Document_and_Entity_Informatio
Document and Entity Information | 9 Months Ended | |
Sep. 30, 2013 | Nov. 07, 2013 | |
Document And Entity Information [Abstract] | ' | ' |
Document Type | '10-Q | ' |
Amendment Flag | 'false | ' |
Document Period End Date | 30-Sep-13 | ' |
Document Fiscal Year Focus | '2013 | ' |
Document Fiscal Period Focus | 'Q3 | ' |
Entity Registrant Name | 'Cherry Hill Mortgage Investment Corporation | ' |
Entity Central Index Key | '0001571776 | ' |
Current Fiscal Year End Date | '--12-31 | ' |
Entity Filer Category | 'Non-accelerated Filer | ' |
Entity Common Stock, Shares Outstanding | ' | 7,500,000 |
Consolidated_Balance_Sheet
Consolidated Balance Sheet (USD $) | Sep. 30, 2013 | Dec. 31, 2012 |
Assets | ' | ' |
Cash | $14,826 | $1,000 |
Total Assets | 14,826 | 1,000 |
Liabilities | ' | ' |
Due to Cherry Hill Mortgage Management, LLC | 41,135 | ' |
Accrued expenses | 105,000 | 25,000 |
Total Liabilities | 146,135 | 25,000 |
Stockholder's Deficit | ' | ' |
Common stock, $0.01 par value, 500,000,000 shares authorized at September 30, 2013 and 1,000 shares authorized at December 31, 2012, 1,000 shares issued and outstanding | 10 | 10 |
Preferred stock, $0.01 par value, 100,000,000 shares authorized at September 30, 2013 and no shares authorized at December 31, 2012, no shares issued and outstanding | ' | ' |
Additional paid-in capital | 990 | 990 |
Deficit accumulated during the development stage | -132,309 | -25,000 |
Total Stockholder's Deficit | -131,309 | -24,000 |
Total Liabilities & Equity | $14,826 | $1,000 |
Consolidated_Balance_Sheet_Par
Consolidated Balance Sheet (Parenthetical) (USD $) | Sep. 30, 2013 | Dec. 31, 2012 |
Statement Of Financial Position [Abstract] | ' | ' |
Common stock, par value | $0.01 | $0.01 |
Common stock, shares authorized | 500,000,000 | 1,000 |
Common stock, shares issued | 1,000 | 1,000 |
Common stock, shares outstanding | 1,000 | 1,000 |
Preferred stock, par value | $0.01 | $0.01 |
Preferred stock, shares authorized | 100,000,000 | 0 |
Preferred stock, shares issued | 0 | 0 |
Preferred stock, shares outstanding | 0 | 0 |
Consolidated_Statements_of_Ope
Consolidated Statements of Operations (USD $) | 3 Months Ended | 9 Months Ended | 11 Months Ended |
Sep. 30, 2013 | Sep. 30, 2013 | Sep. 30, 2013 | |
Income Statement [Abstract] | ' | ' | ' |
Audit fees | $35,000 | $105,000 | $130,000 |
Administrative expenses | 1,054 | 2,309 | 2,309 |
Total expenses | 36,054 | 107,309 | 132,309 |
Net loss | $36,054 | $107,309 | $132,309 |
Consolidated_Statements_of_Sto
Consolidated Statements of Stockholder's Deficit (USD $) | Total | Common Stock [Member] | Additional Paid-In Capital [Member] | Deficit Accumulated During the Development Stage [Member] |
Beginning balance (date of inception) at Oct. 31, 2012 | ' | ' | ' | ' |
Common shares issued to founder on December 4th, 2012 | $1,000 | $10 | $990 | ' |
Common shares issued to founder on December 4th, 2012, Shares | ' | 1,000 | ' | ' |
Net loss | -25,000 | ' | ' | -25,000 |
Ending balance at Dec. 31, 2012 | -24,000 | 10 | 990 | -25,000 |
Ending balance, Shares at Dec. 31, 2012 | 1,000 | 1,000 | ' | ' |
Net loss | -107,309 | ' | ' | -107,309 |
Ending balance at Sep. 30, 2013 | ($131,309) | $10 | $990 | ($132,309) |
Ending balance, Shares at Sep. 30, 2013 | 1,000 | 1,000 | ' | ' |
Consolidated_Statements_of_Cas
Consolidated Statements of Cash Flows (USD $) | 2 Months Ended | 3 Months Ended | 9 Months Ended | 11 Months Ended |
Dec. 31, 2012 | Sep. 30, 2013 | Sep. 30, 2013 | Sep. 30, 2013 | |
Cash flows from operating activities | ' | ' | ' | ' |
Net loss | ($25,000) | ($36,054) | ($107,309) | ($132,309) |
Net cash provided (used) in operating activities: | ' | ' | ' | ' |
Increase in accrued expenses | ' | ' | 80,000 | 105,000 |
Net cash used in operating activities | ' | ' | -27,309 | -27,309 |
Cash flows from financing activities | ' | ' | ' | ' |
Increase in Due to affiliate | ' | ' | 41,135 | 41,135 |
Proceeds from issuance of common shares to founder | ' | ' | ' | 1,000 |
Net cash provided by financing activities | ' | ' | 41,135 | 42,135 |
Net increase (decrease) in cash | ' | ' | 13,826 | 14,826 |
Cash beginning of period | ' | ' | 1,000 | ' |
Cash end of period | $1,000 | $14,826 | $14,826 | $14,826 |
Organization_and_Basis_of_Pres
Organization and Basis of Presentation | 9 Months Ended |
Sep. 30, 2013 | |
Accounting Policies [Abstract] | ' |
Organization and Basis of Presentation | ' |
1. Organization and Basis of Presentation | |
Cherry Hill Mortgage Investment Corporation (together with its consolidated subsidiaries, the “Company”) was organized in the state of Maryland on October 31, 2012 to invest in residential mortgage assets in the United States. Under the Company’s charter, the Company was authorized at December 31, 2012 to issue 1,000 shares of common stock. On June 6, 2013, the Company amended and restated its charter and increased its authorized capitalization. Accordingly, at September 30, 2013, the Company was authorized to issue up to 500,000,000 shares of common stock and 100,000,000 shares of preferred stock, each with a par value of $0.01 per share. The Company commenced operations on or about October 9, 2013. | |
The accompanying condensed consolidated financial statements are prepared in accordance with accounting principles generally accepted in the United States (“GAAP”) for interim financial information and pursuant to the requirements for reporting on Form 10-Q and Article 10 of Regulation S-X. The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of income and expenses during the reporting period. Actual results could differ from those estimates. | |
The accompanying condensed consolidated financial statements include the accounts of the Company’s subsidiaries, Cherry Hill Operating Partnership LP, Cherry Hill QRS I, LLC, Cherry Hill QRS II, LLC and Cherry Hill TRS, LLC. Significant intercompany accounts and transactions have been eliminated. In the opinion of management, all adjustments, consisting solely of normal recurring accruals, necessary for the fair presentation of financial statements for the interim periods have been included. The current period’s results of operations are not necessarily indicative of results that ultimately may be achieved for the year. |
Initial_Public_Offering_and_Co
Initial Public Offering and Concurrent Private Placement | 9 Months Ended |
Sep. 30, 2013 | |
Equity [Abstract] | ' |
Initial Public Offering and Concurrent Private Placement | ' |
2. Initial Public Offering and Concurrent Private Placement | |
On October 9, 2013, the Company completed an initial public offering (the “IPO”) of 6,500,000 shares of common stock and a concurrent private placement of 1,000,000 shares of common stock. The IPO and concurrent private placement resulted in the sale of 7,500,000 shares of common stock, at a price per share of $20.00. The net proceeds to the Company from the IPO and the concurrent private placement were approximately $148 million, after deducting offering-related expenses payable by the Company. The Company did not conduct any activity prior to the IPO and the concurrent private placement. Substantially all of the net proceeds from the IPO are intended to be used to invest in excess mortgage servicing rights on residential mortgage loans (“Excess MSRs”) and Agency residential mortgage-backed securities (“RMBS”). | |
The Company is subject to the risks involved with real estate and real estate-related debt instruments. These include, among others, the risks normally associated with changes in the general economic climate, changes in the mortgage market, changes in tax laws, interest rate levels, and the availability of financing. | |
Prior to the IPO, the sole stockholder of the Company was Stanley Middleman. On December 4, 2012, Mr. Middleman made a $1,000 initial capital contribution to the Company in exchange for 1,000 shares of common stock, and, on October 9, 2013, the Company repurchased these shares from Mr. Middleman for $1,000. | |
The Company is managed by Cherry Hill Mortgage Management, LLC (the “Manager”), a Delaware limited liability company which is controlled by Mr. Middleman. | |
The Company was taxed for U.S. federal income tax purposes as a Subchapter C corporation for the two month period from October 31, 2012 (date of inception) to December 31, 2012. On February 13, 2013, the Company elected to be taxed for U.S. federal income tax purposes as a Subchapter S corporation effective January 1, 2013, and, as such, all federal tax liabilities were the responsibility of the sole stockholder. In anticipation of the IPO, the Company elected to revoke its Subchapter S election on October 2, 2013. The Company will elect and intends to qualify as a REIT for U.S. federal income tax purposes for its short taxable year ending December 31, 2013. |
Significant_Accounting_Policie
Significant Accounting Policies | 9 Months Ended |
Sep. 30, 2013 | |
Accounting Policies [Abstract] | ' |
Significant Accounting Policies | ' |
3. Significant Accounting Policies | |
Use of estimates | |
The preparation of the financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the balance sheet, in addition to the reported amount revenues and expenses during the reporting period. Actual results could differ from those estimates. Significant estimates include the valuation allowance on deferred tax assets. | |
Offering costs | |
Offering costs incurred in connection with the Company’s IPO will be reflected as a reduction of additional paid-in-capital. Costs incurred that are not directly associated with the completion of the IPO will be expensed as incurred. As of September 30, 2013, the Manager had incurred approximately $1.6 million of costs relating to the IPO. Offering costs incurred in connection with the IPO included, among others, the fees and disbursements of the Company’s counsel, the costs of printing the prospectus for the IPO, the fees paid to apply to list the Company’s common stock and all filing fees paid in connection with the IPO. However, the Manager agreed to pay the underwriting discounts and commissions and the structuring fee, without reimbursement from the Company. | |
Cash and cash Equivalents | |
Cash and cash equivalents consist of unrestricted demand deposits and highly liquid investments with original maturities of three months or less. Cash and cash equivalents are carried at cost which approximates fair value. |
Related_Party_Transactions
Related Party Transactions | 9 Months Ended |
Sep. 30, 2013 | |
Related Party Transactions [Abstract] | ' |
Related Party Transactions | ' |
4. Related Party Transactions | |
The Company has entered into a management agreement with the Manager, pursuant to which the Manager provides for the day-to-day management of the Company’s operations (the “Management Agreement”). The Management Agreement requires the Manager to manage the Company’s business affairs in conformity with the policies and the investment guidelines that are approved and monitored by the Company’s Board of Directors. All of the Company’s executive officers and the officers and employees of the Manager are also officers or employees of Freedom Mortgage Corporation (“Freedom Mortgage”). | |
The Manager is a party to a services agreement with Freedom Mortgage, pursuant to which Freedom Mortgage provides to the Manager the personnel, services and resources as needed by the Manager to enable the Manager to carry out its obligations and responsibilities under the Management Agreement (the “Services Agreement”). The Company is a named third-party beneficiary to the Services Agreement and, as a result, has, as a non-exclusive remedy, a direct right of action against Freedom Mortgage in the event of any breach by the Manager of any of its duties, obligations or agreements under the Management Agreement that arise out of or result from any breach by Freedom Mortgage of its obligations under the Services Agreement. The Services Agreement will terminate upon the termination of the Management Agreement. Pursuant to the Services Agreement, the Manager will make certain payments to Freedom Mortgage in connection with the services provided. | |
Refer to Note 7 (Subsequent Events) for more information regarding related party transactions. |
Indirect_Expenses
Indirect Expenses | 9 Months Ended |
Sep. 30, 2013 | |
Other Income And Expenses [Abstract] | ' |
Indirect Expenses | ' |
5. Indirect Expenses | |
From October 31, 2012 (date of inception) to December 31, 2012, and for the nine months ended September 30, 2013, the Company shared office space with Freedom Mortgage. In accordance with the Management Agreement between the Company and the Manager, the Manager has not allocated rent, overhead, reimbursable executives’ salaries, and other miscellaneous office expenses to the Company, as it had not commenced operations as of September 30, 2013 and had not generated revenue during the period. The Manager will commence allocating expenses to the Company in October 2013, the first month during which the Company commences operations subsequent to the completion of the IPO and the concurrent private placement. The Company monitors and maintains a separate record of such expenses. For the nine month period ending September 30, 2013 and for the cumulative period from October 31, 2012 (date of inception) to September 30, 2013, such expenses amounted to approximately $800 thousand and approximately $840 thousand, respectively. | |
The Manager has adequate resources independent of the Company to pay these expenses, and the Company has no additional obligation, either direct or indirect, to compensate any party for these expenses. |
Income_Taxes
Income Taxes | 9 Months Ended |
Sep. 30, 2013 | |
Income Tax Disclosure [Abstract] | ' |
Income Taxes | ' |
6. Income Taxes | |
For the period October 31, 2012 (date of inception) through December 31, 2012, the Company was taxable as a corporation, and as such, was subject to federal, state and local taxation. The Company incurred certain expenses during the period but had not commenced operations. The Company recorded a deferred tax asset of $10 thousand related to these start up expenses. Given that the Company is in its first year of operations and is not expected to realize the benefits of the deferred tax asset, management concluded that a full valuation allowance is required. | |
On January 1, 2013, the Company elected to be taxed as a Subchapter S corporation and as such all federal tax liabilities are the responsibility of the Company’s sole stockholder. The Company had no state and local income tax liability for the period that it was taxed as a Subchapter S corporation. On October 2, 2013, the Company elected to revoke its Subchapter S election. |
Subsequent_Events
Subsequent Events | 9 Months Ended |
Sep. 30, 2013 | |
Subsequent Events [Abstract] | ' |
Subsequent Events | ' |
7. Subsequent Events | |
On October 9, 2013, the Company entered into the Strategic Alliance Agreement with Freedom Mortgage, to benefit from having a consistent and predictable source of real estate assets from Freedom Mortgage. | |
On October 9, 2013, the Company also entered into the Flow and Bulk Excess MSR Acquisition Agreement with Freedom Mortgage, pursuant to which Freedom Mortgage agrees to offer to the Company, and the Company, at its option, may agree to acquire, interests in excess mortgage servicing rights on single family, residential mortgage loans that Freedom Mortgage originates through one of its channels or acquires in bulk from third parties. | |
On October 9, 2013, the Company also entered into the Pool 1 Excess MSR Acquisition and Recapture Agreement (“Pool 1 Agreement”) with Freedom Mortgage, to acquire Excess MSRs. Under the Pool 1 Agreement, the Company committed to invest approximately $60.6 million to acquire an 85% participation interest in the Excess MSRs related to a pool of predominantly fixed rate, Ginnie Mae-eligible FHA and VA mortgage loans originated by Freedom Mortgage. | |
On October 9, 2013, the Company also entered into the Pool 2 Excess MSR Acquisition and Recapture Agreement (“Pool 2 Agreement”) with Freedom Mortgage, to acquire Excess MSRs. Under the Pool 2 Agreement, the Company committed to invest approximately $38.4 million to acquire a 50% participation interest in the Excess MSRs related to a pool of Ginnie Mae-eligible VA hybrid adjustable rate mortgages (“ARMs”) originated by a third party seller. | |
As of November 5, 2013, the Company had acquired approximately $299 million of Agency RMBS, backed by whole pools of 30-year, 20-year and 15-year fixed rate mortgages, and approximately $24 million of forward-settling Agency RMBS where the pool is “to-be-announced” (“TBA”). As of November 5, 2013, the Company had an aggregate of approximately $261 million of short-term borrowings under master repurchase agreements with seven counterparties to finance the acquisition of these Agency RMBS. These borrowings are secured by cash collateral and a portion of the Company’s Agency RMBS and bear interest at rates that have historically moved in close relationship to LIBOR. |
Significant_Accounting_Policie1
Significant Accounting Policies (Policies) | 9 Months Ended |
Sep. 30, 2013 | |
Accounting Policies [Abstract] | ' |
Use of Estimates | ' |
Use of estimates | |
The preparation of the financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the balance sheet, in addition to the reported amount revenues and expenses during the reporting period. Actual results could differ from those estimates. Significant estimates include the valuation allowance on deferred tax assets. | |
Offering Costs | ' |
Offering costs | |
Offering costs incurred in connection with the Company’s IPO will be reflected as a reduction of additional paid-in-capital. Costs incurred that are not directly associated with the completion of the IPO will be expensed as incurred. As of September 30, 2013, the Manager had incurred approximately $1.6 million of costs relating to the IPO. Offering costs incurred in connection with the IPO included, among others, the fees and disbursements of the Company’s counsel, the costs of printing the prospectus for the IPO, the fees paid to apply to list the Company’s common stock and all filing fees paid in connection with the IPO. However, the Manager agreed to pay the underwriting discounts and commissions and the structuring fee, without reimbursement from the Company. | |
Cash and Cash Equivalents | ' |
Cash and cash Equivalents | |
Cash and cash equivalents consist of unrestricted demand deposits and highly liquid investments with original maturities of three months or less. Cash and cash equivalents are carried at cost which approximates fair value. |
Organization_and_Basis_of_Pres1
Organization and Basis of Presentation - Additional Information (Detail) (USD $) | 9 Months Ended | |
Sep. 30, 2013 | Dec. 31, 2012 | |
Organization Consolidation And Presentation Of Financial Statements [Abstract] | ' | ' |
Common stock, shares authorized | 500,000,000 | 1,000 |
Preferred stock, shares authorized | 100,000,000 | 0 |
Common stock, par value | $0.01 | $0.01 |
Preferred stock, par value | $0.01 | $0.01 |
Date of commencement of operations | 9-Oct-13 | ' |
Initial_Public_Offering_and_Co1
Initial Public Offering and Concurrent Private Placement - Additional Information (Detail) (USD $) | 2 Months Ended | 9 Months Ended | 0 Months Ended | ||||
Dec. 31, 2012 | Sep. 30, 2013 | Dec. 04, 2012 | Oct. 09, 2013 | Oct. 09, 2013 | Oct. 09, 2013 | Oct. 09, 2013 | |
Stanley Middleman [Member] | Subsequent Event [Member] | Subsequent Event [Member] | Subsequent Event [Member] | Subsequent Event [Member] | |||
Initial Public Offering [Member] | Private Placement [Member] | Stanley Middleman [Member] | |||||
Equity [Line Items] | ' | ' | ' | ' | ' | ' | ' |
Common stock issued, shares | ' | ' | 1,000 | 7,500,000 | 6,500,000 | 1,000,000 | ' |
Common stock issued through initial public offering and concurrent private placement, price per share | ' | ' | ' | $20 | ' | ' | ' |
Net proceeds from IPO and concurrent private placement | $1,000 | ' | ' | $148,000,000 | ' | ' | ' |
Date of conducting IPO and concurrent private placement of common stock | ' | 4-Oct-13 | ' | ' | ' | ' | ' |
Initial capital contribution by sole stockholder to the company | ' | ' | 1,000 | ' | ' | ' | ' |
Amount of repurchased shares | ' | ' | ' | ' | ' | ' | $1,000 |
Significant_Accounting_Policie2
Significant Accounting Policies - Additional Information (Detail) (USD $) | 9 Months Ended |
In Millions, unless otherwise specified | Sep. 30, 2013 |
Accounting Policies [Abstract] | ' |
Expenses related to IPO incurred by the Manager | $1.60 |
Indirect_Expenses_Additional_I
Indirect Expenses - Additional Information (Detail) (USD $) | 9 Months Ended | 11 Months Ended |
In Thousands, unless otherwise specified | Sep. 30, 2013 | Sep. 30, 2013 |
Other Income And Expenses [Abstract] | ' | ' |
Rent, overhead, reimbursable executives' salaries, and other miscellaneous office expenses not allocated to the Company | $800 | $840 |
Additional obligation of the Company for indirect expenses | $0 | $0 |
Income_Taxes_Additional_Inform
Income Taxes - Additional Information (Detail) (USD $) | Sep. 30, 2013 | Dec. 31, 2012 |
In Thousands, unless otherwise specified | S Corporation [Member] | |
Income Taxes [Line Items] | ' | ' |
Deferred tax assets related to start up expenses | $10 | ' |
State and local income tax liability | ' | $0 |
Subsequent_Events_Additional_I
Subsequent Events - Additional Information (Detail) (Subsequent Event [Member], USD $) | 0 Months Ended | |
In Millions, unless otherwise specified | Nov. 05, 2013 | Oct. 09, 2013 |
Subsequent Event [Line Items] | ' | ' |
Number of real estate securities under repurchase agreement | 7 | ' |
Residential Mortgage-backed Securities [Member] | ' | ' |
Subsequent Event [Line Items] | ' | ' |
Acquired securities | 299 | ' |
Amount used to finance the investments in Agency RMBS | 261 | ' |
Forward Settling Residential Mortgage-backed Securities [Member] | ' | ' |
Subsequent Event [Line Items] | ' | ' |
Acquired securities | 24 | ' |
Pool 1 Agreement [Member] | ' | ' |
Subsequent Event [Line Items] | ' | ' |
Commitment to invest in excess MSRs | ' | 60.6 |
Percentage of participation interest under commitment to invest in excess MSRs | ' | 85.00% |
Fixed rate mortgage period | '30 years | ' |
Pool 2 Agreement [Member] | ' | ' |
Subsequent Event [Line Items] | ' | ' |
Commitment to invest in excess MSRs | ' | $38.40 |
Percentage of participation interest under commitment to invest in excess MSRs | ' | 50.00% |
Fixed rate mortgage period | '20 years | ' |
Pool 3 Agreement [Member] | ' | ' |
Subsequent Event [Line Items] | ' | ' |
Fixed rate mortgage period | '15 years | ' |