610 | ||||||
Noncontrolling interests | 99,500 | 99,500 | $ 99,500 | |||||||
Dividends on the HCMT Preferred Shares | $ 480,472 | $ 880,509 | $ 880,509 | |||||||
Stock Repurchase Program | ||||||||||
Stockholders' Equity Note [Line Items] | ||||||||||
Number of shares repurchased (in shares) | 126,856 | 126,856 | 126,856 | |||||||
Common stock repurchase activity (in shares) | 0 | |||||||||
Weighted average share price of common stock repurchased (in dollars per share) | $ 5.09 | |||||||||
Stock repurchase program, remaining authorized amount | $ 9,400,000 | |||||||||
Preferred Stock | ||||||||||
Stockholders' Equity Note [Line Items] | ||||||||||
Preferred stock, par value (in dollars per share) | $ 0.01 | $ 0.01 | ||||||||
Preferred stock, dividend rate, percentage | 8.75% | |||||||||
Preferred stock, liquidation preference (in dollars per share) | $ 25 | |||||||||
Redeemable Preferred Stock | ||||||||||
Stockholders' Equity Note [Line Items] | ||||||||||
Preferred stock, shares outstanding (in shares) | 1,610,000 | |||||||||
Preferred stock, dividend rate, percentage | 8.75% | |||||||||
Preferred stock, liquidation preference (in dollars per share) | $ 25 | |||||||||
Common Stock | ||||||||||
Stockholders' Equity Note [Line Items] | ||||||||||
Issuance of common stock, net (in shares) | 1,539,406 | |||||||||
Dividends payable | $ 1,658,136 | |||||||||
Dividends payable, amount per share (in dollars per share) | $ 0.07 | |||||||||
Noncontrolling interests | Preferred Stock | ||||||||||
Stockholders' Equity Note [Line Items] | ||||||||||
Dividends payable | $ 3,708 | |||||||||
Number of shares issued (in shares) | 125 | |||||||||
Noncontrolling interests | $ 99,500 | |||||||||
Equity raised | 125,000 | |||||||||
non-controlling interests expenses | $ 25,500 | |||||||||
Dividend rate percentage | 12.00% | |||||||||
Dividends on the HCMT Preferred Shares | $ 1,333 | |||||||||
XL Investments | ||||||||||
Stockholders' Equity Note [Line Items] | ||||||||||
Common stock shares into which warrants may be converted (in shares) | 3,753,492 | 3,753,492 | ||||||||
Common stock, shares issued (in dollars per share) | $ 13.11 | |||||||||
Hunt | Private Placement | ||||||||||
Stockholders' Equity Note [Line Items] | ||||||||||
Common stock, shares issued (in dollars per share) | $ 4.77 | |||||||||
Aggregate capital raise | $ 7,342,967 |
EQUITY - Dividends Declared (De
EQUITY - Dividends Declared (Details) - USD ($) | Mar. 31, 2019 | Dec. 31, 2018 | Mar. 31, 2018 |
Dividends [Line Items] | |||
Dividend Amount | $ 1,661,844 | $ 1,465,610 | $ 39,132 |
Common Stock | |||
Dividends [Line Items] | |||
Dividend Amount | $ 1,658,136 | ||
Cash Dividend Per Weighted Average Share (in dollars per share) | $ 0.07 | ||
Distribution One | Preferred Stock | |||
Dividends [Line Items] | |||
Dividend Amount | $ 332,626 | ||
Cash Dividend Per Weighted Average Share (in dollars per share) | $ 0.20660 | ||
Distribution One | Common Stock | |||
Dividends [Line Items] | |||
Dividend Amount | $ 1,658,136 | ||
Cash Dividend Per Weighted Average Share (in dollars per share) | $ 0.07000 | ||
Distribution Two | Preferred Stock | |||
Dividends [Line Items] | |||
Dividend Amount | $ 188,488 | ||
Cash Dividend Per Weighted Average Share (in dollars per share) | $ 0.11710 |
EARNINGS PER SHARE (Details)
EARNINGS PER SHARE (Details) - USD ($) | 3 Months Ended | |||||
Mar. 31, 2019 | Dec. 31, 2018 | Mar. 31, 2018 | Dec. 31, 2017 | Jan. 18, 2018 | Dec. 27, 2016 | |
Earnings Per Share, Basic, by Common Class, Including Two Class Method [Line Items] | ||||||
Net income (loss) | $ 1,474,767 | $ 11,315,000 | $ 11,315,000 | $ 11,315,000 | ||
Less dividends: | ||||||
Common stock | 1,658,136 | 2,314,686 | ||||
Preferred stock | 480,472 | 880,509 | ||||
Redeemable Preferred Stock Dividends | 3,093,028 | $ 0 | 0 | |||
Dividends | 5,231,636 | 3,195,195 | ||||
Undistributed earnings (deficit) | $ (3,756,869) | $ 8,119,805 | ||||
Adjustment to calculation of diluted earnings per share for warrants (in shares) | 0 | 0 | ||||
Weighted average number of shares of common stock outstanding (in shares) | 23,687,664 | 23,392,387 | 23,392,387 | |||
Common Stock | ||||||
Less dividends: | ||||||
Distributed earnings (in dollars per share) | $ 0.07 | $ 0.10 | ||||
Undistributed earnings (deficit) (in dollars per share) | (0.16) | 0.35 | ||||
Total (in dollars per share) | (0.09) | 0.45 | ||||
Unvested Share-Based Payment Awards | ||||||
Less dividends: | ||||||
Distributed earnings (in dollars per share) | 0.07 | 0.10 | ||||
Undistributed earnings (deficit) (in dollars per share) | (0.16) | 0.35 | ||||
Total (in dollars per share) | $ (0.09) | $ 0.45 | ||||
XL Investments | ||||||
Less dividends: | ||||||
Common stock shares into which warrants may be converted (in shares) | 3,753,492 | 3,753,492 |
INCOME TAXES - Taxable Income R
INCOME TAXES - Taxable Income Reconciliation (Details) - USD ($) | 3 Months Ended | 12 Months Ended | |||
Mar. 31, 2019 | Dec. 31, 2018 | Mar. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2018 | |
Income Tax Disclosure [Line Items] | |||||
Net income (loss) | $ 1,474,767 | $ 11,315,000 | $ 11,315,000 | $ 11,315,000 | |
REIT Operation | |||||
Income Tax Disclosure [Line Items] | |||||
Net income (loss) | (1,311,000) | (12,559,000) | |||
Five Oaks Investment Corp | |||||
Income Tax Disclosure [Line Items] | |||||
Net income (loss) | 1,411,000 | 12,829,000 | |||
Subsidiaries | |||||
Income Tax Disclosure [Line Items] | |||||
Net income (loss) | 100,000 | 270,000 | $ 1,300,000 | ||
Capitalized transaction fees | (10,000) | (10,000) | |||
Unrealized gain (loss) | 380,000 | (50,000) | |||
Deferred income | 0 | 52,000 | |||
Tax income of taxable subsidiary before utilization of net operating losses | 470,000 | 262,000 | |||
Current state tax expense | (102,000) | 0 | |||
Utilization of net operating losses | (68,000) | (262,000) | |||
Net tax income of taxable subsidiary | $ 300,000 | $ 0 |
INCOME TAXES - Deferred Tax Ass
INCOME TAXES - Deferred Tax Assets (Details) - USD ($) $ in Thousands | Mar. 31, 2019 | Dec. 31, 2018 |
Non-current Deferred Tax Asset (Liability) | ||
Accumulated net operating losses of TRS | $ 297 | $ 263 |
Unrealized gain | 417 | 245 |
Capitalized transaction costs | 133 | 112 |
Deferred tax asset (liability) | $ 847 | $ 620 |
INCOME TAXES - Narrative (Detai
INCOME TAXES - Narrative (Details) - USD ($) | Apr. 12, 2019 | Mar. 31, 2019 | Dec. 31, 2018 | Mar. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2018 |
Income Tax Disclosure [Line Items] | ||||||
Percent of valuation allowance | 100.00% | |||||
Net income (loss) | $ 1,474,767 | $ 11,315,000 | $ 11,315,000 | $ 11,315,000 | ||
Net operating loss carryforwards | 1,000,000 | |||||
Accrued tax liability from REIT Testing | $ 1,960,000 | $ 1,960,000 | ||||
Internal Revenue Service (IRS) | Subsequent Event | ||||||
Income Tax Disclosure [Line Items] | ||||||
Income taxes, interest paid | $ 1,960,000 | |||||
Subsidiaries | ||||||
Income Tax Disclosure [Line Items] | ||||||
Net income (loss) | $ 100,000 | $ 270,000 | $ 1,300,000 |