Document and Entity Information
Document and Entity Information | 9 Months Ended |
Sep. 30, 2020shares | |
Cover [Abstract] | |
Document Type | 10-Q |
Amendment Flag | false |
Document Period End Date | Sep. 30, 2020 |
Document Fiscal Year Focus | 2020 |
Document Fiscal Period Focus | Q3 |
No Trading Symbol Flag | true |
Entity Registrant Name | REDWOOD MORTGAGE INVESTORS VIII |
Entity Central Index Key | 0000889123 |
Current Fiscal Year End Date | --12-31 |
Entity Filer Category | Non-accelerated Filer |
Entity Small Business | true |
Entity Emerging Growth Company | false |
Entity Common Stock, Shares Outstanding | 0 |
Entity Current Reporting Status | Yes |
Entity Interactive Data Current | Yes |
Entity Shell Company | false |
Document Quarterly Report | true |
Document Transition Report | false |
Entity File Number | 000-27816 |
Entity Incorporation, State or Country Code | CA |
Entity Tax Identification Number | 94-3158788 |
Entity Address, Address Line One | 177 Bovet Road |
Entity Address, Address Line Two | Suite 520 |
Entity Address, City or Town | San Mateo |
Entity Address, State or Province | CA |
Entity Address, Postal Zip Code | 94402 |
City Area Code | 650 |
Local Phone Number | 365-5341 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Thousands | Sep. 30, 2020 | Dec. 31, 2019 |
ASSETS | ||
Cash, in banks | $ 313 | $ 4,142 |
Loans held for sale | 2,331 | |
Principal | 74,970 | 86,203 |
Advances | 164 | 167 |
Accrued interest | 968 | 711 |
Prepaid interest | (121) | |
Loan balances secured by deeds of trust | 76,102 | 86,960 |
Allowance for loan losses | (50) | (50) |
Loan balances secured by deeds of trust, net | 76,052 | 86,910 |
Real estate owned (REO), net | 8,922 | 3,252 |
Debt issuance costs, net | 82 | |
Other assets, net | 53 | 50 |
Total assets | 87,753 | 94,354 |
LIABILITIES AND PARTNERS' CAPITAL | ||
Accounts payable | 223 | 15 |
Accrued liabilities | 821 | 550 |
Line of credit | 1,515 | |
Promissory note to related party (Note 3) | 850 | |
Payable to related party (Note 3) | 77 | |
Mortgages payable | 2,449 | |
Total liabilities | 5,935 | 565 |
Commitments and Contingencies (Note 8) | ||
Partners’ capital | ||
Limited partners’ capital | 86,603 | 98,770 |
General partners’ deficit | (661) | (689) |
Total partners’ capital | 85,942 | 98,081 |
Receivable from manager (formation loan) | (4,124) | (4,292) |
Partners’ capital, net of formation loan | 81,818 | 93,789 |
Total liabilities and partners’ capital | $ 87,753 | $ 94,354 |
Consolidated Income Statements
Consolidated Income Statements (Unaudited) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Revenue | ||||
Interest income | $ 1,574,000 | $ 1,815,000 | $ 5,419,000 | $ 6,124,000 |
Interest expense | ||||
Line of credit | (15,000) | (28,000) | ||
Mortgages payable | (26,000) | (33,000) | ||
Total interest expense | (41,000) | (61,000) | ||
Net interest income | 1,533,000 | 1,815,000 | 5,358,000 | 6,124,000 |
Late fees | 41,000 | 11,000 | 54,000 | 29,000 |
Gain on sale, loans | 38,000 | 0 | 38,000 | |
Total revenue, net | 1,574,000 | 1,864,000 | 5,412,000 | 6,191,000 |
Recovery of loan losses | (8,000) | (1,613,000) | (134,000) | (1,613,000) |
Operations expense | ||||
Mortgage servicing fees | 286,000 | 330,000 | 924,000 | 1,086,000 |
Asset management fees | 84,000 | 187,000 | 265,000 | 408,000 |
Costs from Redwood Mortgage Corp. | 185,000 | 439,000 | 676,000 | 1,067,000 |
Professional services | 275,000 | 347,000 | 885,000 | 748,000 |
REO, net (Note 5) | 51,000 | 187,000 | 23,000 | 249,000 |
Other | 1,000 | (5,000) | 18,000 | 13,000 |
Total operations expense | 882,000 | 1,485,000 | 2,791,000 | 3,571,000 |
Net income | 700,000 | 1,992,000 | 2,755,000 | 4,233,000 |
Limited partners (99%) | 693,000 | 1,972,000 | 2,727,000 | 4,191,000 |
General partners (1%) | $ 7,000 | $ 20,000 | $ 28,000 | $ 42,000 |
Consolidated Income Statement_2
Consolidated Income Statements (Unaudited) (Parenthetical) - Redwood Mortgage Investors VIII [Member] | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Limited partners | 99.00% | 99.00% | 99.00% | 99.00% |
General partners | 1.00% | 1.00% | 1.00% | 1.00% |
Consolidated Statements of Chan
Consolidated Statements of Changes in Partners' Capital (Unaudited) - USD ($) $ in Thousands | Total | Capital Subject to Withdrawals Net [Member]Limited Partner [Member] | Partners Capital (Deficit) [Member]General Partner [Member] | Capital Units [Member] |
Beginning balance at Dec. 31, 2018 | $ 121,012 | $ (734) | $ 120,278 | |
Net income | $ 4,233 | 4,191 | 42 | 4,233 |
Distributions | (1,765) | (1,765) | ||
Withdrawals | (18,860) | (18,860) | ||
Ending balance at Sep. 30, 2019 | 104,578 | (692) | 103,886 | |
Beginning balance at Jun. 30, 2019 | 108,998 | (712) | 108,286 | |
Net income | 1,972 | 20 | 1,992 | |
Distributions | (569) | (569) | ||
Withdrawals | (5,823) | (5,823) | ||
Ending balance at Sep. 30, 2019 | 104,578 | (692) | 103,886 | |
Beginning balance at Dec. 31, 2019 | 93,789 | 98,770 | (689) | 98,081 |
Net income | 2,755 | 2,727 | 28 | 2,755 |
Distributions | (1,400) | (1,400) | ||
Withdrawals | (13,494) | (13,494) | ||
Ending balance at Sep. 30, 2020 | 81,818 | 86,603 | (661) | 85,942 |
Beginning balance at Jun. 30, 2020 | 90,537 | (668) | 89,869 | |
Net income | 693 | 7 | 700 | |
Distributions | (457) | (457) | ||
Withdrawals | (4,170) | (4,170) | ||
Ending balance at Sep. 30, 2020 | $ 81,818 | $ 86,603 | $ (661) | $ 85,942 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows (Unaudited) | 9 Months Ended | |
Sep. 30, 2020USD ($) | Sep. 30, 2019USD ($) | |
Operating Activities | ||
Interest income received | $ 4,879,000 | $ 5,735,000 |
Late fees | 54,000 | 29,000 |
Operations expense | (2,514,000) | (2,858,000) |
Total cash provided by operating activities | 2,419,000 | 2,906,000 |
Investing Activities | ||
Principal collected - secured | 7,441,000 | 56,346,000 |
Loan transferred to related mortgage fund | 2,297,000 | |
Loans sold to non-affiliate, net | 7,832,000 | |
Loans funded | (3,775,000) | (52,838,000) |
Recovery of loan losses | 134,000 | 1,613,000 |
Advances made on loans | (62,000) | (91,000) |
Total - Loans | 6,035,000 | 12,862,000 |
REO - sales proceeds, net | 186,000 | |
Total cash provided by investing activities | 6,221,000 | 12,862,000 |
Partners’ capital | ||
Partner withdrawals | (13,494,000) | (18,860,000) |
Partner distributions | (1,400,000) | (1,765,000) |
Early withdrawal penalties | 168,000 | 323,000 |
Cash distributions to partners, net | (14,726,000) | (20,302,000) |
Borrowings - draws on line of credit | 1,515,000 | |
Borrowings - debt issuance costs - line of credit | (108,000) | |
Borrowings - promissory note to related party | 850,000 | |
Cash from borrowings | 2,257,000 | |
Total cash used in financing activities | (12,469,000) | (20,302,000) |
Net decrease in cash | (3,829,000) | (4,534,000) |
Cash, beginning of period | 4,142,000 | 13,607,000 |
Cash, end of period | 313,000 | 9,073,000 |
Net income | 2,755,000 | 4,233,000 |
Adjustments to reconcile net income to net cash provided by operating activities | ||
Recovery of loan losses | (134,000) | (1,613,000) |
Amortization of debt issuance costs | 27,000 | |
REO – gain on disposal | (68,000) | |
(Gain) on sale, loans | 0 | (38,000) |
REO – impairment (recovery) | 210,000 | |
Change in operation assets and liabilities | ||
Accrued interest | (420,000) | (52,000) |
Prepaid interest | (121,000) | (337,000) |
Other assets | 23,000 | |
Accounts payable and accrued liabilities | 303,000 | 162,000 |
Payable to related parties | 77,000 | 318,000 |
Total cash provided by operating activities | 2,419,000 | $ 2,906,000 |
Supplemental disclosures of cash flow information - REO | ||
Real estate acquired by foreclosure | 5,787,000 | |
Mortgage assumed at foreclosure | (2,449,000) | |
Mortgage interest, property taxes, and other liabilities assumed at foreclosure | (175,000) | |
Settlement of loan and interest receivable net of liabilities assumed at foreclosure | $ (3,163,000) |
Consolidated Statements of Ca_2
Consolidated Statements of Cash Flows (Unaudited) (Parenthetical) - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2020 | Sep. 30, 2019 | |
Statement Of Cash Flows [Abstract] | ||
Loans transferred to held for sale | $ 2,331,000 | $ 0 |
Organization and General
Organization and General | 9 Months Ended |
Sep. 30, 2020 | |
Accounting Policies [Abstract] | |
Organization and General | NOTE 1 – ORGANIZATION AND GENERAL In the opinion of management of Redwood Mortgage Corp. (RMC or the manager), the accompanying unaudited consolidated financial statements contain all adjustments, consisting of normal, recurring adjustments, necessary to present fairly the consolidated financial information included therein. These unaudited consolidated financial statements should be read in conjunction with the audited consolidated financial statements included in the partnership’s Form 10-K for the year ended December 31, 2019 filed with the U.S. Securities and Exchange Commission (SEC). The results of operations for the three and nine months ended September 30, 2020 are not necessarily indicative of the operating results to be expected for the full year. Redwood Mortgage Investors VIII, a California Limited Partnership (RMI VIII or the partnership), was formed in 1993 to engage in business as a mortgage lender and investor by making and holding-for-investment mortgage loans secured by California real estate, primarily by first and second deeds of trust. The ongoing sources of funds for loans are the proceeds (net of withdrawals from partner capital accounts, subject to limitations, and operating expenses) from: • loan payoffs; • borrowers’ monthly principal payments; • earnings retained (i.e., not distributed) in partners’ capital accounts; • line of credit advances; • loan sales to unaffiliated third parties and loan transfers by executed assignment to related mortgage funds; • REO sales; and, • payments from RMC on the outstanding balance of the formation loan. The mortgage loans the partnership funds and/or invests in, are arranged and generally are serviced by RMC. The ongoing ability of the partnership to source funds for loans from one or more of the ongoing sources above may be adversely affected by the COVID-19 pandemic and by the social and governmental responses and severe economic disruptions caused by the pandemic (see COVID-19, below). Loans generally are funded at a fixed interest rate with a loan term of up to five years. Loans acquired are generally done so within the first six months of origination, and purchased at the current par value, which approximates fair value. The partnership intends to hold until maturity the loans in which it invests and does not presently intend to invest in mortgage loans primarily for the purpose of reselling such loans in the ordinary course of business; however, the partnership may sell mortgage loans (or fractional interests therein) when the manager determines that it appears to be advantageous for the partnership to do so, based upon then current interest rates, the length of time that the loan has been held by the partnership, the partnership’s credit risk and concentration risk and the overall investment objectives of the partnership. Loans sold to third parties may be sold for par, at a premium or, in the case of non-performing or under performing loans, at a discount. Partnership loans may be sold to third parties or to the manager or its related mortgage funds; however, any loan sold to the manager or a related mortgage fund thereof will be sold for a purchase price equal to the greater of (i) the par value of the loan or (ii) the fair market value of the loan. The manager will not receive commissions or broker fees with respect to loan sales conducted for the partnership; however, selling loans will increase partnership capital available for investing in new loans for which the manager will earn brokerage fees and other forms of compensation. The rights, duties, and powers of the limited partners and general partners of the partnership are governed by the Limited Partnership Agreement (Partnership Agreement). The following is a summary of certain provisions of the Partnership Agreement and is qualified in its entirety by the terms of the Partnership Agreement itself. Limited partners should refer to the Partnership Agreement for complete disclosure of its provisions. The partnership is externally managed by RMC, a general partner. The general partners are RMC and Michael R. Burwell (Burwell), an individual. The manager is solely responsible for managing the business and affairs of RMI VIII, subject to the voting rights of the partners on specified matters. The manager acting alone has the power and authority to act for and bind the partnership. RMC provides the personnel and services necessary to conduct the business as RMI VIII has no employees of its own. The general partners are entitled to one percent (1%) of profits or loss of the partnership. In 2010, and continuing until December 31, 2019, RMC assigned its right to two-thirds of the one percent (0.66%) of RMI VIII’s income or losses to Burwell in exchange for Burwell assuming one hundred percent (100%) of the general partners’ equity deficit. This agreement expired January 1, 2020 and was not extended. The partnership’s primary investment objectives are to: • yield a high rate of return from mortgage lending, after the payment of certain fees and expenses to the general partners and their related mortgage funds; • preserve and protect the partnership’s capital by making and/or investing in loans secured by California real estate, preferably income-producing properties geographically situated in the San Francisco Bay Area and the coastal metropolitan regions of Southern California; and, • generate and distribute cash flow from these mortgage lending and investing activities. Limited partners representing a majority of the outstanding units may, without the consent of the general partners, vote to: • dissolve the partnership; • amend the Partnership Agreement subject to certain limitations; • approve or disapprove the sale of all or substantially all of the assets of the partnership; and • remove or replace one or all of the general partners. A majority in interest of partnership units is required to elect a new general partner to continue the partnership business after a general partner ceases to be a general partner due to its withdrawal. Net income (losses) are allocated among the limited partners according to their respective capital accounts after one percent (1%) of the net income (losses) are allocated to the general partners. The monthly results are subject to subsequent adjustment as a result of quarterly and year-end accounting and reporting. Investors should not expect the partnership to provide tax benefits of the type commonly associated with limited partnership tax shelter investments. Federal and state income taxes are the obligation of the partners, other than the annual California franchise tax and the California LLC cash receipts taxes paid by the partnership’s subsidiaries. COVID-19 In March 2020, the World Health Organization declared the COVID-19 outbreak a pandemic. Since that time, the coronavirus has spread throughout the United States, including in the California regions and markets in which the partnership lends. In response, national, state, and local governments have taken, and are expected to continue to take, various actions, including the passage of laws and regulations, on a wide array of topics, in an attempt to slow the spread of COVID-19. On March 4, 2020, the Governor of California declared a State of Emergency related to the COVID-19 outbreak, followed by, among other administrative or executive orders for the purpose of ensuring that COVID-19 remains controlled and that the residents and visitors in California remain safe and secure. These restrictions have substantially limited the operation of non-essential businesses and the activities of individuals. The COVID-19 pandemic and these restrictions and operating protocols have had a significant adverse effect on the global, US, and California economies and have caused significant disruption to the financial and real estate markets. The restrictions and economic conditions caused by COVID-19 have also caused record unemployment nationwide as well as a significant number of layoffs and furloughs in the regions and communities in which the partnership lends. Despite the improvement in the economy in recent months, economic activity remains far below its pre-pandemic level and unemployment remains elevated. The ultimate effect of COVID-19 on the California real estate markets and broader economy is not known nor is the ultimate length of time California and other regions will be subject to the restrictions described and their accompanying effects. Some states and regions have begun to ease prior restrictions which may improve economic and market conditions; however, the easing of these restrictions has resulted in recent increases in COVID-19 cases and deaths, requiring reinstatement of prior restrictions and the prolonging of the COVID-19 crisis. On August 28, 2020 California issued a "Blueprint for a Safer Economy" which describes a tiered approach to relaxing and tightening restrictions on activities based on specified criteria and as permitted by the order based on county health conditions and circumstances. As of September 30, 2020, the partnership has not experienced a significant increase or decrease in the number of borrowers delaying payments compared to June 30, 2020 or December 31, 2019. The requests for delay in payments or payment relief may not be indicative of requests in any future period. A worsening of future cash flows from borrower missed or delayed payments could result in the partnership experiencing an increase in loans being designated non-accrual and an increase in payments in arrears and possibly foreclosures. However, as the partnership generally lends at loan to value ratios below 70%, increases in payments in arrears has not increased the credit risk on the loans, and therefore based on the partnership’s assessment of the value of real estate collateralizing its loans, there has not been an increase in the allowance for loan losses during the three and nine months ended September 30, 2020. The continued spread of COVID-19 or any other similar outbreaks in the future and the continued impact on social interaction, economies and financial markets may have significant adverse effects on (i) California real estate markets and thereby the partnership’s business, financial condition and result of operations due to the possibility of some borrowers having a reduced capacity and/or commitment to make principal and interest payments (ii) a decrease in the volume of loans funded and (iii) a decline in the values of the California real properties that serve as collateral for the loans. Declines in the value of real estate may lead to increases in the allowance for loan losses and increases in the valuation allowance for REO. Moreover, the Federal Reserve has taken action to lower the Federal Funds rate, which may lower the interest rate charged by banks and other competitors of the manager for real estate secured loans and which may reduce loan originations and increase loan payoffs. Such outcomes would negatively affect interest income and, therefore, earnings, financial condition and results of operations of the partnership. Potential other issues and risks resulting from the COVID-19 pandemic include: • Should key personnel of the manager become incapacitated by the COVID-19 virus, or be required (voluntarily or involuntarily) to terminate active involvement with the manager due to the effects of the virus, the business of the manager and related impact on the partnership could be adversely impacted. • The ability to enforce loan terms through foreclosure may be delayed and adversely effected by current or future limitations or moratoriums on foreclosures enacted by state or local authorities to address the impacts of COVID-19. • Loans secured by rental properties may be adversely impacted by restrictions or moratoriums on evictions enacted by federal, state or local authorities to address the impacts of COVID-19. • Partial or complete closures of county recording offices may affect the ability of the partnership to record deeds of trust and other documents and may affect the cost or ability of the partnership to obtain adequate title insurance for its loans. • The uncertainty of the effects of COVID-19 on borrowers, properties, and the economy generally may result in inaccuracy or delays in the recognition of loan losses or impairments by the partnership. • The partnership may incur additional costs to remedy damages caused by such disruptions and restrictions. Given the ongoing and dynamic nature of the circumstances, it is not possible to predict or estimate the ultimate impact of the coronavirus outbreak on the financial condition or results of operations and liquidity of the partnership for the remainder of 2020. While the partnership has not incurred material disruptions thus far, the rapid developments and fluidity of COVID-19 may cause the manager to adjust its lending parameters and investment strategy. The manager is continuing to monitor this situation and will adjust its response in concert with federal, state and local health officials and governmental authorities to protect the health and safety of its employees and to respond to changes in the real estate markets that it serves. On March 27, 2020, the “Coronavirus Aid, Relief, and Economic Security (CARES) Act” was signed into law. The manager continues to examine the impact that the CARES Act may have on the partnership’s business. Although the manager does not expect the CARES Act to have a direct impact on the partnership, it may have an indirect impact on the partnership’s borrowers and its manager. At the time of issuance of the partnership’s consolidated financial statements, the manager is unable to estimate the impact that the CARES Act will have on the partnership’s financial condition, results of operations, or liquidity for the remainder of 2020. Natural Disasters-Wildfires Wildfires have occurred in recent years in different regions of California, and related flooding and mudslides have also occurred, including in the counties where the partnership holds real estate collateral as security for its loans. The most destructive of the recent wildfires, which have burned thousands of acres and destroyed thousands of homes and structures, have originated in wildlands adjacent to urban areas. Although the recent natural disasters, including the Woodward, Glass, Complex and other fires did not directly affect the partnership, wildfires such as these could pose a threat to the real estate collateral that the partnership holds as security for its loans and adversely affect the demand for loans. Distribution to limited partners At the time of their subscription to the partnership, limited partners elected either to receive monthly, quarterly or annual cash distributions from the partnership, or to compound income in their capital account. If an investor initially elected to receive monthly, quarterly or annual distributions, such election, once made, is irrevocable. If the investor initially elected to compound income in their capital account, in lieu of cash distributions, the investor may, after three (3) years, change the election and receive monthly, quarterly or annual cash distributions. Income allocable to limited partners who elect to compound income in their capital account will be retained by the partnership for making further loans or for other proper partnership purposes and such amounts will be added to such limited partners’ capital accounts. The percentage of limited partners electing distribution of allocated net income, by weighted average to total partners’ capital was approximately 62% and 61% at September 30, 2020 and 2019, respectively. Capital withdrawals There are substantial restrictions on transferability of units, and there is no established public trading and/or secondary market for the units. To provide liquidity to limited partners, the Partnership Agreement provides that limited partners, after the minimum five-year period, may withdraw all or a portion of their capital accounts in 20 quarterly installments or longer, as determined by the general partners in light of partnership cash flow, beginning the last day of the calendar quarter following the quarter in which the notice of withdrawal is given. A limited partner may liquidate all or a part of the limited partner’s capital account in four quarterly installments beginning on the last day of the calendar quarter following the quarter in which the notice of withdrawal is given, subject to a 10% early withdrawal penalty applicable to any sums withdrawn prior to the time when such sums could have been withdrawn without penalty. There is a limited right of accelerated liquidation for an investor’s heirs upon an investor’s death. The partnership has not established a cash reserve from which to fund withdrawals and, accordingly, the partnership’s capacity to return a limited partner’s capital is subject to the availability of partnership cash. The general partner is under no obligation to sell loans from the portfolio in order to honor withdrawal requests, and the program can be restricted or suspended at any time. Cash flow is considered to be available only after all current partnership expenses have been paid (including compensation to the general partners and related mortgage funds) and adequate provision has been made for the payment of all periodic cash distributions on a pro rata basis which must be paid to limited partners who elected to receive such distributions upon subscription for units. Per the Partnership Agreement, no more than 20% of the total limited partners’ capital account balances at the beginning of any year may be liquidated during any calendar year. Notwithstanding this 20% limitation, the general partners have the discretion to further limit the percentage of total limited partners’ capital accounts that may be withdrawn in order to comply with the safe harbor provisions of the regulations under Section 7704 of the Internal Revenue Code of 1986, as amended, to avoid the partnership being taxed as a corporation. If notices of withdrawal in excess of these limitations are received by the general partners, the priority of distributions among limited partners is determined as follows: first to those limited partners withdrawing capital accounts according to the 20 quarter or longer installment liquidation period, then to benefit plan investors withdrawing capital accounts after five years over four quarterly installments, then to executors, heirs, and other administrators withdrawing capital accounts upon the death of a limited partner and finally to all other limited partners withdrawing capital accounts. Except as provided above, withdrawal requests will be considered by the general partners in the order received . Term of the partnership The partnership will continue until 2032, unless sooner terminated as provided in the Partnership Agreement. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 9 Months Ended |
Sep. 30, 2020 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Basis of presentation The financial statements are prepared in conformity with accounting principles generally accepted in the United States of America (GAAP). The partnership’s consolidated financial statements include the accounts of the partnership, its wholly-owned subsidiaries (consisting of single-member limited liability companies owning a single real property asset). All significant intercompany transactions and balances have been eliminated in consolidation. Reclassifications Certain reclassifications, not affecting reported net income or total partners’ capital, have been made to the previously issued consolidated financial statements to conform to the current period presentation. Management estimates The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions about the reported amounts of assets and liabilities, and disclosures of contingent assets and liabilities, at the dates of the financial statements and the reported amounts of revenues and expenses during the reported periods. Such estimates relate principally to the determination of the allowance for loan losses, including, when applicable, the valuation of impaired loans (which itself requires determining the fair value of the collateral), and the valuation of real estate owned, at acquisition and subsequently. Actual results could differ materially from these estimates. Fair value estimates GAAP defines fair value as the price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. An orderly transaction is a transaction that assumes exposure to the market for a period prior to the measurement date to allow for marketing activities that are usual and customary for transactions involving such assets and liabilities; it is not a forced transaction. Market participants are buyers and sellers in the principal market that are (i) independent, (ii) knowledgeable, (iii) able to transact and (iv) willing to transact. Fair values of assets and liabilities are determined based on the fair value hierarchy established in GAAP. The hierarchy is comprised of three levels of inputs to be used. • Level 1 inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities that the partnership has the ability to access at the measurement date. An active market is a market in which transactions occur with sufficient frequency and volume to provide pricing information on an ongoing basis. • Level 2 inputs are inputs other than quoted prices that are observable for the asset or liability, either directly or indirectly in active markets and quoted prices for identical assets or liabilities that are not active, and inputs other than quoted prices that are observable or inputs derived from or corroborated by market data. • Level 3 inputs are unobservable inputs for the asset or liability. Unobservable inputs reflect the partnership’s own assumptions about the assumptions market participants would use in pricing the asset or liability (including assumptions about risk). Unobservable inputs are developed based on the best information available in the circumstances and may include the partnership’s own data. The fair value of real property is determined by exercise of judgment based on management’s experience informed by appraisals (by licensed appraisers), brokers’ opinion of values, and publicly available information on in-market transactions. Appraisals of commercial real property generally present three approaches to estimating value: 1) market-comparables or sales approach; 2) cost to replace; and 3) capitalized cash flows or income approach. These approaches may or may not result in a common, single value. The market-comparables approach may yield several different values depending on certain basic assumptions, such as, determining highest and best use (which may or may not be the current use); determining the condition (e.g., as-is, when-completed, or for land when-entitled); and determining the unit of value (e.g., as a series of individual unit sales or as a bulk disposition). Management has the requisite familiarity with the markets it lends in generally and of the properties lent on specifically to analyze sales-comparables and assess their suitability/applicability. Management is acquainted with market participants – investors, developers, brokers, lenders – that are useful, relevant secondary sources of data and information regarding valuation and valuation variability. These secondary sources may have familiarity with and perspectives on pending transactions, successful strategies to optimize value, and the history and details of specific properties – on and off the market – that enhance the process and analysis that is particularly and principally germane to establishing value in distressed markets and/or property types. Cash in banks At September 30, 2020, substantially all of the partnership’s cash balances in banks exceed the federal depository insurance limit of $250,000. The bank or banks in which funds are deposited are reviewed periodically for their general credit worthiness/investment grade credit rating. See Note 7 (Line of Credit) for compensating balance arrangements. Loans and interest income Performing loans are carried at amortized cost, which is generally equal to the unpaid principal balance (principal). Management has discretion to pay amounts (advances) to third parties on behalf of borrowers to protect the partnership’s interest in the loan. Advances include, but are not limited to, the payment of interest and principal on a senior lien to prevent foreclosure by the senior lien holder, property taxes, insurance premiums, and attorney fees. Advances generally are stated at the amounts paid out on the borrower’s behalf and any accrued interest on amounts paid out, until repaid by the borrower. For performing loans, interest is accrued daily on the principal plus advances, if any. Non-performing loans (i.e., loans with a payment in arears) less than 180 days delinquent continue to recognize interest income as long as the loan is in the process of collection and is considered to be well-secured. Non-performing loans are placed on non-accrual status if 180 days delinquent (or 90 days past maturity without making monthly interest payments) or earlier if management determines that the primary source of repayment will come from the foreclosure and subsequent sale of the collateral securing the loan (which usually occurs when a notice of sale is filed) or when the loan is no longer considered well-secured. When a loan is placed on non-accrual status, the accrual of interest is discontinued for accounting purposes only; however, previously recorded interest is not reversed. A loan may return to accrual status when all delinquent interest and principal payments become current in accordance with the terms of the loan agreement. Late fees are recognized in the period received. The partnership may fund a specific loan net of an interest reserve (one to two years) to insure timely interest payments at the inception of the loan. Any interest reserve is amortized over the period that the amount is prepaid. In the event of an early loan payoff, any unapplied interest reserves would be first applied to any accrued but unpaid interest and then as a reduction of principal. In the normal course of the partnership’s operating activities, performing loans that are maturing or have matured may be renewed at then current market rates of interest and terms for new loans. Such renewals are not designated as impaired. From time to time, the manager negotiates and enters into loan modifications with borrowers whose loans are delinquent (i.e., non-performing). If a loan modification were to result in an economic concession to the borrower (i.e., a significant delay or reduction in cash flows compared to the original note), the modification is deemed a troubled debt restructuring (TDR). In March 2020, various federal regulatory agencies issued an interagency statement on loan modifications and reporting for financial institutions working with borrowers affected by the Coronavirus. The interagency statement was effective immediately and impacted accounting for loan modifications. The agencies confirmed with the staff of the Financial Accounting Standards Board (FASB) that short-term modifications made on a good faith basis in response to COVID- 19 to borrowers who were current prior to any relief, are not to be considered TDRs. This includes short-term (e.g., six months) modifications such as payment deferrals, fee waivers, extensions of repayment terms, or other delays in payment that are insignificant. The partnership funds loans with the intent to hold the loans until maturity. From time to time the partnership may sell certain loans when the manager determines it to be in the best interest of the partnership. Loans are classified as held-for-sale once a decision has been made to sell loans and the loans held-for-sale have been identified. Loans classified as held for sale are carried at the lower of cost or fair value. No loss has been recorded upon reclassification to held for sale as the fair value is in excess of the cost. The loans held for sale at September 30, 2020 are expected to be sold in November 2020. Allowance for loan losses Loans and the related accrued interest and advances (i.e., the loan balance) are analyzed on a periodic basis for ultimate recoverability. Collateral fair values are reviewed quarterly and the protective equity for each loan is computed. As used herein, “protective equity” is the dollar amount by which the net realizable value (i.e., fair value less the cost to sell) of the collateral, net of any senior liens, exceeds the loan balance, where “loan balance” is the sum of the unpaid principal, advances and the recorded interest thereon. If based upon current information and events, it is probable the partnership will be unable to collect all amounts due according to the contractual terms of the loan agreement, then a loan may be designated as impaired. Impaired loans are included in management’s periodic analysis of recoverability. Payments on impaired loans are applied to late fees, then to the accrued interest, then to advances, and lastly to principal. For loans that are deemed to be collateral dependent, a provision for loan losses is recorded to adjust the allowance for loan losses (principal and/or recorded interest) in an amount such that the net carrying amount (unpaid principal less the specific allowance) is reduced to the lower of the loan balance or the estimated fair value of the related collateral, net of any costs to sell in arriving at net realizable value and net of any senior loans. The partnership charges off uncollectible loans and related receivables directly to the allowance account once it is determined the full amount is not collectible. Any amounts collected after a charge off is deemed a recovery of loan losses. At foreclosure, any excess of the recorded investment in the loan (accounting basis) over the net realizable value of the collateral is charged against the allowance for loan losses. Real estate owned (REO) Real estate owned (REO) is property acquired in full or partial settlement of loan obligations generally through foreclosure and is recorded at acquisition at the property’s net realizable value, which is the fair value less estimated costs to sell, as applicable. The fair value estimates are derived from information available in the real estate markets including similar property, and often require the experience and judgment of third parties such as commercial real estate appraisers and brokers. The estimates figure materially in calculating the value of the property at acquisition, the level of charge to the allowance for loan losses and any subsequent valuation reserves. After acquisition, costs incurred relating to the development and improvement of property are capitalized to the extent they do not cause the recorded value to exceed the net realizable value, whereas costs relating to holding and disposition of the property are expensed as incurred. After acquisition, REO is analyzed periodically for changes in fair values and any subsequent write down is charged to operations expense. Any recovery in the fair value subsequent to such a write down is recorded, not to exceed the value recorded at acquisition. Recognition of gains on the sale of real estate is dependent upon the transaction meeting certain criteria related to the nature of the property and the terms of the sale including potential seller financing. Debt issuance costs Debt issuance costs are the fees and commissions incurred in the course of obtaining a line of credit for services from banks, law firms and other professionals and are amortized on a straight-line basis as interest expense over the term of the line of credit. Recently issued accounting pronouncements - Accounting and Financial Reporting for Expected Credit Losses The FASB issued an Accounting Standards Update (ASU) that significantly changes how entities will account for credit losses for most financial assets that are not measured at fair value through net income. The new standard will supersede currently in effect guidance and applies to all entities. Entities will be required to use a current expected credit loss (CECL) model to estimate credit impairment. This estimate will be forward-looking, meaning management will be required to use not only historical trends and current conditions, but must also consider forecasts about future economic conditions to determine the expected credit loss over the remaining life of an instrument. This will be a significant change from the current incurred credit loss model and generally may result in allowances being recognized in earlier periods than under the current credit loss model. The ASU is effective for smaller reporting companies for interim and annual reporting periods in 2023. RMI VIII invests in real estate secured loans made with the expectation that the possibility of credit losses is remote as a result of substantial protective equity provided by the underlying collateral. The real estate secured programs and low loan-to-value ratios have caused RMC to expect that the adoption of the CECL model from the incurred loss models presently in use as to credit loss recognition will likely not materially impact the reported results of operations or financial position of the partnership. However, the impact, if any, upon adoption will be dependent upon the facts and circumstances relating to our loans at that date. - Reference Rate Reform In March 2020, the FASB issued ASU 2020-04, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting, provides temporary optional expedients for various agreements and contracts that utilize the London Interbank Offered Rate (LIBOR) as the benchmark reference rate. The relief generally applies to eligible modifications of contractual terms that change (or have the potential to change) the amount or timing of contractual cash flows related to replacement of a reference rate. The relief allows such modifications to be accounted for as continuations of existing contracts without additional analysis. As the guidance in ASU 2020-04 is intended to assist entities during the global market-wide reference rate transition period, it is in effect from March 12, 2020 through December 31, 2022. RMC is currently evaluating the impact of the potential discontinuance of LIBOR in relation to the partnership’s line of credit and has not yet adopted the optional relief. |
General Partners and Other Rela
General Partners and Other Related Parties | 9 Months Ended |
Sep. 30, 2020 | |
Related Party Transactions [Abstract] | |
General Partners and Other Related Parties | NOTE 3 – GENERAL PARTNERS AND OTHER RELATED PARTIES The general partners are entitled to monthly fees for managing the partnership’s loan portfolio. The Partnership Agreement provides for fees as compensation to the manager and for reimbursement of qualifying expenses, as detailed below. Mortgage servicing fees The manager acting as servicing agent with respect to all loans is entitled to receive a servicing fees of up to 1.5% annually of the unpaid principal balance of the loan portfolio. The mortgage servicing fees are accrued monthly on all loans. Remittance to RMC is made monthly unless the loan has been assigned a specific loss reserve, at which point remittance is deferred until the specific loss reserve is no longer required, or the property has been acquired by the partnership. Asset The general partners are entitled to monthly fees for managing the partnership’s loan portfolio and operations of up to 1/32 of 1% of the “net asset value” (3/8 of 1% annually). Costs from Redwood Mortgage Corp . The manager is entitled to request reimbursement by the partnership for operations expense incurred on behalf of the partnership, including without limitation, accounting, tax and data processing, postage and out-of-pocket general and administration expenses. Certain of these qualifying costs (e.g., postage) can be tracked by RMC as specifically attributable to the partnership. Other costs (e.g., RMC’s accounting and audit fees, legal fees and expenses, qualifying payroll expenses, occupancy, and insurance premium) are allocated on a pro-rata basis (e.g., by the partnership’s percentage of total capital of all mortgage funds managed by RMC). Payroll and consulting fees are allocated first based on activity, and then to the partnership on a pro-rata basis based on percentage of capital to the total capital of all related mortgage funds managed by RMC. The decision to request reimbursement of any qualifying operating expenses is made by RMC at its sole discretion. Commissions and fees are paid by the borrowers to RMC - Brokerage commissions, loan originations - For fees in connection with the review, selection, evaluation and negotiation of loans (including extensions), the general partners may collect loan brokerage commissions (points) limited to an amount not to exceed 4% of the total partnership assets per year. The loan brokerage commissions paid by the borrowers to RMC are not recorded by the partnership and approximated $218,000 and $695,000 for the three months ended September 30, 2020 and 2019, respectively and $295,000 and $1,138,000 for the nine months ended September 30, 2020 and 2019, respectively. - Other fees – In the ordinary course of business, performing loans may be transferred by executed assignment, in-part or in-full, between the related mortgage funds at par. During the nine months ended September 30, 2020, the partnership transferred one performing loan in-full to Redwood Mortgage Investors IX, LLC, a related mortgage fund, at par value, which approximates fair value, of approximately $2,297,000. The partnership received cash for the transfer and has no continuing obligation or involvement with the assigned loan. No loans were transferred during the nine months ended September 30, 2019. Formation loan/Commissions paid to broker-dealers Commissions for sales of limited partnership units paid to broker-dealers (B/D sales commissions) were paid by RMC and were not paid directly by the partnership out of offering proceeds. Instead, the partnership advanced to RMC amounts sufficient to pay the B/D sales commissions and premiums paid to partners in connection with unsolicited orders up to 7% of offering proceeds. The receivable arising from the advances is unsecured, and non-interest bearing and is referred to as the “formation loan.” Since its inception, the partnership had made such advances of approximately $22,567,000, of which approximately $4,124,000 remain outstanding on the formation loan as of September 30, 2020. RMC will repay the formation loans principally from loan brokerage commissions earned on loans, early withdrawal penalties on partner withdrawals and other fees paid by the partnership. Since RMC will use the proceeds from loan brokerage commissions on loans to repay the formation loans and, if both or either one of the initial general partners is removed as a general partner by the vote thereafter designated, and if such successor or additional general partner(s) begins using any other loan brokerage firm for the placement of loans, RMC will be immediately released from any further obligation under the formation loans (except for a proportionate share of the principal installment due at the end of that year). In addition, if both of the general partners are removed, no successor general partners are elected, the partnership is liquidated and RMC is no longer receiving any payments for services rendered, the debt on the formation loans shall be forgiven and RMC will be immediately released from any further obligations under the formation loans. The formation loan activity for the nine months ended September 30, 2020 is summarized in the following table ($ in thousands). 2020 Balance, January 1 $ 4,292 Early withdrawal penalties (168 ) Repayments — Balance, September 30 $ 4,124 RMC is repaying the formation loan in forecasted annual installments of principal, without interest, of $650,000, less early withdrawal penalties, and a final payment of $392,000 in 2026. Limited partner capital - withdrawals Withdrawals of limited partners’ capital for the three and nine months ended September 30, 2020 and 2019 are presented in the following table ($ in thousands). Three Months Ended Nine Months Ended Withdrawals 2020 2019 2020 2019 Without penalty $ 3,767 $ 4,863 $ 11,813 $ 15,624 With penalty 403 960 1,681 3,236 Total $ 4,170 $ 5,823 $ 13,494 $ 18,860 Scheduled, at September 30 $ 33,865 $ 43,769 $ 33,865 $ 43,769 Scheduled withdrawals of limited partners’ capital as of September 30, 2020 are presented in the following table ($ in thousands). 2020 $ 3,875 2021 12,379 2022 8,584 2023 5,659 2024 2,773 Thereafter 595 Total $ 33,865 Scheduled withdrawals of limited partners’ capital of approximately $404,000, are subject to early withdrawal penalties as the limited partners elected the accelerated payout option as permitted in the Partnership Agreement. Promissory note to related party (RMI IX) On September 30, 2020, RMI VIII borrowed from Redwood Mortgage Investors IX (RMI IX) $850,000 secured by the net cash flow payable on two mortgage loans totaling approximately $2,331,000 each of which were designated by RMI VIII as held for sale and expected to be sold to a third party purchaser prior to November 30, 2020. Interest on the loan accrued at a rate equal to RMI IX’s pro rata share of the weighted average interest payable on the held for sale loans through a term ending on the earlier of: (i) the closing of the purchase of the held for sale loans; and (ii) November 30, 2020. The promissory note payable to RMI IX was secured by all proceeds payable to RMI VIII upon the sale or repayments of the loans net of any amounts outstanding by RMI VIII on its line of credit secured by the loans. On October 14, 2020, RMI VIII repaid in full the promissory note amount of $850,000 and interest of $2,700. Under the terms of the note, RMI IX is also entitled to a pro rata share of premium realized (i.e., gain on sale net of costs) upon the sale of the held for sale loans if the sale transaction closes following repayment of the promissory note payable to RMI IX. Payable to related parties From time to time, in the normal course of business operations, the partnership may have payables to related parties. At September 30, 2020, the payable to related parties balance consisted of accounts payable and cost reimbursements to the manager of approximately $77,190. All amounts due were fully paid in November 2020. |
Loans
Loans | 9 Months Ended |
Sep. 30, 2020 | |
Receivables [Abstract] | |
Loans | NOTE 4 – LOANS As of September 30, 2020, 28 (76%) of the partnership’s 37 loans (representing 91% of the aggregate principal of the partnership’s loan portfolio) have a term of five years or less. The remaining loans have terms longer than five years. Substantially all loans are written without a prepayment penalty clause. As of September 30, 2020, 16 (43%) of the loans outstanding (representing 74% of the aggregate principal balance of the partnership’s loan portfolio) provide for monthly payments of interest only, with the principal due in full at maturity. The remaining loans require monthly payments of principal and interest, typically calculated on a 30-year amortization, with the remaining principal due at maturity. Secured loans unpaid principal balance (principal) Secured loan transactions for the three and nine months ended September 30, 2020 are summarized in the following table ($ in thousands). Three months ended Nine months ended Principal, beginning of period $ 77,895 $ 86,203 Loans funded 2,275 3,775 Loan transferred to related mortgage fund — (2,297 ) Collected - secured (2,869 ) (7,441 ) Loans transferred to held for sale (2) (2,331 ) (2,331 ) Foreclosures (1) — (2,939 ) Principal, September 30, 2020 $ 74,970 $ 74,970 1) The partnership foreclosed on one loan, with a recorded investment of approximately $3,163,000. The net investment in the loan was adjusted to the estimated fair value of the related collateral, net of any costs to sell in arriving at net realizable value and net of any senior loans, which resulted in the recognition of foregone interest of approximately $140,000 during the nine months ended September 30, 2020. 2) At September 30, 2020, two loans with a combined principal of approximately $2,331,000 were designated ‘held for sale’ for financial reporting purposes and are separately classified as such on the balance sheet and accompanying notes to the financial statements. All loans held for sale were performing and in first lien position. At September 30, 2020, the two loans held for sale had a combined accrued interest balance of approximately $15,870 all of which was received by the partnership in October 2020. During the three and nine months ended September 30, 2020, the partnership renewed 6 and 12 maturing (or matured) loans with aggregate principal of approximately $16,409,000 and $31,486,000, respectively, which are not included in the activity shown in the above table. The loans were current and deemed well collateralized at the time they were extended. See Note 3 (General Partners and Other Related Parties) for a description of loan transfers by executed assignments to a related mortgage fund. Pursuant to California regulatory requirements borrower payments are deposited into a trust account established by RMC with an independent bank. Funds are disbursed to the partnership as collected which can range from same day for wire transfers and up to two weeks after deposit for checks. Borrower payments held in the trust account that are yet to be disbursed to the partnership are not included in the consolidated financial statements. At September 30, 2020, $106,346 of borrower payments made by check, was on deposit in the trust account, all of which was disbursed to the partnership’s account by October 14, 2020 when it was recorded by the partnership. At December 31, 2019, $21,592 of borrower payments made by check, was on deposit in the trust account. Loan characteristics Secured loans had the characteristics presented in the following table ($ in thousands). September 30, December 31, 2020 2019 Number of secured loans 37 47 Secured loans – principal $ 74,970 $ 86,203 Secured loans – lowest interest rate (fixed) 5.0 % 5.0 % Secured loans – highest interest rate (fixed) 10.8 % 10.8 % Average secured loan – principal $ 2,026 $ 1,834 Average principal as percent of total principal 2.7 % 2.1 % Average principal as percent of partners’ capital, net of formation loan 2.5 % 2.0 % Average principal as percent of total assets 2.3 % 1.9 % Largest secured loan – principal $ 10,200 $ 10,200 Largest principal as percent of total principal 13.6 % 11.8 % Largest principal as percent of partners’ capital, net of formation loan 12.5 % 10.9 % Largest principal as percent of total assets 11.6 % 10.8 % Smallest secured loan – principal $ 47 $ 51 Smallest principal as percent of total principal 0.1 % 0.1 % Smallest principal as percent of partners’ capital, net of formation loan 0.1 % 0.1 % Smallest principal as percent of total assets 0.1 % 0.1 % Number of California counties where security is located 15 15 Largest percentage of principal in one California county 41.7 % 38.2 % Number of secured loans with a filed notice of default — 1 Secured loans in foreclosure – principal $ — $ 2,939 Number of secured loans with prepaid interest — 2 Prepaid interest $ — $ 121 As of September 30, 2020, the partnership’s largest loan, with principal of approximately $10,200,000, has an interest rate of 9.50%, is secured by an industrial building in San Francisco County, and has a maturity date of December 1, 2020. As of September 30, 2020, the partnership had no outstanding construction or rehabilitation loans and had no commitments to fund construction, rehabilitation or other loans. Lien position At funding, secured loans had the lien positions presented in the following table ($ in thousands). September 30, 2020 December 31, 2019 Loans Principal Percent Loans Principal Percent First trust deeds 27 $ 68,029 91 % 31 $ 72,621 84 % Second trust deeds 10 6,941 9 16 13,582 16 Total principal, secured loans 37 $ 74,970 100 % 47 $ 86,203 100 % Liens due other lenders at loan closing 16,136 29,817 Total debt $ 91,106 $ 116,020 Appraised property value at loan closing $ 185,725 $ 226,185 Percent of total debt to appraised values (LTV) at loan closing (3) 54.0 % 55.1 % 3) Based on appraised values and liens due other lenders at loan closing. The weighted-average loan-to-value (LTV) computation above does not take into account subsequent increases or decreases in property values following the loan closing, nor does it include decreases or increases on senior liens to other lenders. Property type Secured loans summarized by property type are presented in the following table ($ in thousands). September 30, 2020 December 31, 2019 Loans Principal Percent Loans Principal Percent Single family (4) 21 $ 17,742 24 % 32 $ 30,629 36 % Multi-family 2 7,068 9 2 7,072 7 Commercial 12 48,275 64 12 48,117 56 Land 2 1,885 3 1 385 1 Total principal, secured loans 37 $ 74,970 100 % 47 $ 86,203 100 % 4) Single family properties include owner-occupied and non-owner occupied 1-4 unit residential buildings, condominium units, townhouses, and condominium complexes. The single family property type as of September 30, 2020 consists of 9 loans with principal of approximately $4,527,000 that are owner occupied and 12 loans with principal of approximately $13,215,000 that are non-owner occupied. Single family property type at December 31, 2019 consisted of 12 loans with principal of approximately $7,642,000 that are owner occupied and 20 loans with principal of approximately $22,987,000 that are non-owner occupied. Distribution by California counties The distribution of secured loans within California by counties is presented in the following table ($ in thousands). September 30, 2020 December 31, 2019 Principal Percent Principal Percent San Francisco Bay Area (5) San Francisco $ 31,244 41.7 % $ 32,908 38.2 % San Mateo 17,148 22.9 17,221 20.0 Santa Clara 1,600 2.1 6,281 7.3 Alameda 2,874 3.8 3,349 3.9 Napa — — 548 0.6 Contra Costa 303 0.4 308 0.3 Marin 179 0.2 513 0.6 53,348 71.1 61,128 70.9 Other Northern California Placer 1,500 2.0 — — Santa Cruz 511 0.7 1,376 1.6 Stanislaus 555 0.7 — — Amador 706 0.9 719 0.8 Mariposa 47 0.1 51 0.1 Monterey — — 193 0.2 3,319 4.4 2,339 2.7 Total Northern California 56,667 75.5 63,467 73.6 Los Angeles & Coastal Los Angeles 10,205 13.6 14,623 17.0 Santa Barbara 2,074 2.8 2,085 2.4 Orange 644 0.9 648 0.8 12,923 17.3 17,356 20.2 Other Southern California San Bernardino 5,380 7.2 5,380 6.2 5,380 7.2 5,380 6.2 Total Southern California 18,303 24.5 22,736 26.4 Total principal, secured loans $ 74,970 100.0 % $ 86,203 100.0 % 5) Includes the Silicon Valley Scheduled maturities Secured loans scheduled to mature as of September 30, 2020 are presented in the following table ($ in thousands). Scheduled maturities, as of September 30, 2020 Loans Principal Percent 2020 (6) 4 $ 21,273 28 % 2021 (7) 20 34,643 46 2022 6 5,461 7 2023 2 3,802 5 2024 2 1,106 2 Total scheduled maturities 34 66,285 88 Matured as of September 30, 2020 3 8,685 12 Total principal, secured loans 37 $ 74,970 100 % 6) Loans scheduled to mature in 2020 after September 30. Includes one loan with principal of approximately $5,380,000 which matured July 1, 2020. The partnership entered into a forbearance agreement with the borrower in September 2020 which deferred the maturity date until December 1, 2020. 7) Includes one loan with principal of approximately $5,355,000 which matured October 1, 2019. The partnership entered into a forbearance agreement with the borrower in June 2020 which deferred the maturity date until January 1, 2021. Scheduled maturities are presented based on the most recent in-effect agreement with the borrower, including forbearance agreements. As a result, matured loans for the scheduled maturities table may differ from the same captions in the tables of delinquencies and payments in arrears disclosed below that are based on the notes and do not consider forbearance agreements. It is the partnership’s experience that the timing of future cash receipts from secured loans will differ from scheduled maturities. Loans may be repaid or renewed before, at or after the contractual maturity date. For matured loans, the partnership may continue to accept payments while pursuing collection of principal or while negotiating an extension of the loan’s maturity date. Delinquency/Non-performing loans Secured loans summarized by payment-delinquency status are presented in the following table ($ in thousands). September 30, 2020 December 31, 2019 Loans Principal Loans Principal Current 31 $ 47,554 43 $ 73,893 Past Due 30-89 days 1 7,996 — — 90-179 days 1 3,896 1 5,355 180 or more days 4 15,524 3 6,955 Total past due 6 27,416 4 12,310 Total principal, secured loans 37 $ 74,970 47 $ 86,203 During the nine months ended September 30, 2020 the partnership entered into two forbearance agreements. The first, in June 2020 for a loan with principal balance of $5,355,000, which is collateralized by a commercial building in San Mateo County. The loan matured on October 1, 2019 and was designated impaired and in non-accrual status at June 30, 2020. The partnership entered into a forbearance agreement with the borrower in June 2020 whereby the borrower agreed to resume monthly payments of interest and the partnership agreed to forgo collection of default interest and defer the maturity date until January 1, 2021. The second, in September 2020, for a loan with a principal balance of $5,380,000, which is collateralized by a commercial property in San Bernardino County. The loan matured on July 1, 2020 and was designated impaired at May 30, 2020, and in non-accrual status at September 1, 2020. The partnership entered into a forbearance agreement with the borrower to defer the maturity date until December 1, 2020. No loan payment modifications (or TDRs) were entered into during the nine months ended September 30, 2020 and none were in effect at December 31, 2019. Payments in arrears for non-performing secured loans (i.e., loans past maturity and monthly payments of principal and interest past due 30 or more days) as of September 30, 2020 and December 31, 2019 are presented in the following tables ($ in thousands). Loans Principal Interest (8) At September 30, 2020 Past maturity Monthly payments Past maturity Monthly payments Past maturity Monthly payments Total payments in arrears Payments in arrears 30-89 days (1-3 payments) — 1 $ — $ — $ — $ 39 $ 39 90-179 days (4-6 payments) 1 — 3,896 — — — 3,896 180 or more days (more than 6 payments) (9) 4 — 15,524 — 726 — 16,250 Total past due (10) 5 1 $ 19,420 $ — $ 726 $ 39 $ 20,185 8) Interest includes foregone interest of $311,946 on non-accrual loans past maturity. September 2020 interest is due on October 1, 2020 and is not included in the payments in arrears at September 30, 2020. 9) Two loans, with an aggregate principal balance of approximately $10,735,000, included in past maturity payments (principal and interest) 180 or more days, had forbearance agreements in place at September 30, 2020. See the disclosure above for a discussion of the terms of the forbearance agreements. 10) Included in the table above is one loan past maturity with principal of approximately $3,896,000 and an original maturity date of July 1, 2020. The borrower continued to make monthly payments past the original maturity date, and in October 2020, the maturity date was extended by two years to July 1, 2022. Loans Principal Interest ( 1 1 ) At December 31, 2019 Past maturity Monthly payments Past maturity Monthly payments Past maturity Monthly payments Total payments in arrears Payments in arrears 30-89 days (1-2 payments) — — $ — $ — $ — $ — $ — 90-179 days (3-5 payments) 1 — 5,355 — 76 — 5,431 180 or more days (6 or more payments) 3 — 6,955 — 394 — 7,349 Total payments in arrears 4 — $ 12,310 $ — $ 470 $ — $ 12,780 11) Interest includes foregone interest of approximately $243,000 on non-accrual loans past maturity. December 2019 interest was due on January 1, 2020 and is not included in the payments in arrears at December 31, 2019. Delinquency/Loans in non-accrual status Secured loans in non-accrual status are summarized in the following table ($ in thousands). September 30, December 31, 2020 2019 Number of loans 4 3 Principal $ 15,524 $ 6,955 Advances 23 25 Accrued interest 451 184 Total recorded investment $ 15,998 $ 7,164 Foregone interest $ 384 $ 298 Non-performing loans are placed on non-accrual status if 180 days delinquent (or 90 days past maturity without making monthly interest payments) or earlier if management determines that the primary source of repayment will come from the foreclosure and subsequent sale of the collateral securing the loan (which usually occurs when a notice of sale is filed) or when the loan is no longer considered well-secured. When a loan is placed on non-accrual status, the accrual of interest is discontinued for accounting purposes only (i.e., foregone interest in the table above); however, previously recorded interest is not reversed. At September 30, 2020, four loans with aggregate principal of approximately $15,524,000 were past maturity 180 or more days and were in non-accrual status. At September 30, 2020, one loan, with aggregate principal of approximately $3,896,000 and accrued interest of approximately $30,034 was contractually 90 or more days past due as to principal or interest and not in non-accrual status. At December 31, 2019, three loans with aggregate principal of approximately $6,955,000 were past maturity 180 or more days and were in non-accrual status. At December 31, 2019, one loan with a principal of approximately $5,355,000 and accrued interest of approximately $114,000 was 90 days past maturity and was not in non-accrual status. The loan was designated as in non-accrual status as of January 2020. Provision/allowance for loan losses and impaired loans Generally, the partnership has not recorded an allowance for loan losses as all loans have protective equity such that collection is deemed probable for all recorded amounts due on the loan. From time to time, the manager may deem it in the best interest of the partnership to agree to concessions to borrowers to facilitate a sale of collateral or refinance transactions primarily for secured loans in second lien position. Accordingly, at December 31, 2019, RMI VIII had a recorded allowance for loan losses of $50,000. There was no provision for loan losses for the three or nine months ended September 30, 2020. In June 2020, the partnership recorded a recovery of loan losses of $126,000 from a court order dated June 2020 pursuant to the terms of a judgment dated October 2012 against a borrower/guarantor. The amounts recovered were previously charged off. The funds were received in July 2020. Loans designated impaired and any associated allowance for loan losses is presented in the following table ($ in thousands). September 30, December 31, 2020 2019 Principal $ 15,524 $ 12,310 Recorded investment (12) 15,998 12,931 Impaired loans without allowance 15,998 12,931 Impaired loans with allowance — — Allowance for loan losses, impaired loans — — Number of Loans 4 4 Weighted average LTV, at origination 52.5 % 68.0 % 12) Recorded investment is the sum of principal, advances, and accrued interest for financial reporting purposes. Loans designated impaired had an average recorded investment balance, interest income recognized, and interest income received in cash for the nine months ended September 30, 2020 and the year ended December 31, 2019 as presented in the following table ($ in thousands). September 30, December 31, 2020 2019 Average recorded investment $ 12,078 $ 8,160 Interest income recognized 631 298 Interest income received in cash 368 284 |
Real Estate Owned (REO)
Real Estate Owned (REO) | 9 Months Ended |
Sep. 30, 2020 | |
Real Estate [Abstract] | |
Real Estate Owned (REO) | NOTE 5 – REAL ESTATE OWNED (REO) REO transactions and valuation adjustments for the three and nine months ended September 30, 2020 are summarized in the following table ($ in thousands). Three months ended Nine months ended REO Valuation Allowance REO, net REO Valuation Allowance REO, net Balance, beginning of period $ 12,161 $ (3,239 ) $ 8,922 $ 6,491 $ (3,239 ) $ 3,252 Acquisitions from foreclosure — — — 5,787 — 5,787 Dispositions — — — (117 ) — (117 ) Balance, September 30, 2020 $ 12,161 $ (3,239 ) $ 8,922 $ 12,161 $ (3,239 ) $ 8,922 The following transactions closed during the nine months ended September 30, 2020. • In June, acquired – in Los Angeles County (Hollywood Hills) – by two foreclosure sales, two single-family residences on separate adjoining parcels with a shared driveway. The larger parcel and residence are 0.31 acres and approximately 5,200 square feet, respectively. The other parcel and residence are 0.12 acres and approximately 3,100 square feet, respectively. The aggregate estimated net realizable value of the two properties based on recent appraisals was $5,787,000 (see below for mortgages payable and other liabilities assumed at foreclosure). • In March, s old – in San Francisco County – a unit in a condominium complex for approximately $186,000, with a gain of approximately $68,000. There were no REO transactions or valuation allowance adjustments during the nine months ended September 30, 2019 REO at September 30, 2020 was comprised of five properties with a carrying value, net of approximately $8,922,000. REO is recorded at fair value at acquisition, and subsequently adjusted to the lower of the recorded cost or fair value based on appraisals and analysis by RMC: • In Los Angeles County (Hollywood Hills) two single-family residences on separate adjoining parcels with a shared driveway, being marketed by a broker. • In San Francisco County, 2 residential units in a condominium complex, which are being marketed as affordable-units to qualifying buyers pursuant to listings approved by the City of San Francisco. • In Fresno County, a partially completed home subdivision, being marketed by a broker. • In Stanislaus County, approximately 14 acres of undeveloped land zoned commercial, being marketed by a broker. • In San Francisco County, a real estate interest comprised of a condominium unit/storage lockers and signage rights on the exterior façade of the building. In June 2020, in conjunction with the REO acquisitions by foreclosure sales (Hollywood Hills), the partnership assumed two first mortgages, with aggregate principal outstanding of approximately $2,449,000, and mortgage interest, property taxes, and other liabilities totaling approximately $175,000. The interest rates on the mortgages payable assumed at foreclosure are deemed to be at market rates for the type and location of the securing property, the remaining term of the mortgage note, and the other terms and conditions are deemed to be customary. The mortgages assumed at the foreclosure sales were 201 and 242 days delinquent, with accrued interest in arrears of approximately $33,000 and $40,000, and delinquent property taxes of $23,000 and $47,000 (advanced by the first mortgage lender), respectively. Interest in arrears and delinquent property taxes at acquisition are included in accounts payable on the balance sheet. Mortgages payable at September 30, 2020 are summarized in the following table ($ in thousands). Lender - summary of terms 2020 Wells Fargo Bank - secured by a first trust deed on a single family residence located in Los Angeles County, matures November 1, 2044, monthly payment $7,754.40, and interest at 4.125% until October 31, 2024; thereafter interest at LIBOR plus 2.25%, Wells Fargo submitted a payoff statement in July 2020. $ 1,453 East West Bank - secured by a first trust deed on a single family residence located in Los Angeles County, matures January 14, 2035, with interest at Prime plus 1% or 4.25% at June 30, 2020. Subsequent to foreclosure, East West Bank submitted a demand to be paid in full in July 2020. 996 Total mortgages payable $ 2,449 Since acquisition, accrued interest of approximately $34,000 , and property taxes of $17,000 have been recorded in accrued liabilities on the balance sheet. The borrower has contested the foreclosure sale, and at September 30, 2020 had not vacated the residences. REO, net REO, net in operations expense on the consolidated income statements is comprised of the following for the three and nine months ended September 30, 2020 and 2019 ($ in thousands). Three Months Ended Nine Months Ended 2020 2019 2020 2019 Holding costs, net of other income $ 51 $ (23 ) $ 91 $ 39 (Gains)/losses on sales — — (68 ) — Valuation adjustments — 210 — 210 REO, net $ 51 $ 187 $ 23 $ 249 Month-to-month occupancy rents received of approximately $13,000 and $15,000 for the three months ended September 30, 2020 and 2019, respectively, and approximately $42,000 and $45,000 for the nine months ended September 30, 2020 and 2019, respectively, and sign and storage rents of approximately $11,000 and $43,000 for the three months ended September 30, 2020 and 2019, respectively, and approximately $34,000 and $51,000 for the nine months ended September 30, 2020 and 2019, respectively, are included in holding costs, net of other income . |
Fair Value
Fair Value | 9 Months Ended |
Sep. 30, 2020 | |
Fair Value Disclosures [Abstract] | |
Fair Value | NOTE 6 – FAIR VALUE Secured loans The following methods and assumptions are used when estimating fair value. Secured loans, performing and non-performing not designated as impaired (Level 3) - Each loan is reviewed quarterly for its delinquency, LTV adjusted for the most recent valuation of the underlying collateral, remaining term to maturity, borrower’s payment history and other factors. Due to the nature of the partnership’s loans and borrowers the fair value of loan balances secured by deeds of trust is deemed to approximate the recorded amount (per the financial statements) as our loans: • are of shorter terms at origination than commercial real estate loans by institutional lenders and conventional single-family home mortgage lenders; • are written without a prepayment penalty causing uncertainty/a lack of predictability as to the expected duration of the loan; and • have limited marketability and are not yet sellable into an established secondary market. Secured loans, non-performing and designated impaired (Level 3) - The fair value of secured loans, non-performing and designated impaired is the lesser of the fair value of the collateral or the enforceable amount of the note. Secured loans designated impaired are collateral dependent because it is expected that the primary source of repayment will not be from the borrower but rather from the collateral. The fair value of the collateral is determined on a nonrecurring basis by exercise of judgment based on management’s experience informed by appraisals (by licensed appraisers), brokers’ opinion of values and publicly available information on in-market transactions (Level 3 inputs). When the fair value of the collateral exceeds the enforceable amount of the note, the borrower is likely to redeem the note. Accordingly, third party market participants would generally pay the fair value of the collateral, but no more than the enforceable amount of the note. The following methods and assumptions are used to determine the fair value of the collateral securing a loan. Single family – Management’s preferred method for determining the fair market value of its single-family residential assets is the sale comparison method. Management primarily obtains sales comparables (comps) via its subscription to the RealQuest service, but also uses free online services such as Zillow.com and other available resources to supplement this data. Sale comps are reviewed and adjusted for similarity to the subject property, examining features such as proximity to subject, number of bedrooms and bathrooms, square footage, sale date, condition and year built. If applicable sale comps are not available or deemed unreliable, management will seek additional information in the form of brokers’ opinions of value or appraisals. Multi-family residential – Management’s preferred method for determining the aggregate retail value of its multifamily units is the sale comparison method. Sale comps are reviewed for similarity to the subject property, examining features such as proximity to subject, rental income, number of units, composition of units by the number of bedrooms and bathrooms, square footage, condition, amenities and year built. Management’s secondary method for valuing its multifamily assets as income-producing rental operations is the direct capitalization method. In order to determine market cap rates for properties of the same class and location as the subject, management refers to published data from reliable third-party sources such as the CBRE Cap Rate Survey. Management applies the appropriate cap rate to the subject’s most recent available annual net operating income to determine the property’s value as an income-producing project. When adequate sale comps are not available or reliable net operating income information is not available or the project is under development or is under-performing to market, management will seek additional information and analysis to determine the cost to improve and the intrinsic fair value and/or management will seek additional information in the form of brokers’ opinion of value or appraisals. Commercial buildings – Where commercial rental income information is available, management’s preferred method for determining the fair value of its commercial real estate assets is the direct capitalization method. In order to determine market cap rates for properties of the same class and location as the subject, management refers to reputable third-party sources such as the CBRE Cap Rate Survey. Management then applies the appropriate cap rate to the subject’s most recent available annual net operating income to determine the property’s value as an income-producing commercial rental project. Management supplements the direct capitalization method with additional information in the form of a sale comparison analysis (where adequate sale comps are available), brokers’ opinion of value, or appraisal. When adequate sale comps are not available or reliable rental income information is not available or the project is under development or is under-performing to market, management will seek additional information and analysis to determine the cost to improve and the intrinsic fair value and/or management will seek additional information in the form of brokers’ opinion of value or appraisals. Commercial land – Commercial land has many variations/uses, thus requiring management to employ a variety of methods depending upon the unique characteristics of the subject land, including a determination of its highest and best use. Management may rely on information in the form of a sale comparison analysis (where adequate sale comps are available), brokers’ opinion of value, or appraisal. |
Line of Credit
Line of Credit | 9 Months Ended |
Sep. 30, 2020 | |
Debt Disclosure [Abstract] | |
Line of Credit | NOTE 7 – LINE OF CREDIT Activity involving the line of credit during the three months ended September 30, 2020 and since inception in April 2020 is presented in the following table. Three months ended Since inception Balance, beginning of period $ — $ — Draws 1,515 1,515 Repayments — — Balance September 30, 2020 $ 1,515 $ 1,515 Line of credit - average daily balance beginning September 28, 2020 $ 1,515 $ 1,515 RMI VIII can borrow up to a maximum principal of $10 million subject to a borrowing base calculation pursuant to a credit and term loan agreement (the loan agreement) with a bank. Amounts under the loan agreement are secured by a first priority security interest in the notes and deeds of trust of the pledged loans in the borrowing base. The loan agreement matures March 13, 2022 when all amounts outstanding are then due. The partnership has the option at the maturity date to convert the then outstanding principal balance on the line of credit to a one-year term loan - for a fee of one-quarter of one percent (0.25%) – thereby extending the maturity date to March 13, 2023. On September 28, 2020, RMI VIII drew $1,515,000 on the line of credit. Interest on the outstanding principal is payable monthly and accrues at the per annum rate of the greater of (i) five percent (5%) or (ii) the sum of the one-month LIBOR rate plus three and one-quarter percent (3.25%). If the partnership does not maintain the required compensating balance with a minimum daily average of $1.0 million for any day during the calendar quarter, the interest rate automatically increases by one-quarter of one percent (0.25%) above that rate which would otherwise be applicable for the next calendar quarter retroactive to the beginning of the calendar quarter in which the compensating balance is not maintained. Commencing with the quarter ended September 30, 2020, for each calendar quarter during which the aggregate average daily principal is less than fifty percent (50%) of the maximum principal of $10 million, there is a quarterly unused line fee equal to one-half of one percent (0.50%) per annum of the average daily difference between the principal outstanding and fifty percent (50%) of the maximum principal of $10 million ($5,000,000). The bank, at its sole discretion, elected to waive the unused line of credit fee for the quarter ended September 30, 2020. The loan proceeds are to be used exclusively to fund secured loans. The loan agreement provides for customary financial and borrowing base reporting by RMI VIII to the lending bank and specifies that RMI VIII shall maintain (i) minimum tangible net worth of $50 million, net of amounts due from related companies; (ii) debt service coverage ratio at all times of not less than 2.00 to 1.00; and (iii) loan payment delinquency of less than ten percent (10%) on a quarterly basis as of the calendar quarter-end, calculated as the principal of loans with payments over 61-days past due, less loan loss allowances, divided by total principal of RMI VIII loans. The loan agreement provides that in the event the loan payment delinquency rate exceeds 10.0% as of the end of any quarter, the bank will cease to make any further advances but agrees to not accelerate repayment of the loan. Debt issuance costs of approximately $108,000 are being amortized over the two-year term of the loan agreement. Amortized debt issuance costs totaled approximately $13,000 for the three months ended and approximately $27,000 for the nine months ended September 30, 2020 and are recorded as interest expense. |
Commitments and Contingencies,
Commitments and Contingencies, Other Than Loan and REO Commitments | 9 Months Ended |
Sep. 30, 2020 | |
Commitments And Contingencies Disclosure [Abstract] | |
Commitments and Contingencies, Other Than Loan and REO Commitments | NOTE 8 – COMMITMENTS AND CONTINGENCIES, OTHER THAN LOAN AND REO COMMITMENTS Commitments The partnership’s only commitment at September 30, 2020 is to fund the scheduled withdrawals of limited partner capital as presented in the following table ($ in thousands). 2020 $ 3,875 2021 12,379 2022 8,584 2023 5,659 2024 2,773 Thereafter 595 Total $ 33,865 The partnership has contractual obligations to RMC per the Partnership Agreement. See Note 3 (General Partners and Other Related Parties) for a more detailed discussion on the partnership’s contractual obligations to RMC. Legal proceedings In the normal course of its business, the partnership may become involved in legal proceedings (such as assignment of rents, bankruptcy proceedings, appointment of receivers, unlawful detainers, judicial foreclosure, etc.) to collect the debt owed under the promissory notes, to enforce the provisions of the deeds of trust, to protect its interest in the real property subject to the deeds of trust and to resolve disputes with borrowers, lenders, lien holders and mechanics. None of these actions, in and of themselves, typically would be of any material financial impact to the net income or balance sheet of the partnership. As of the date hereof, the partnership is not involved in any legal proceedings other than those that would be considered part of the normal course of business. |
Subsequent Events
Subsequent Events | 9 Months Ended |
Sep. 30, 2020 | |
Subsequent Events [Abstract] | |
Subsequent Events | NOTE 9 – SUBSEQUENT EVENTS Promissory note receivable from related party (RMI IX) On October 19, 2020, RMI VIII lent $800,000 to RMI IX secured by the net cash flow payable on five mortgage loans totaling approximately $7,535,000 each of which were designated by RMI IX as held for sale and expected to be sold to a third party purchaser prior to November 30, 2020. Interest on the loan accrued at a rate equal to RMI VIII’s pro rata share of the weighted average interest payable on the held for sale loans through a term ending on the earlier of: (i) the closing of the purchase of the held for sale loans; and (ii) November 30, 2020. The promissory note receivable from RMI IX was secured by all proceeds payable to RMI IX upon the sale or repayments of the loans net of any amounts outstanding by RMI IX on its line of credit secured by the loans. On October 30, 2020, RMI IX repaid in full the promissory note amount of $800,000 and interest of $1,831 to RMI VIII. Under the terms of the note, RMI VIII is also entitled to a pro rata share of premium realized (i.e., gain on sale net of costs) upon the sale of the held for sale loans if the sale transaction closes following repayment of the promissory note receivable from RMI IX. The manager evaluated subsequent events that have occurred after September 30, 2020 and determined that there were no other events or transactions occurring during this reporting period that require recognition or disclosure in the consolidated financial statements. |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 9 Months Ended |
Sep. 30, 2020 | |
Accounting Policies [Abstract] | |
Basis of Presentation | Basis of presentation The financial statements are prepared in conformity with accounting principles generally accepted in the United States of America (GAAP). The partnership’s consolidated financial statements include the accounts of the partnership, its wholly-owned subsidiaries (consisting of single-member limited liability companies owning a single real property asset). All significant intercompany transactions and balances have been eliminated in consolidation. |
Reclassifications | Reclassifications Certain reclassifications, not affecting reported net income or total partners’ capital, have been made to the previously issued consolidated financial statements to conform to the current period presentation. |
Management Estimates | Management estimates The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions about the reported amounts of assets and liabilities, and disclosures of contingent assets and liabilities, at the dates of the financial statements and the reported amounts of revenues and expenses during the reported periods. Such estimates relate principally to the determination of the allowance for loan losses, including, when applicable, the valuation of impaired loans (which itself requires determining the fair value of the collateral), and the valuation of real estate owned, at acquisition and subsequently. Actual results could differ materially from these estimates. |
Fair Value Estimates | Fair value estimates GAAP defines fair value as the price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. An orderly transaction is a transaction that assumes exposure to the market for a period prior to the measurement date to allow for marketing activities that are usual and customary for transactions involving such assets and liabilities; it is not a forced transaction. Market participants are buyers and sellers in the principal market that are (i) independent, (ii) knowledgeable, (iii) able to transact and (iv) willing to transact. Fair values of assets and liabilities are determined based on the fair value hierarchy established in GAAP. The hierarchy is comprised of three levels of inputs to be used. • Level 1 inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities that the partnership has the ability to access at the measurement date. An active market is a market in which transactions occur with sufficient frequency and volume to provide pricing information on an ongoing basis. • Level 2 inputs are inputs other than quoted prices that are observable for the asset or liability, either directly or indirectly in active markets and quoted prices for identical assets or liabilities that are not active, and inputs other than quoted prices that are observable or inputs derived from or corroborated by market data. • Level 3 inputs are unobservable inputs for the asset or liability. Unobservable inputs reflect the partnership’s own assumptions about the assumptions market participants would use in pricing the asset or liability (including assumptions about risk). Unobservable inputs are developed based on the best information available in the circumstances and may include the partnership’s own data. The fair value of real property is determined by exercise of judgment based on management’s experience informed by appraisals (by licensed appraisers), brokers’ opinion of values, and publicly available information on in-market transactions. Appraisals of commercial real property generally present three approaches to estimating value: 1) market-comparables or sales approach; 2) cost to replace; and 3) capitalized cash flows or income approach. These approaches may or may not result in a common, single value. The market-comparables approach may yield several different values depending on certain basic assumptions, such as, determining highest and best use (which may or may not be the current use); determining the condition (e.g., as-is, when-completed, or for land when-entitled); and determining the unit of value (e.g., as a series of individual unit sales or as a bulk disposition). Management has the requisite familiarity with the markets it lends in generally and of the properties lent on specifically to analyze sales-comparables and assess their suitability/applicability. Management is acquainted with market participants – investors, developers, brokers, lenders – that are useful, relevant secondary sources of data and information regarding valuation and valuation variability. These secondary sources may have familiarity with and perspectives on pending transactions, successful strategies to optimize value, and the history and details of specific properties – on and off the market – that enhance the process and analysis that is particularly and principally germane to establishing value in distressed markets and/or property types. |
Cash in Banks | Cash in banks At September 30, 2020, substantially all of the partnership’s cash balances in banks exceed the federal depository insurance limit of $250,000. The bank or banks in which funds are deposited are reviewed periodically for their general credit worthiness/investment grade credit rating. See Note 7 (Line of Credit) for compensating balance arrangements. |
Loans and Interest Income | Loans and interest income Performing loans are carried at amortized cost, which is generally equal to the unpaid principal balance (principal). Management has discretion to pay amounts (advances) to third parties on behalf of borrowers to protect the partnership’s interest in the loan. Advances include, but are not limited to, the payment of interest and principal on a senior lien to prevent foreclosure by the senior lien holder, property taxes, insurance premiums, and attorney fees. Advances generally are stated at the amounts paid out on the borrower’s behalf and any accrued interest on amounts paid out, until repaid by the borrower. For performing loans, interest is accrued daily on the principal plus advances, if any. Non-performing loans (i.e., loans with a payment in arears) less than 180 days delinquent continue to recognize interest income as long as the loan is in the process of collection and is considered to be well-secured. Non-performing loans are placed on non-accrual status if 180 days delinquent (or 90 days past maturity without making monthly interest payments) or earlier if management determines that the primary source of repayment will come from the foreclosure and subsequent sale of the collateral securing the loan (which usually occurs when a notice of sale is filed) or when the loan is no longer considered well-secured. When a loan is placed on non-accrual status, the accrual of interest is discontinued for accounting purposes only; however, previously recorded interest is not reversed. A loan may return to accrual status when all delinquent interest and principal payments become current in accordance with the terms of the loan agreement. Late fees are recognized in the period received. The partnership may fund a specific loan net of an interest reserve (one to two years) to insure timely interest payments at the inception of the loan. Any interest reserve is amortized over the period that the amount is prepaid. In the event of an early loan payoff, any unapplied interest reserves would be first applied to any accrued but unpaid interest and then as a reduction of principal. In the normal course of the partnership’s operating activities, performing loans that are maturing or have matured may be renewed at then current market rates of interest and terms for new loans. Such renewals are not designated as impaired. From time to time, the manager negotiates and enters into loan modifications with borrowers whose loans are delinquent (i.e., non-performing). If a loan modification were to result in an economic concession to the borrower (i.e., a significant delay or reduction in cash flows compared to the original note), the modification is deemed a troubled debt restructuring (TDR). In March 2020, various federal regulatory agencies issued an interagency statement on loan modifications and reporting for financial institutions working with borrowers affected by the Coronavirus. The interagency statement was effective immediately and impacted accounting for loan modifications. The agencies confirmed with the staff of the Financial Accounting Standards Board (FASB) that short-term modifications made on a good faith basis in response to COVID- 19 to borrowers who were current prior to any relief, are not to be considered TDRs. This includes short-term (e.g., six months) modifications such as payment deferrals, fee waivers, extensions of repayment terms, or other delays in payment that are insignificant. The partnership funds loans with the intent to hold the loans until maturity. From time to time the partnership may sell certain loans when the manager determines it to be in the best interest of the partnership. Loans are classified as held-for-sale once a decision has been made to sell loans and the loans held-for-sale have been identified. Loans classified as held for sale are carried at the lower of cost or fair value. No loss has been recorded upon reclassification to held for sale as the fair value is in excess of the cost. The loans held for sale at September 30, 2020 are expected to be sold in November 2020. |
Allowance for Loan Losses | Allowance for loan losses Loans and the related accrued interest and advances (i.e., the loan balance) are analyzed on a periodic basis for ultimate recoverability. Collateral fair values are reviewed quarterly and the protective equity for each loan is computed. As used herein, “protective equity” is the dollar amount by which the net realizable value (i.e., fair value less the cost to sell) of the collateral, net of any senior liens, exceeds the loan balance, where “loan balance” is the sum of the unpaid principal, advances and the recorded interest thereon. If based upon current information and events, it is probable the partnership will be unable to collect all amounts due according to the contractual terms of the loan agreement, then a loan may be designated as impaired. Impaired loans are included in management’s periodic analysis of recoverability. Payments on impaired loans are applied to late fees, then to the accrued interest, then to advances, and lastly to principal. For loans that are deemed to be collateral dependent, a provision for loan losses is recorded to adjust the allowance for loan losses (principal and/or recorded interest) in an amount such that the net carrying amount (unpaid principal less the specific allowance) is reduced to the lower of the loan balance or the estimated fair value of the related collateral, net of any costs to sell in arriving at net realizable value and net of any senior loans. The partnership charges off uncollectible loans and related receivables directly to the allowance account once it is determined the full amount is not collectible. Any amounts collected after a charge off is deemed a recovery of loan losses. At foreclosure, any excess of the recorded investment in the loan (accounting basis) over the net realizable value of the collateral is charged against the allowance for loan losses. |
Real Estate Owned (REO) | Real estate owned (REO) Real estate owned (REO) is property acquired in full or partial settlement of loan obligations generally through foreclosure and is recorded at acquisition at the property’s net realizable value, which is the fair value less estimated costs to sell, as applicable. The fair value estimates are derived from information available in the real estate markets including similar property, and often require the experience and judgment of third parties such as commercial real estate appraisers and brokers. The estimates figure materially in calculating the value of the property at acquisition, the level of charge to the allowance for loan losses and any subsequent valuation reserves. After acquisition, costs incurred relating to the development and improvement of property are capitalized to the extent they do not cause the recorded value to exceed the net realizable value, whereas costs relating to holding and disposition of the property are expensed as incurred. After acquisition, REO is analyzed periodically for changes in fair values and any subsequent write down is charged to operations expense. Any recovery in the fair value subsequent to such a write down is recorded, not to exceed the value recorded at acquisition. Recognition of gains on the sale of real estate is dependent upon the transaction meeting certain criteria related to the nature of the property and the terms of the sale including potential seller financing. |
Debt Issuance Costs | Debt issuance costs Debt issuance costs are the fees and commissions incurred in the course of obtaining a line of credit for services from banks, law firms and other professionals and are amortized on a straight-line basis as interest expense over the term of the line of credit. |
Recently Issued Accounting Pronouncements | Recently issued accounting pronouncements - Accounting and Financial Reporting for Expected Credit Losses The FASB issued an Accounting Standards Update (ASU) that significantly changes how entities will account for credit losses for most financial assets that are not measured at fair value through net income. The new standard will supersede currently in effect guidance and applies to all entities. Entities will be required to use a current expected credit loss (CECL) model to estimate credit impairment. This estimate will be forward-looking, meaning management will be required to use not only historical trends and current conditions, but must also consider forecasts about future economic conditions to determine the expected credit loss over the remaining life of an instrument. This will be a significant change from the current incurred credit loss model and generally may result in allowances being recognized in earlier periods than under the current credit loss model. The ASU is effective for smaller reporting companies for interim and annual reporting periods in 2023. RMI VIII invests in real estate secured loans made with the expectation that the possibility of credit losses is remote as a result of substantial protective equity provided by the underlying collateral. The real estate secured programs and low loan-to-value ratios have caused RMC to expect that the adoption of the CECL model from the incurred loss models presently in use as to credit loss recognition will likely not materially impact the reported results of operations or financial position of the partnership. However, the impact, if any, upon adoption will be dependent upon the facts and circumstances relating to our loans at that date. - Reference Rate Reform In March 2020, the FASB issued ASU 2020-04, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting, provides temporary optional expedients for various agreements and contracts that utilize the London Interbank Offered Rate (LIBOR) as the benchmark reference rate. The relief generally applies to eligible modifications of contractual terms that change (or have the potential to change) the amount or timing of contractual cash flows related to replacement of a reference rate. The relief allows such modifications to be accounted for as continuations of existing contracts without additional analysis. As the guidance in ASU 2020-04 is intended to assist entities during the global market-wide reference rate transition period, it is in effect from March 12, 2020 through December 31, 2022. RMC is currently evaluating the impact of the potential discontinuance of LIBOR in relation to the partnership’s line of credit and has not yet adopted the optional relief. |
General Partners and Other Re_2
General Partners and Other Related Parties (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Related Party Transactions [Abstract] | |
Schedule of Formation Loan Activity | The formation loan activity for the nine months ended September 30, 2020 is summarized in the following table ($ in thousands). 2020 Balance, January 1 $ 4,292 Early withdrawal penalties (168 ) Repayments — Balance, September 30 $ 4,124 |
Schedule of Withdrawals of Limited Partner Capital | Withdrawals of limited partners’ capital for the three and nine months ended September 30, 2020 and 2019 are presented in the following table ($ in thousands). Three Months Ended Nine Months Ended Withdrawals 2020 2019 2020 2019 Without penalty $ 3,767 $ 4,863 $ 11,813 $ 15,624 With penalty 403 960 1,681 3,236 Total $ 4,170 $ 5,823 $ 13,494 $ 18,860 Scheduled, at September 30 $ 33,865 $ 43,769 $ 33,865 $ 43,769 |
Scheduled Withdrawals of Limited Partner Capital Account | Scheduled withdrawals of limited partners’ capital as of September 30, 2020 are presented in the following table ($ in thousands). 2020 $ 3,875 2021 12,379 2022 8,584 2023 5,659 2024 2,773 Thereafter 595 Total $ 33,865 The partnership’s only commitment at September 30, 2020 is to fund the scheduled withdrawals of limited partner capital as presented in the following table ($ in thousands). 2020 $ 3,875 2021 12,379 2022 8,584 2023 5,659 2024 2,773 Thereafter 595 Total $ 33,865 |
Loans (Tables)
Loans (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Secured Loan Principal Transactions | Secured loan transactions for the three and nine months ended September 30, 2020 are summarized in the following table ($ in thousands). Three months ended Nine months ended Principal, beginning of period $ 77,895 $ 86,203 Loans funded 2,275 3,775 Loan transferred to related mortgage fund — (2,297 ) Collected - secured (2,869 ) (7,441 ) Loans transferred to held for sale (2) (2,331 ) (2,331 ) Foreclosures (1) — (2,939 ) Principal, September 30, 2020 $ 74,970 $ 74,970 1) The partnership foreclosed on one loan, with a recorded investment of approximately $3,163,000. The net investment in the loan was adjusted to the estimated fair value of the related collateral, net of any costs to sell in arriving at net realizable value and net of any senior loans, which resulted in the recognition of foregone interest of approximately $140,000 during the nine months ended September 30, 2020. 2) At September 30, 2020, two loans with a combined principal of approximately $2,331,000 were designated ‘held for sale’ for financial reporting purposes and are separately classified as such on the balance sheet and accompanying notes to the financial statements. All loans held for sale were performing and in first lien position. At September 30, 2020, the two loans held for sale had a combined accrued interest balance of approximately $15,870 all of which was received by the partnership in October 2020. |
Secured Loans Characteristics | Secured loans had the characteristics presented in the following table ($ in thousands). September 30, December 31, 2020 2019 Number of secured loans 37 47 Secured loans – principal $ 74,970 $ 86,203 Secured loans – lowest interest rate (fixed) 5.0 % 5.0 % Secured loans – highest interest rate (fixed) 10.8 % 10.8 % Average secured loan – principal $ 2,026 $ 1,834 Average principal as percent of total principal 2.7 % 2.1 % Average principal as percent of partners’ capital, net of formation loan 2.5 % 2.0 % Average principal as percent of total assets 2.3 % 1.9 % Largest secured loan – principal $ 10,200 $ 10,200 Largest principal as percent of total principal 13.6 % 11.8 % Largest principal as percent of partners’ capital, net of formation loan 12.5 % 10.9 % Largest principal as percent of total assets 11.6 % 10.8 % Smallest secured loan – principal $ 47 $ 51 Smallest principal as percent of total principal 0.1 % 0.1 % Smallest principal as percent of partners’ capital, net of formation loan 0.1 % 0.1 % Smallest principal as percent of total assets 0.1 % 0.1 % Number of California counties where security is located 15 15 Largest percentage of principal in one California county 41.7 % 38.2 % Number of secured loans with a filed notice of default — 1 Secured loans in foreclosure – principal $ — $ 2,939 Number of secured loans with prepaid interest — 2 Prepaid interest $ — $ 121 |
Secured Loans by Lien Position in the Collateral | At funding, secured loans had the lien positions presented in the following table ($ in thousands). September 30, 2020 December 31, 2019 Loans Principal Percent Loans Principal Percent First trust deeds 27 $ 68,029 91 % 31 $ 72,621 84 % Second trust deeds 10 6,941 9 16 13,582 16 Total principal, secured loans 37 $ 74,970 100 % 47 $ 86,203 100 % Liens due other lenders at loan closing 16,136 29,817 Total debt $ 91,106 $ 116,020 Appraised property value at loan closing $ 185,725 $ 226,185 Percent of total debt to appraised values (LTV) at loan closing (3) 54.0 % 55.1 % 3) Based on appraised values and liens due other lenders at loan closing. The weighted-average loan-to-value (LTV) computation above does not take into account subsequent increases or decreases in property values following the loan closing, nor does it include decreases or increases on senior liens to other lenders. |
Secured Loans by Property Type of the Collateral | Secured loans summarized by property type are presented in the following table ($ in thousands). September 30, 2020 December 31, 2019 Loans Principal Percent Loans Principal Percent Single family (4) 21 $ 17,742 24 % 32 $ 30,629 36 % Multi-family 2 7,068 9 2 7,072 7 Commercial 12 48,275 64 12 48,117 56 Land 2 1,885 3 1 385 1 Total principal, secured loans 37 $ 74,970 100 % 47 $ 86,203 100 % 4) Single family properties include owner-occupied and non-owner occupied 1-4 unit residential buildings, condominium units, townhouses, and condominium complexes. The single family property type as of September 30, 2020 consists of 9 loans with principal of approximately $4,527,000 that are owner occupied and 12 loans with principal of approximately $13,215,000 that are non-owner occupied. Single family property type at December 31, 2019 consisted of 12 loans with principal of approximately $7,642,000 that are owner occupied and 20 loans with principal of approximately $22,987,000 that are non-owner occupied. |
Secured Loans Distributed within California | The distribution of secured loans within California by counties is presented in the following table ($ in thousands). September 30, 2020 December 31, 2019 Principal Percent Principal Percent San Francisco Bay Area (5) San Francisco $ 31,244 41.7 % $ 32,908 38.2 % San Mateo 17,148 22.9 17,221 20.0 Santa Clara 1,600 2.1 6,281 7.3 Alameda 2,874 3.8 3,349 3.9 Napa — — 548 0.6 Contra Costa 303 0.4 308 0.3 Marin 179 0.2 513 0.6 53,348 71.1 61,128 70.9 Other Northern California Placer 1,500 2.0 — — Santa Cruz 511 0.7 1,376 1.6 Stanislaus 555 0.7 — — Amador 706 0.9 719 0.8 Mariposa 47 0.1 51 0.1 Monterey — — 193 0.2 3,319 4.4 2,339 2.7 Total Northern California 56,667 75.5 63,467 73.6 Los Angeles & Coastal Los Angeles 10,205 13.6 14,623 17.0 Santa Barbara 2,074 2.8 2,085 2.4 Orange 644 0.9 648 0.8 12,923 17.3 17,356 20.2 Other Southern California San Bernardino 5,380 7.2 5,380 6.2 5,380 7.2 5,380 6.2 Total Southern California 18,303 24.5 22,736 26.4 Total principal, secured loans $ 74,970 100.0 % $ 86,203 100.0 % 5) Includes the Silicon Valley |
Secured Loans Scheduled Maturities | Secured loans scheduled to mature as of September 30, 2020 are presented in the following table ($ in thousands). Scheduled maturities, as of September 30, 2020 Loans Principal Percent 2020 (6) 4 $ 21,273 28 % 2021 (7) 20 34,643 46 2022 6 5,461 7 2023 2 3,802 5 2024 2 1,106 2 Total scheduled maturities 34 66,285 88 Matured as of September 30, 2020 3 8,685 12 Total principal, secured loans 37 $ 74,970 100 % 6) Loans scheduled to mature in 2020 after September 30. Includes one loan with principal of approximately $5,380,000 which matured July 1, 2020. The partnership entered into a forbearance agreement with the borrower in September 2020 which deferred the maturity date until December 1, 2020. 7) Includes one loan with principal of approximately $5,355,000 which matured October 1, 2019. The partnership entered into a forbearance agreement with the borrower in June 2020 which deferred the maturity date until January 1, 2021. |
Past Due Financing Receivables | Payments in arrears for non-performing secured loans (i.e., loans past maturity and monthly payments of principal and interest past due 30 or more days) as of September 30, 2020 and December 31, 2019 are presented in the following tables ($ in thousands). Loans Principal Interest (8) At September 30, 2020 Past maturity Monthly payments Past maturity Monthly payments Past maturity Monthly payments Total payments in arrears Payments in arrears 30-89 days (1-3 payments) — 1 $ — $ — $ — $ 39 $ 39 90-179 days (4-6 payments) 1 — 3,896 — — — 3,896 180 or more days (more than 6 payments) (9) 4 — 15,524 — 726 — 16,250 Total past due (10) 5 1 $ 19,420 $ — $ 726 $ 39 $ 20,185 8) Interest includes foregone interest of $311,946 on non-accrual loans past maturity. September 2020 interest is due on October 1, 2020 and is not included in the payments in arrears at September 30, 2020. 9) Two loans, with an aggregate principal balance of approximately $10,735,000, included in past maturity payments (principal and interest) 180 or more days, had forbearance agreements in place at September 30, 2020. See the disclosure above for a discussion of the terms of the forbearance agreements. 10) Included in the table above is one loan past maturity with principal of approximately $3,896,000 and an original maturity date of July 1, 2020. The borrower continued to make monthly payments past the original maturity date, and in October 2020, the maturity date was extended by two years to July 1, 2022. Loans Principal Interest ( 1 1 ) At December 31, 2019 Past maturity Monthly payments Past maturity Monthly payments Past maturity Monthly payments Total payments in arrears Payments in arrears 30-89 days (1-2 payments) — — $ — $ — $ — $ — $ — 90-179 days (3-5 payments) 1 — 5,355 — 76 — 5,431 180 or more days (6 or more payments) 3 — 6,955 — 394 — 7,349 Total payments in arrears 4 — $ 12,310 $ — $ 470 $ — $ 12,780 |
Secured Loans in Non-Accrual Status | Delinquency/Loans in non-accrual status Secured loans in non-accrual status are summarized in the following table ($ in thousands). September 30, December 31, 2020 2019 Number of loans 4 3 Principal $ 15,524 $ 6,955 Advances 23 25 Accrued interest 451 184 Total recorded investment $ 15,998 $ 7,164 Foregone interest $ 384 $ 298 |
By Days Past Due [Member] | |
Past Due Financing Receivables | Secured loans summarized by payment-delinquency status are presented in the following table ($ in thousands). September 30, 2020 December 31, 2019 Loans Principal Loans Principal Current 31 $ 47,554 43 $ 73,893 Past Due 30-89 days 1 7,996 — — 90-179 days 1 3,896 1 5,355 180 or more days 4 15,524 3 6,955 Total past due 6 27,416 4 12,310 Total principal, secured loans 37 $ 74,970 47 $ 86,203 |
Impaired Loans [Member] | |
Impaired Financing Receivables | Loans designated impaired and any associated allowance for loan losses is presented in the following table ($ in thousands). September 30, December 31, 2020 2019 Principal $ 15,524 $ 12,310 Recorded investment (12) 15,998 12,931 Impaired loans without allowance 15,998 12,931 Impaired loans with allowance — — Allowance for loan losses, impaired loans — — Number of Loans 4 4 Weighted average LTV, at origination 52.5 % 68.0 % 12) Recorded investment is the sum of principal, advances, and accrued interest for financial reporting purposes. |
Average Balances And Interest Income [Member] | |
Impaired Financing Receivables | Loans designated impaired had an average recorded investment balance, interest income recognized, and interest income received in cash for the nine months ended September 30, 2020 and the year ended December 31, 2019 as presented in the following table ($ in thousands). September 30, December 31, 2020 2019 Average recorded investment $ 12,078 $ 8,160 Interest income recognized 631 298 Interest income received in cash 368 284 |
Real Estate Owned (REO) (Tables
Real Estate Owned (REO) (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Real Estate [Abstract] | |
Summary of REO Transactions and Valuation Adjustments | REO transactions and valuation adjustments for the three and nine months ended September 30, 2020 are summarized in the following table ($ in thousands). Three months ended Nine months ended REO Valuation Allowance REO, net REO Valuation Allowance REO, net Balance, beginning of period $ 12,161 $ (3,239 ) $ 8,922 $ 6,491 $ (3,239 ) $ 3,252 Acquisitions from foreclosure — — — 5,787 — 5,787 Dispositions — — — (117 ) — (117 ) Balance, September 30, 2020 $ 12,161 $ (3,239 ) $ 8,922 $ 12,161 $ (3,239 ) $ 8,922 |
Schedule of Mortgage Payable | Mortgages payable at September 30, 2020 are summarized in the following table ($ in thousands). Lender - summary of terms 2020 Wells Fargo Bank - secured by a first trust deed on a single family residence located in Los Angeles County, matures November 1, 2044, monthly payment $7,754.40, and interest at 4.125% until October 31, 2024; thereafter interest at LIBOR plus 2.25%, Wells Fargo submitted a payoff statement in July 2020. $ 1,453 East West Bank - secured by a first trust deed on a single family residence located in Los Angeles County, matures January 14, 2035, with interest at Prime plus 1% or 4.25% at June 30, 2020. Subsequent to foreclosure, East West Bank submitted a demand to be paid in full in July 2020. 996 Total mortgages payable $ 2,449 |
Summary of REO, Net | REO, net in operations expense on the consolidated income statements is comprised of the following for the three and nine months ended September 30, 2020 and 2019 ($ in thousands). Three Months Ended Nine Months Ended 2020 2019 2020 2019 Holding costs, net of other income $ 51 $ (23 ) $ 91 $ 39 (Gains)/losses on sales — — (68 ) — Valuation adjustments — 210 — 210 REO, net $ 51 $ 187 $ 23 $ 249 |
Line of Credit (Tables)
Line of Credit (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Debt Disclosure [Abstract] | |
Schedule of Activity Involving Line of Credit | Activity involving the line of credit during the three months ended September 30, 2020 and since inception in April 2020 is presented in the following table. Three months ended Since inception Balance, beginning of period $ — $ — Draws 1,515 1,515 Repayments — — Balance September 30, 2020 $ 1,515 $ 1,515 Line of credit - average daily balance beginning September 28, 2020 $ 1,515 $ 1,515 |
Commitments and Contingencies_2
Commitments and Contingencies, Other Than Loan and REO Commitments (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Commitments And Contingencies Disclosure [Abstract] | |
Scheduled Withdrawals of Limited Partner Capital Account | Scheduled withdrawals of limited partners’ capital as of September 30, 2020 are presented in the following table ($ in thousands). 2020 $ 3,875 2021 12,379 2022 8,584 2023 5,659 2024 2,773 Thereafter 595 Total $ 33,865 The partnership’s only commitment at September 30, 2020 is to fund the scheduled withdrawals of limited partner capital as presented in the following table ($ in thousands). 2020 $ 3,875 2021 12,379 2022 8,584 2023 5,659 2024 2,773 Thereafter 595 Total $ 33,865 |
Organization and General - Addi
Organization and General - Additional Information (Details) - Installment | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Dec. 31, 2019 | |
Organizational and General Details [Line Items] | |||
Loans receivable, term | 5 years | ||
Loan to value ratios | 52.50% | 68.00% | |
Ownership interest held by the general partner | 62.00% | 61.00% | |
Minimum Amount of Time Before Leaving Partnership Without Penalty | 5 years | ||
Early Withdrawal Penalty Percentage | 10.00% | ||
Maximum Percentage of Total Limited Partners Capital Available for Liquidation During One Year | 20.00% | ||
Limited Partner [Member] | |||
Organizational and General Details [Line Items] | |||
Number of Quarterly Installments for Withdrawal From Partnership | 4 | ||
Limited Partner [Member] | Internal Revenue Code [Member] | |||
Organizational and General Details [Line Items] | |||
Number of Quarterly Installments for Withdrawal From Partnership | 20 | ||
Limited Partner [Member] | After Five Year Period [Member] | |||
Organizational and General Details [Line Items] | |||
Number of Quarterly Installments for Withdrawal From Partnership | 20 | ||
Benefit Plan Investors [Member] | After Five Year Period [Member] | Internal Revenue Code [Member] | |||
Organizational and General Details [Line Items] | |||
Number of Quarterly Installments for Withdrawal From Partnership | 4 | ||
Debt-to-Value Ratio, Less than 80 Percent [Memb | Maximum [Member] | |||
Organizational and General Details [Line Items] | |||
Loan to value ratios | 70.00% | ||
RMC [Member] | |||
Organizational and General Details [Line Items] | |||
Percentage of income or loss allocated | 0.66% | ||
General partner equity deficit | 100.00% | ||
Agreement expiration date | Jan. 1, 2020 | ||
RMC and Burwell [Member] | |||
Organizational and General Details [Line Items] | |||
Limited Liability Company (LLC) or Limited Partnership (LP), Managing Member or General Partner, Profit (Loss) Percentage | 1.00% |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies - Additional Information (Details) | 3 Months Ended | 9 Months Ended | |
Sep. 30, 2019USD ($) | Sep. 30, 2020USD ($)Approach | Sep. 30, 2019USD ($) | |
Summary of Significant Accounting Policies Details [Line Items] | |||
Estimating real property value, number of approaches | Approach | 3 | ||
Threshold period past due for impaired loans placed on non-accrual status | 180 days | ||
Interest reserve minimum length | 1 year | ||
Interest reserve maximum length | 2 years | ||
Troubled debt restructuring | The agencies confirmed with the staff of the Financial Accounting Standards Board (FASB) that short-term modifications made on a good faith basis in response to COVID- 19 to borrowers who were current prior to any relief, are not to be considered TDRs. This includes short-term (e.g., six months) modifications such as payment deferrals, fee waivers, extensions of repayment terms, or other delays in payment that are insignificant. | ||
Gain on sale, loans | $ 38,000 | $ 0 | $ 38,000 |
Loans held for sale expected to be sold date | 2020-11 | ||
Maximum [Member] | |||
Summary of Significant Accounting Policies Details [Line Items] | |||
Federal depository insurance limit | $ 250,000 | ||
Threshold period past due for impaired loans to recognize interest income | 180 days |
General Partners and Other Re_3
General Partners and Other Related Parties - Additional Information (Details) | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2020USD ($) | Sep. 30, 2019USD ($) | Sep. 30, 2020USD ($)Loan | Sep. 30, 2019USD ($)Loan | Dec. 31, 2026USD ($) | |
General Partners And Other Related Parties Details [Line Items] | |||||
Management fee, description | The general partners are entitled to monthly fees for managing the partnership’s loan portfolio and operations of up to 1/32 of 1% of the “net asset value” (3/8 of 1% annually). | ||||
Loan Brokerage Commissions, Maximum Percent of Assets | 4.00% | ||||
Number of performing loans | Loan | 1 | 0 | |||
Performing loans mortgaged, par value | $ 2,297,000 | $ 2,297,000 | |||
Scheduled withdrawals | 33,865,000 | 33,865,000 | |||
Total mortgage loans amount | 2,449,000 | 2,449,000 | |||
Payable to related parties | 77,000 | 77,000 | |||
RMC and Burwell [Member] | |||||
General Partners And Other Related Parties Details [Line Items] | |||||
Payable to related parties | 77,190 | 77,190 | |||
Limited Partner [Member] | |||||
General Partners And Other Related Parties Details [Line Items] | |||||
Scheduled withdrawals | 33,865,000 | $ 43,769,000 | 33,865,000 | $ 43,769,000 | |
Partnership Agreement [Member] | Limited Partner [Member] | |||||
General Partners And Other Related Parties Details [Line Items] | |||||
Scheduled withdrawals | 404,000 | 404,000 | |||
RMC [Member] | |||||
General Partners And Other Related Parties Details [Line Items] | |||||
Annual payments on the formation loan | 650,000 | 650,000 | |||
RMC [Member] | Forecast [Member] | |||||
General Partners And Other Related Parties Details [Line Items] | |||||
Formation loans future minimum payments net of early withdrawal penalties due | $ 392,000 | ||||
Formation Loan [Member] | |||||
General Partners And Other Related Parties Details [Line Items] | |||||
Formation loan, advances | 22,567,000 | ||||
Receivable from affiliate (formation loan) | 4,124,000 | 4,124,000 | |||
RMC [Member] | |||||
General Partners And Other Related Parties Details [Line Items] | |||||
Brokerage commissions paid to RMC | 218,000 | $ 695,000 | 295,000 | $ 1,138,000 | |
RedwoodMortgageInvestorsIX [Member] | |||||
General Partners And Other Related Parties Details [Line Items] | |||||
Borrowings from related party | 850,000 | 850,000 | |||
Total mortgage loans amount | $ 2,331,000 | 2,331,000 | |||
Repayment of promissory note amount | 850,000 | ||||
Interest expense, borrowings | $ 2,700 | ||||
Maximum [Member] | |||||
General Partners And Other Related Parties Details [Line Items] | |||||
Annual mortgage servicing fees, percentage | 1.50% | 1.50% | |||
Percentage of offering proceeds | 7.00% |
General Partners and Other Re_4
General Partners and Other Related Parties - Formation Loan Activity (Details) $ in Thousands | 9 Months Ended |
Sep. 30, 2020USD ($) | |
Formation Loan - Transactions [Abstract] | |
Balance, January 1 | $ 4,292 |
Early withdrawal penalties | (168) |
Repayments | 0 |
Balance, September 30 | $ 4,124 |
General Partners and Other Re_5
General Partners and Other Related Parties - Schedule of Withdrawals of Limited Partner Capital (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
General Partners And Other Related Parties Details [Line Items] | ||||
Scheduled, at September 30 | $ 33,865 | $ 33,865 | ||
Limited Partner [Member] | ||||
General Partners And Other Related Parties Details [Line Items] | ||||
Scheduled, at September 30 | 33,865 | $ 43,769 | 33,865 | $ 43,769 |
Limited Partner [Member] | Capital Withdrawals-without Penalty [Member] | ||||
General Partners And Other Related Parties Details [Line Items] | ||||
Total, Capital withdrawals | 3,767 | 4,863 | 11,813 | 15,624 |
Limited Partner [Member] | Capital Withdrawals-subject to Penalty [Member] | ||||
General Partners And Other Related Parties Details [Line Items] | ||||
Total, Capital withdrawals | 403 | 960 | 1,681 | 3,236 |
Limited Partner [Member] | Capital Subject to Withdrawals Net [Member] | ||||
General Partners And Other Related Parties Details [Line Items] | ||||
Total, Capital withdrawals | $ 4,170 | $ 5,823 | $ 13,494 | $ 18,860 |
General Partners and Other Re_6
General Partners and Other Related Parties - Scheduled Capital Account Withdrawal Requests (Details) $ in Thousands | Sep. 30, 2020USD ($) |
Partners Capital Account Withdrawals [Abstract] | |
2020 | $ 3,875 |
2021 | 12,379 |
2022 | 8,584 |
2023 | 5,659 |
2024 | 2,773 |
Thereafter | 595 |
Total | $ 33,865 |
Loans - Additional Information
Loans - Additional Information (Details) | Jul. 31, 2020 | Oct. 01, 2019 | Jun. 30, 2020USD ($) | Sep. 30, 2020USD ($)Loan | Sep. 30, 2019USD ($) | Sep. 30, 2020USD ($)Loan | Sep. 30, 2019USD ($) | Dec. 31, 2019USD ($)Loan |
Loans Details [Line Items] | ||||||||
Loans receivable number of loans | Loan | 37 | 37 | 47 | |||||
Loans receivable, percent | 100.00% | 100.00% | 100.00% | |||||
Loans receivable, number of interest only loans | Loan | 16 | 16 | ||||||
Loans receivable, amortization term | 30 years | |||||||
Mortgage loans on real estate number of loans renewed | Loan | 6 | 12 | ||||||
Mortgage loans on real estate principal renewed | $ 16,409,000 | $ 31,486,000 | ||||||
Borrower payments deposit in trust account | 106,346 | 106,346 | $ 21,592 | |||||
Loans receivable largest loan (in Dollars) | 10,200,000 | $ 10,200,000 | 10,200,000 | |||||
Loans receivable maturity date | Oct. 1, 2019 | Jul. 1, 2020 | ||||||
Mortgage loan balance | $ 5,355,000 | $ 5,380,000 | $ 5,380,000 | |||||
Loans Receivable Defer Maturity Date | Dec. 1, 2020 | Jan. 1, 2021 | Jan. 1, 2021 | Dec. 1, 2020 | ||||
Mortgage loans on real estate, number of loans matured | Loan | 3 | 3 | ||||||
Accrued interest | $ 968,000 | $ 968,000 | 711,000 | |||||
Provision (and allowance) for loan losses | 0 | $ 0 | 0 | $ 0 | 50,000 | |||
Allowance for loan and lease loss, recovery of bad debts | $ 126,000 | 8,000 | $ 1,613,000 | 134,000 | $ 1,613,000 | |||
Debt redemption description | In June 2020, the partnership recorded a recovery of loan losses of $126,000 from a court order dated June 2020 pursuant to the terms of a judgment dated October 2012 against a borrower/guarantor. The amounts recovered were previously charged off. The funds were received in July 2020. | |||||||
Non-accrual Status [Member] | ||||||||
Loans Details [Line Items] | ||||||||
Accrued interest | 451,000 | 451,000 | 184,000 | |||||
Past Due 90 Days Or More [Member] | ||||||||
Loans Details [Line Items] | ||||||||
Mortgage loan balance | 3,896,000 | $ 3,896,000 | $ 5,355,000 | |||||
Number of loan designated impaired and non-accrual substantially paid off | Loan | 1 | 1 | ||||||
Loans receivable, interest accrual, period | 90 days | |||||||
Accrued interest | 30,034 | $ 30,034 | $ 114,000 | |||||
Loans receivable, number of days past maturity date | 91 days | |||||||
Past Due 90 Days Or More [Member] | Non-accrual Status [Member] | ||||||||
Loans Details [Line Items] | ||||||||
Mortgage loan balance | $ 15,524,000 | $ 15,524,000 | ||||||
Mortgage loans on real estate, number of loans matured | Loan | 4 | 4 | ||||||
Past Due 180 Days or More [Member] | Non-accrual Status [Member] | ||||||||
Loans Details [Line Items] | ||||||||
Mortgage loan balance | $ 6,955,000 | |||||||
Mortgage loans on real estate, number of loans matured | Loan | 3 | |||||||
Minimum [Member] | ||||||||
Loans Details [Line Items] | ||||||||
Loans receivable, remaining term | 5 years | |||||||
Five Year Term or Less [Member] | ||||||||
Loans Details [Line Items] | ||||||||
Loans receivable number of loans | Loan | 28 | 28 | ||||||
Loans receivable, percent | 76.00% | 76.00% | ||||||
Loans receivable, percent of aggregate principal | 91.00% | 91.00% | ||||||
Interest Only [Member] | ||||||||
Loans Details [Line Items] | ||||||||
Loans receivable, percent | 43.00% | 43.00% | ||||||
Loans receivable, percent of aggregate principal | 74.00% | 74.00% | ||||||
Largest Loan [Member] | ||||||||
Loans Details [Line Items] | ||||||||
Loans receivable, yield of loan acquired | 9.50% | 9.50% | ||||||
Loans receivable maturity date | Dec. 1, 2020 | |||||||
Construction Loans [Member] | ||||||||
Loans Details [Line Items] | ||||||||
Loans outstanding | $ 0 | $ 0 | ||||||
Rehabilitation Loans [Member] | ||||||||
Loans Details [Line Items] | ||||||||
Loans outstanding | $ 0 | $ 0 |
Loans - Secured Loan Principal
Loans - Secured Loan Principal Transactions (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2020 | Sep. 30, 2019 | ||
Receivables [Abstract] | ||||
Principal, beginning of period | $ 77,895 | $ 86,203 | ||
Loans funded | (2,275) | (3,775) | $ (52,838) | |
Loan transferred to related mortgage fund | (2,297) | |||
Collected - secured | (2,869) | (7,441) | ||
Loans transferred to held for sale | [1] | (2,331) | (2,331) | |
Foreclosures | [2] | (2,939) | (2,939) | |
Principal, ending of period | $ 74,970 | $ 74,970 | ||
[1] | At September 30, 2020, two loans with a combined principal of approximately $2,331,000 were designated ‘held for sale’ for financial reporting purposes and are separately classified as such on the balance sheet and accompanying notes to the financial statements. All loans held for sale were performing and in first lien position. At September 30, 2020, the two loans held for sale had a combined accrued interest balance of approximately $15,870 all of which was received by the partnership in October 2020. | |||
[2] | The partnership foreclosed on one loan, with a recorded investment of approximately $3,163,000. The net investment in the loan was adjusted to the estimated fair value of the related collateral, net of any costs to sell in arriving at net realizable value and net of any senior loans, which resulted in the recognition of foregone interest of approximately $140,000 during the nine months ended September 30, 2020 |
Loans - Secured Loan Principa_2
Loans - Secured Loan Principal Transactions (Parenthetical) (Details) | 9 Months Ended |
Sep. 30, 2020USD ($)Loan | |
Receivables [Abstract] | |
Number of loan partnership foreclosed | Loan | 1 |
Recorded investment | $ 3,163,000 |
Foregone interest | $ 140,000 |
Number of loan held for sale | Loan | 2 |
Loans held for sale, principal | $ 2,331,000 |
Loan held for sale combined accrued interest | $ 15,870 |
Loans - Secured Loans Character
Loans - Secured Loans Characteristics (Details) | 1 Months Ended | 9 Months Ended | 12 Months Ended | ||
Jun. 30, 2020USD ($)MortgageLoan | Sep. 30, 2020USD ($)LoanCountyMortgageLoan | Dec. 31, 2019USD ($)LoanCountyMortgageLoan | Jul. 31, 2020USD ($) | Oct. 01, 2019USD ($) | |
Secured Loan Transactions [Line Items] | |||||
Number of secured loans | Loan | 37 | 47 | |||
Secured loans - principal (in Dollars) | $ 77,895,000 | $ 74,970,000 | $ 86,203,000 | $ 5,380,000,000 | $ 5,355,000,000 |
Average secured loan - principal (in Dollars) | $ 2,026,000 | $ 1,834,000 | |||
Average principal as percent of total principal | 2.70% | 2.10% | |||
Average principal as percent of partners’ capital, net of formation loan | 2.50% | 2.00% | |||
Average principal as percent of total assets | 2.30% | 1.90% | |||
Largest secured loan - principal (in Dollars) | $ 10,200,000 | $ 10,200,000 | |||
Largest principal as percent of total principal | 13.60% | 11.80% | |||
Largest principal as percent of partners’ capital, net of formation loan | 12.50% | 10.90% | |||
Largest principal as percent of total assets | 11.60% | 10.80% | |||
Smallest secured loan - principal (in Dollars) | $ 47,000 | $ 51,000 | |||
Smallest principal as percent of total principal | 0.10% | 0.10% | |||
Smallest principal as percent of partners’ capital, net of formation loan | 0.10% | 0.10% | |||
Smallest principal as percent of total assets | 0.10% | 0.10% | |||
Number of California counties where security is located | County | 15 | 15 | |||
Largest percentage of principal in one California county | 41.70% | 38.20% | |||
Number of secured loans with a filed notice of default | MortgageLoan | 2 | 37 | 47 | ||
Secured loans in foreclosure - principal (in Dollars) | $ 2,939,000 | ||||
Prepaid interest | $ 121,000 | ||||
Minimum [Member] | |||||
Secured Loan Transactions [Line Items] | |||||
Secured loans - interest rate (fixed) | 5.00% | 5.00% | |||
Maximum [Member] | |||||
Secured Loan Transactions [Line Items] | |||||
Secured loans - interest rate (fixed) | 10.80% | 10.80% | |||
Filed Notice of Default [Member] | |||||
Secured Loan Transactions [Line Items] | |||||
Number of secured loans with a filed notice of default | MortgageLoan | 1 | ||||
Prepaid Interest [Member] | |||||
Secured Loan Transactions [Line Items] | |||||
Number of secured loans with a filed notice of default | MortgageLoan | 2 |
Loans - Secured Loans by Lien P
Loans - Secured Loans by Lien Position in the Collateral (Details) $ in Thousands | 1 Months Ended | 9 Months Ended | 12 Months Ended | |||
Jun. 30, 2020USD ($)MortgageLoan | Sep. 30, 2020USD ($)MortgageLoan | Dec. 31, 2019USD ($)MortgageLoan | Jul. 31, 2020USD ($) | Oct. 01, 2019USD ($) | ||
Loans Details - Secured Loans by Lien Position in the Collateral [Line Items] | ||||||
Secured loans, principal | $ 77,895 | $ 74,970 | $ 86,203 | $ 5,380,000 | $ 5,355,000 | |
Liens due other lenders at loan closing (in Dollars) | 16,136 | 29,817 | ||||
Total debt (in Dollars) | 91,106 | 116,020 | ||||
Appraised property value at loan closing (in Dollars) | $ 185,725 | $ 226,185 | ||||
Percent of total debt to appraised values (LTV) at loan closing | [1] | 54.00% | 55.10% | |||
Loans - percent | 100.00% | 100.00% | ||||
Number of secured loans | MortgageLoan | 2 | 37 | 47 | |||
First Trust Deeds [Member] | ||||||
Loans Details - Secured Loans by Lien Position in the Collateral [Line Items] | ||||||
Secured loans, principal | $ 68,029 | $ 72,621 | ||||
Loans - percent | 91.00% | 84.00% | ||||
Number of secured loans | MortgageLoan | 27 | 31 | ||||
Second Trust Deeds [Member] | ||||||
Loans Details - Secured Loans by Lien Position in the Collateral [Line Items] | ||||||
Secured loans, principal | $ 6,941 | $ 13,582 | ||||
Loans - percent | 9.00% | 16.00% | ||||
Number of secured loans | MortgageLoan | 10 | 16 | ||||
[1] | Based on appraised values and liens due other lenders at loan closing. The weighted-average loan-to-value (LTV) computation above does not take into account subsequent increases or decreases in property values following the loan closing, nor does it include decreases or increases on senior liens to other lenders. |
Loans - Secured Loans by Proper
Loans - Secured Loans by Property Type (Details) $ in Thousands | 1 Months Ended | 9 Months Ended | 12 Months Ended | |||
Jun. 30, 2020USD ($)MortgageLoan | Sep. 30, 2020USD ($)MortgageLoan | Dec. 31, 2019USD ($)MortgageLoan | Jul. 31, 2020USD ($) | Oct. 01, 2019USD ($) | ||
Loans (Details) - Secured Loans by Property Type [Line Items] | ||||||
Number of secured loans | MortgageLoan | 2 | 37 | 47 | |||
Secured loans, principal | $ | $ 77,895 | $ 74,970 | $ 86,203 | $ 5,380,000 | $ 5,355,000 | |
Loans - percent | 100.00% | 100.00% | ||||
Single Family [Member] | ||||||
Loans (Details) - Secured Loans by Property Type [Line Items] | ||||||
Number of secured loans | MortgageLoan | [1] | 21 | 32 | |||
Secured loans, principal | $ | [1] | $ 17,742 | $ 30,629 | |||
Loans - percent | [1] | 24.00% | 36.00% | |||
Multi-family [Member] | ||||||
Loans (Details) - Secured Loans by Property Type [Line Items] | ||||||
Number of secured loans | MortgageLoan | 2 | 2 | ||||
Secured loans, principal | $ | $ 7,068 | $ 7,072 | ||||
Loans - percent | 9.00% | 7.00% | ||||
Commercial [Member] | ||||||
Loans (Details) - Secured Loans by Property Type [Line Items] | ||||||
Number of secured loans | MortgageLoan | 12 | 12 | ||||
Secured loans, principal | $ | $ 48,275 | $ 48,117 | ||||
Loans - percent | 64.00% | 56.00% | ||||
Land [Member] | ||||||
Loans (Details) - Secured Loans by Property Type [Line Items] | ||||||
Number of secured loans | MortgageLoan | 2 | 1 | ||||
Secured loans, principal | $ | $ 1,885 | $ 385 | ||||
Loans - percent | 3.00% | 1.00% | ||||
[1] | Single family properties include owner-occupied and non-owner occupied 1-4 unit residential buildings, condominium units, townhouses, and condominium complexes. The single family property type as of September 30, 2020 consists of 9 loans with principal of approximately $4,527,000 that are owner occupied and 12 loans with principal of approximately $13,215,000 that are non-owner occupied. Single family property type at December 31, 2019 consisted of 12 loans with principal of approximately $7,642,000 that are owner occupied and 20 loans with principal of approximately $22,987,000 that are non-owner occupied. |
Loans - Secured Loans by Prop_2
Loans - Secured Loans by Property Type (Parenthetical) (Details) | 1 Months Ended | 9 Months Ended | 12 Months Ended | ||
Jun. 30, 2020USD ($)MortgageLoan | Sep. 30, 2020USD ($)MortgageLoan | Dec. 31, 2019USD ($)MortgageLoan | Jul. 31, 2020USD ($) | Oct. 01, 2019USD ($) | |
Loans Details [Line Items] | |||||
Number of secured loans | MortgageLoan | 2 | 37 | 47 | ||
Secured loans, principal | $ | $ 77,895,000 | $ 74,970,000 | $ 86,203,000 | $ 5,380,000,000 | $ 5,355,000,000 |
Single Family Property-Owner Occupied [Member] | |||||
Loans Details [Line Items] | |||||
Number of secured loans | MortgageLoan | 9 | 12 | |||
Secured loans, principal | $ | $ 4,527,000 | $ 7,642,000 | |||
Single Family Property-NonOwner Occupied [Member] | |||||
Loans Details [Line Items] | |||||
Number of secured loans | MortgageLoan | 12 | 20 | |||
Secured loans, principal | $ | $ 13,215,000 | $ 22,987,000 |
Loans - Secured Loans Distribut
Loans - Secured Loans Distributed within California (Details) - USD ($) $ in Thousands | Sep. 30, 2020 | Jul. 31, 2020 | Jun. 30, 2020 | Dec. 31, 2019 | Oct. 01, 2019 | |
Loans (Details) - Secured Loans by Property Type [Line Items] | ||||||
Secured loans, principal | $ 74,970 | $ 5,380,000 | $ 77,895 | $ 86,203 | $ 5,355,000 | |
Loans - percent | 100.00% | 100.00% | ||||
San Francisco [Member] | ||||||
Loans (Details) - Secured Loans by Property Type [Line Items] | ||||||
Secured loans, principal | $ 31,244 | $ 32,908 | ||||
Loans - percent | 41.70% | 38.20% | ||||
San Mateo [Member] | ||||||
Loans (Details) - Secured Loans by Property Type [Line Items] | ||||||
Secured loans, principal | $ 17,148 | $ 17,221 | ||||
Loans - percent | 22.90% | 20.00% | ||||
Santa Clara [Member] | ||||||
Loans (Details) - Secured Loans by Property Type [Line Items] | ||||||
Secured loans, principal | $ 1,600 | $ 6,281 | ||||
Loans - percent | 2.10% | 7.30% | ||||
Alameda [Member] | ||||||
Loans (Details) - Secured Loans by Property Type [Line Items] | ||||||
Secured loans, principal | $ 2,874 | $ 3,349 | ||||
Loans - percent | 3.80% | 3.90% | ||||
Napa [Member] | ||||||
Loans (Details) - Secured Loans by Property Type [Line Items] | ||||||
Secured loans, principal | $ 548 | |||||
Loans - percent | 0.60% | |||||
Contra Costa [Member] | ||||||
Loans (Details) - Secured Loans by Property Type [Line Items] | ||||||
Secured loans, principal | $ 303 | $ 308 | ||||
Loans - percent | 0.40% | 0.30% | ||||
Marin [Member] | ||||||
Loans (Details) - Secured Loans by Property Type [Line Items] | ||||||
Secured loans, principal | $ 179 | $ 513 | ||||
Loans - percent | 0.20% | 0.60% | ||||
San Francisco Bay Area [Member] | ||||||
Loans (Details) - Secured Loans by Property Type [Line Items] | ||||||
Secured loans, principal | [1] | $ 53,348 | $ 61,128 | |||
Loans - percent | [1] | 71.10% | 70.90% | |||
Placer [Member] | ||||||
Loans (Details) - Secured Loans by Property Type [Line Items] | ||||||
Secured loans, principal | $ 1,500 | |||||
Loans - percent | 2.00% | |||||
Santa Cruz [Member] | ||||||
Loans (Details) - Secured Loans by Property Type [Line Items] | ||||||
Secured loans, principal | $ 511 | $ 1,376 | ||||
Loans - percent | 0.70% | 1.60% | ||||
Stanislaus | ||||||
Loans (Details) - Secured Loans by Property Type [Line Items] | ||||||
Secured loans, principal | $ 555 | |||||
Loans - percent | 0.70% | |||||
Amador [Member] | ||||||
Loans (Details) - Secured Loans by Property Type [Line Items] | ||||||
Secured loans, principal | $ 706 | $ 719 | ||||
Loans - percent | 0.90% | 0.80% | ||||
Mariposa [Member] | ||||||
Loans (Details) - Secured Loans by Property Type [Line Items] | ||||||
Secured loans, principal | $ 47 | $ 51 | ||||
Loans - percent | 0.10% | 0.10% | ||||
Monterey [Member] | ||||||
Loans (Details) - Secured Loans by Property Type [Line Items] | ||||||
Secured loans, principal | $ 193 | |||||
Loans - percent | 0.20% | |||||
Other Northern California [Member] | ||||||
Loans (Details) - Secured Loans by Property Type [Line Items] | ||||||
Secured loans, principal | $ 3,319 | $ 2,339 | ||||
Loans - percent | 4.40% | 2.70% | ||||
Northern California [Member] | ||||||
Loans (Details) - Secured Loans by Property Type [Line Items] | ||||||
Secured loans, principal | $ 56,667 | $ 63,467 | ||||
Loans - percent | 75.50% | 73.60% | ||||
Los Angeles [Member] | ||||||
Loans (Details) - Secured Loans by Property Type [Line Items] | ||||||
Secured loans, principal | $ 10,205 | $ 14,623 | ||||
Loans - percent | 13.60% | 17.00% | ||||
Santa Barbara [Member] | ||||||
Loans (Details) - Secured Loans by Property Type [Line Items] | ||||||
Secured loans, principal | $ 2,074 | $ 2,085 | ||||
Loans - percent | 2.80% | 2.40% | ||||
Orange [Member] | ||||||
Loans (Details) - Secured Loans by Property Type [Line Items] | ||||||
Secured loans, principal | $ 644 | $ 648 | ||||
Loans - percent | 0.90% | 0.80% | ||||
Los Angeles And Coastal [Member] | ||||||
Loans (Details) - Secured Loans by Property Type [Line Items] | ||||||
Secured loans, principal | $ 12,923 | $ 17,356 | ||||
Loans - percent | 17.30% | 20.20% | ||||
San Bernardino [Member] | ||||||
Loans (Details) - Secured Loans by Property Type [Line Items] | ||||||
Secured loans, principal | $ 5,380 | $ 5,380 | ||||
Loans - percent | 7.20% | 6.20% | ||||
Other Southern California [Member] | ||||||
Loans (Details) - Secured Loans by Property Type [Line Items] | ||||||
Secured loans, principal | $ 5,380 | $ 5,380 | ||||
Loans - percent | 7.20% | 6.20% | ||||
Southern California [Member] | ||||||
Loans (Details) - Secured Loans by Property Type [Line Items] | ||||||
Secured loans, principal | $ 18,303 | $ 22,736 | ||||
Loans - percent | 24.50% | 26.40% | ||||
[1] | Includes the Silicon Valley |
Loans - Secured Loans Scheduled
Loans - Secured Loans Scheduled Maturities (Details) $ in Thousands | Sep. 30, 2020USD ($)Loan | Jul. 31, 2020USD ($)Loan | Jun. 30, 2020USD ($) | Dec. 31, 2019USD ($)Loan | Oct. 01, 2019USD ($)Loan | |
Receivables [Abstract] | ||||||
2020, Loan | Loan | [1] | 4 | ||||
2021, Loan | Loan | [2] | 20 | ||||
2022, Loan | Loan | 6 | |||||
2023, Loan | Loan | 2 | |||||
2024, Loan | Loan | 2 | |||||
Total scheduled maturities, Loan | Loan | 34 | 1 | 1 | |||
Matured as of June 30, 2020, Loan | Loan | 3 | |||||
Total principal, secured loans, Loan | Loan | 37 | 47 | ||||
2020, Principal | $ | [1] | $ 21,273 | ||||
2021, Principal | $ | [2] | 34,643 | ||||
2022, Principal | $ | 5,461 | |||||
2023, Principal | $ | 3,802 | |||||
2024, Principal | $ | 1,106 | |||||
Total scheduled maturities, Principal | $ | 66,285 | |||||
Matured as of June 30, 2020, Principal | $ | 8,685 | |||||
Total principal, secured loans, Principal | $ | $ 74,970 | $ 5,380,000 | $ 77,895 | $ 86,203 | $ 5,355,000 | |
2020, Percent | [1] | 28.00% | ||||
2021, Percent | [2] | 46.00% | ||||
2022, Percent | 7.00% | |||||
2023, Percent | 5.00% | |||||
2024, Percent | 2.00% | |||||
Total scheduled maturities, Percent | 88.00% | |||||
Matured as of June 30, 2020, Percent | 12.00% | |||||
Total principal, secured loans, Percent | 100.00% | |||||
[1] | Loans scheduled to mature in 2020 after September 30. Includes one loan with principal of approximately $5,380,000 which matured July 1, 2020. The partnership entered into a forbearance agreement with the borrower in September 2020 which deferred the maturity date until December 1, 2020. | |||||
[2] | Includes one loan with principal of approximately $5,355,000 which matured October 1, 2019. The partnership entered into a forbearance agreement with the borrower in June 2020 which deferred the maturity date until January 1, 2021. |
Loans - Secured Loans Schedul_2
Loans - Secured Loans Scheduled Maturities (Parenthetical) (Details) $ in Thousands | Jul. 31, 2020USD ($)Loan | Oct. 01, 2019USD ($)Loan | Jun. 30, 2020USD ($) | Sep. 30, 2020USD ($)Loan | Dec. 31, 2019USD ($) |
Receivables [Abstract] | |||||
Loans receivable maturity date | Jul. 1, 2020 | Oct. 1, 2019 | |||
Number of secured loans | Loan | 1 | 1 | 34 | ||
Principal, secured loans | $ | $ 5,380,000 | $ 5,355,000 | $ 77,895 | $ 74,970 | $ 86,203 |
Loans Receivable Defer Maturity Date | Dec. 1, 2020 | Jan. 1, 2021 | Jan. 1, 2021 | Dec. 1, 2020 |
Loans - Secured Loans Summarize
Loans - Secured Loans Summarized by Payment Delinquency (Details) $ in Thousands | Sep. 30, 2020USD ($)MortgageLoan | Jul. 31, 2020USD ($) | Jun. 30, 2020USD ($) | Dec. 31, 2019USD ($)MortgageLoan | Oct. 01, 2019USD ($) |
Loans (Details) - Secured Loans by Property Type [Line Items] | |||||
Delinquent loans, number | MortgageLoan | 37 | 47 | |||
Past Due | |||||
Principal | $ | $ 74,970 | $ 5,380,000 | $ 77,895 | $ 86,203 | $ 5,355,000 |
Current [Member] | |||||
Loans (Details) - Secured Loans by Property Type [Line Items] | |||||
Delinquent loans, number | MortgageLoan | 31 | 43 | |||
Past Due | |||||
Principal | $ | $ 47,554 | $ 73,893 | |||
Past Due 30-89 Days [Member] | |||||
Loans (Details) - Secured Loans by Property Type [Line Items] | |||||
Delinquent loans, number | MortgageLoan | 1 | ||||
Past Due | |||||
Principal | $ | $ 7,996 | ||||
Past Due 90-179 Days [Member] | |||||
Loans (Details) - Secured Loans by Property Type [Line Items] | |||||
Delinquent loans, number | MortgageLoan | 1 | 1 | |||
Past Due | |||||
Principal | $ | $ 3,896 | $ 5,355 | |||
Past Due 180 Days or More [Member] | |||||
Loans (Details) - Secured Loans by Property Type [Line Items] | |||||
Delinquent loans, number | MortgageLoan | 4 | 3 | |||
Past Due | |||||
Principal | $ | $ 15,524 | $ 6,955 | |||
Past Due [Member] | |||||
Loans (Details) - Secured Loans by Property Type [Line Items] | |||||
Delinquent loans, number | MortgageLoan | 6 | 4 | |||
Past Due | |||||
Principal | $ | $ 27,416 | $ 12,310 |
Loans - Schedule of Payments in
Loans - Schedule of Payments in Arrears Past Due Financing Receivables (Details) | Sep. 30, 2020USD ($)Loan | Dec. 31, 2019USD ($)Loan | |||
30-89 days (1-3 payments) [Member] | |||||
Loans (Details) - Secured Loans by Property Type [Line Items] | |||||
Number of monthly payments | Loan | 1 | ||||
Monthly payments, interest | [1] | $ 39,000 | |||
Total payments | $ 39,000 | ||||
90-179 days (4-6 payments) | |||||
Loans (Details) - Secured Loans by Property Type [Line Items] | |||||
Number of loans | Loan | 1 | ||||
Past maturity, principal | $ 3,896,000 | ||||
Total payments | $ 3,896,000 | ||||
180 or more days (more than 6 payments) | |||||
Loans (Details) - Secured Loans by Property Type [Line Items] | |||||
Number of loans | Loan | 4 | [2] | 3 | ||
Past maturity, principal | $ 15,524,000 | [2] | $ 6,955,000 | ||
Past maturity, interest | 726,000 | [1],[2] | 394,000 | [3] | |
Total payments | $ 16,250,000 | [2] | $ 7,349,000 | ||
Total Payments Past Due | |||||
Loans (Details) - Secured Loans by Property Type [Line Items] | |||||
Number of loans | Loan | 5 | [4] | 4 | ||
Number of monthly payments | Loan | [4] | 1 | |||
Past maturity, principal | $ 19,420,000 | [4] | $ 12,310,000 | ||
Past maturity, interest | 726,000 | [1],[4] | 470,000 | [3] | |
Monthly payments, interest | [1],[4] | 39,000 | |||
Total payments | $ 20,185,000 | [4] | $ 12,780,000 | ||
90-179 days (3-5 payments) [Member] | |||||
Loans (Details) - Secured Loans by Property Type [Line Items] | |||||
Number of loans | Loan | 1 | ||||
Past maturity, principal | $ 5,355,000 | ||||
Past maturity, interest | [3] | 76,000 | |||
Total payments | $ 5,431,000 | ||||
[1] | Interest includes foregone interest of $311,946 on non-accrual loans past maturity. September 2020 interest is due on October 1, 2020 and is not included in the payments in arrears at September 30, 2020. | ||||
[2] | Two loans, with an aggregate principal balance of approximately $10,735,000, included in past maturity payments (principal and interest) 180 or more days, had forbearance agreements in place at September 30, 2020. See the disclosure above for a discussion of the terms of the forbearance agreements. | ||||
[3] | Interest includes foregone interest of approximately $243,000 on non-accrual loans past maturity. December 2019 interest was due on January 1, 2020 and is not included in the payments in arrears at December 31, 2019 | ||||
[4] | Included in the table above is one loan past maturity with principal of approximately $3,896,000 and an original maturity date of July 1, 2020. The borrower continued to make monthly payments past the original maturity date, and in October 2020, the maturity date was extended by two years to July 1, 2022. |
Loans - Schedule of Payments _2
Loans - Schedule of Payments in Arrears Past Due Financing Receivables (Parenthetical) (Details) | Jul. 31, 2020 | Oct. 01, 2019 | Oct. 31, 2020 | Sep. 30, 2020USD ($)Loan | Dec. 31, 2019USD ($)Loan | |
Financing Receivable Recorded Investment Past Due [Line Items] | ||||||
Foregone interest | $ 140,000 | |||||
Loans receivable maturity date | Jul. 1, 2020 | Oct. 1, 2019 | ||||
180 or more days (more than 6 payments) | ||||||
Financing Receivable Recorded Investment Past Due [Line Items] | ||||||
Foregone interest | $ 311,946 | $ 243,000 | ||||
Interest, Due Date | Oct. 1, 2020 | Jan. 1, 2020 | ||||
Principal | $ 16,250,000 | [1] | $ 7,349,000 | |||
Number of loans | Loan | 4 | [1] | 3 | |||
Past maturity, principal | $ 15,524,000 | [1] | $ 6,955,000 | |||
180 or more days (more than 6 payments) | Forbearance Agreement [Member] | ||||||
Financing Receivable Recorded Investment Past Due [Line Items] | ||||||
Principal | $ 10,735,000,000 | |||||
Number of loans | Loan | 2 | |||||
90-179 days (4-6 payments) | ||||||
Financing Receivable Recorded Investment Past Due [Line Items] | ||||||
Principal | $ 3,896,000 | |||||
Number of loans | Loan | 1 | |||||
Past maturity, principal | $ 3,896,000 | |||||
Loans receivable maturity date | Jul. 1, 2020 | |||||
90-179 days (4-6 payments) | Subsequent Event | ||||||
Financing Receivable Recorded Investment Past Due [Line Items] | ||||||
Loans receivable maturity date | Jul. 1, 2022 | |||||
[1] | Two loans, with an aggregate principal balance of approximately $10,735,000, included in past maturity payments (principal and interest) 180 or more days, had forbearance agreements in place at September 30, 2020. See the disclosure above for a discussion of the terms of the forbearance agreements. |
Loans - Secured Loans in Non-Ac
Loans - Secured Loans in Non-Accrual Status (Details) | 1 Months Ended | 9 Months Ended | 12 Months Ended | ||
Jun. 30, 2020USD ($)MortgageLoan | Sep. 30, 2020USD ($)MortgageLoan | Dec. 31, 2019USD ($)MortgageLoan | Jul. 31, 2020USD ($) | Oct. 01, 2019USD ($) | |
Loans Details Secured Loans In Nonaccrual Status [Line Items] | |||||
Number of secured loans | MortgageLoan | 2 | 37 | 47 | ||
Secured loans, principal | $ 77,895,000 | $ 74,970,000 | $ 86,203,000 | $ 5,380,000,000 | $ 5,355,000,000 |
Accrued interest | 968,000 | $ 711,000 | |||
Foregone interest | $ 140,000 | ||||
Non-accrual Status [Member] | |||||
Loans Details Secured Loans In Nonaccrual Status [Line Items] | |||||
Number of secured loans | MortgageLoan | 4 | 3 | |||
Secured loans, principal | $ 15,998,000 | $ 7,164,000 | |||
Accrued interest | 451,000 | 184,000 | |||
Foregone interest | 384,000 | 298,000 | |||
Principal [Member] | Non-accrual Status [Member] | |||||
Loans Details Secured Loans In Nonaccrual Status [Line Items] | |||||
Secured loans, principal | 15,524,000 | 6,955,000 | |||
Advances [Member] | Non-accrual Status [Member] | |||||
Loans Details Secured Loans In Nonaccrual Status [Line Items] | |||||
Secured loans, principal | $ 23,000 | $ 25,000 |
Loans - Secured Loans Designate
Loans - Secured Loans Designated as Impaired Loans (Details) $ in Thousands | 9 Months Ended | 12 Months Ended | |
Sep. 30, 2020USD ($)Loan | Dec. 31, 2019USD ($)Loan | ||
Secured Loans Designated as Impaired Loans [Abstract] | |||
Principal | $ 15,524 | $ 12,310 | |
Recorded investment | [1] | 15,998 | 12,931 |
Impaired loans without allowance | $ 15,998 | $ 12,931 | |
Number of Loans | Loan | 4 | 4 | |
Loan to value ratios | 52.50% | 68.00% | |
[1] | Recorded investment is the sum of principal, advances, and accrued interest for financial reporting purposes. |
Loans - Impaired Loans - Averag
Loans - Impaired Loans - Average Balances and Interest Income (Details) - USD ($) $ in Thousands | 9 Months Ended | 12 Months Ended |
Sep. 30, 2020 | Dec. 31, 2019 | |
Impaired Loans - Average Balances and Interest Income [Abstract] | ||
Average recorded investment | $ 12,078 | $ 8,160 |
Interest income recognized | 631 | 298 |
Interest income received in cash | $ 368 | $ 284 |
Real Estate Owned (REO) - Summa
Real Estate Owned (REO) - Summary of REO Transactions and Valuation Adjustments (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended |
Sep. 30, 2020 | Sep. 30, 2020 | |
Real Estate Owned REO Details [Line Items] | ||
Balance, beginning of period | $ 3,252 | |
Valuation allowance, balance, beginning of period | $ (3,239) | (3,239) |
Balance, end of period | 8,922 | 8,922 |
Valuation allowance, Balance, end of period | (3,239) | (3,239) |
REO [Member] | ||
Real Estate Owned REO Details [Line Items] | ||
Balance, beginning of period | 12,161 | 6,491 |
Acquisitions from foreclosure | 5,787 | |
Dispositions | (117) | |
Balance, end of period | 12,161 | 12,161 |
REO, Net [Member] | ||
Real Estate Owned REO Details [Line Items] | ||
Balance, beginning of period | 8,922 | 3,252 |
Acquisitions from foreclosure | 5,787 | |
Dispositions | (117) | |
Balance, end of period | $ 8,922 | $ 8,922 |
Real Estate Owned (REO) - Addit
Real Estate Owned (REO) - Additional Information (Details) | 1 Months Ended | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||
Jun. 30, 2020USD ($)MortgageLoanProperty | Sep. 30, 2020USD ($)aft²Property | Sep. 30, 2019USD ($) | Sep. 30, 2020USD ($)aft²MortgageLoanProperty | Sep. 30, 2019USD ($) | Dec. 31, 2019USD ($)MortgageLoan | |
Real Estate Owned REO Details [Line Items] | ||||||
Real estate owned (REO), net | $ 8,922,000 | $ 8,922,000 | $ 3,252,000 | |||
REO - sales proceeds, net | 186,000 | |||||
Valuation allowance adjustments | $ 0 | |||||
Number of mortgage | MortgageLoan | 2 | 37 | 47 | |||
Principal due | $ 2,449,000 | |||||
Noncash or Part Noncash Acquisition, Other Assets Acquired | $ 175,000,000 | |||||
Number of days for foreclosure sales | 201 days | 242 days | ||||
Interest in arrears | 34,000 | $ 34,000 | ||||
Delinquent property taxes | 17,000 | |||||
Occupancy rents received | 13,000 | $ 15,000 | 42,000 | $ 45,000 | ||
Sign and storage rents received | 11,000 | $ 43,000 | 34,000 | $ 51,000 | ||
Accounts Payable [Member] | ||||||
Real Estate Owned REO Details [Line Items] | ||||||
Interest in arrears | 33,000,000 | 33,000,000 | $ 40,000,000 | |||
Delinquent property taxes | 23,000,000 | $ 47,000,000 | ||||
Partnership Property Held For Sale [Member] | ||||||
Real Estate Owned REO Details [Line Items] | ||||||
Real estate owned (REO), net | $ 8,922,000 | $ 8,922,000 | ||||
Number of real estate properties | Property | 5 | 5 | ||||
Los Angeles County [Member] | ||||||
Real Estate Owned REO Details [Line Items] | ||||||
Number of units in real estate property | Property | 2 | |||||
Los Angeles County [Member] | Partnership Property Held For Sale [Member] | ||||||
Real Estate Owned REO Details [Line Items] | ||||||
Real estate owned (REO), net | $ 5,787,000 | $ 5,787,000 | ||||
Los Angeles County [Member] | Family Residence [Member] | ||||||
Real Estate Owned REO Details [Line Items] | ||||||
Number of units in real estate property | Property | 2 | 2 | ||||
Los Angeles County [Member] | Family Residence [Member] | Large Parcel [Member] | ||||||
Real Estate Owned REO Details [Line Items] | ||||||
Area of real estate property | a | 0.31 | 0.31 | ||||
Los Angeles County [Member] | Family Residence [Member] | Residence [Member] | ||||||
Real Estate Owned REO Details [Line Items] | ||||||
Area of real estate property | ft² | 5,200 | 5,200 | ||||
Los Angeles County [Member] | Family Residence [Member] | Other Parcel [Member] | ||||||
Real Estate Owned REO Details [Line Items] | ||||||
Area of real estate property | a | 0.12 | 0.12 | ||||
Los Angeles County [Member] | Family Residence [Member] | Other Residence [Member] | ||||||
Real Estate Owned REO Details [Line Items] | ||||||
Area of real estate property | ft² | 3,100 | 3,100 | ||||
San Francisco County [Member] | Condominium Complex [Member] | ||||||
Real Estate Owned REO Details [Line Items] | ||||||
REO - sales proceeds, net | $ 186,000 | |||||
Gains (Losses) on Sales of Other Real Estate | $ 68,000 | |||||
San Francisco County [Member] | Condominium Complex [Member] | Partnership Property Held For Sale [Member] | ||||||
Real Estate Owned REO Details [Line Items] | ||||||
Number of real estate properties | Property | 2 | 2 | ||||
San Francisco County [Member] | Condominium Complex [Member] | Sold [Member] | ||||||
Real Estate Owned REO Details [Line Items] | ||||||
Number of units in real estate property | Property | 1 | 1 | ||||
Fresno County California [Member] | Home Subdivision [Member] | Partnership Property Held For Sale [Member] | ||||||
Real Estate Owned REO Details [Line Items] | ||||||
Number of units in real estate property | Property | 1 | 1 | ||||
Stanislaus County [Member] | Commercial Property [Member] | Partnership Property Held For Sale [Member] | ||||||
Real Estate Owned REO Details [Line Items] | ||||||
Area of real estate property | a | 14 | 14 |
Real Estate Owned (REO) - Sched
Real Estate Owned (REO) - Schedule of Mortgages Payable (Details) $ in Thousands | Sep. 30, 2020USD ($) |
Real Estate [Line Items] | |
Total mortgages payable | $ 2,449 |
Wells Fargo Bank [Member] | |
Real Estate [Line Items] | |
Total mortgages payable | 1,453 |
East West Bank [Member] | |
Real Estate [Line Items] | |
Total mortgages payable | $ 996 |
Real Estate Owned (REO) - Sum_2
Real Estate Owned (REO) - Summary of REO, Net (Detail) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Real Estate [Abstract] | ||||
Holding costs, net of other income | $ 51 | $ (23) | $ 91 | $ 39 |
(Gains)/losses on sales | (68) | |||
Valuation adjustments | 210 | 210 | ||
REO, net | $ 51 | $ 187 | $ 23 | $ 249 |
Line of Credit - Schedule of Ac
Line of Credit - Schedule of Activity Involving Line of Credit (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended |
Sep. 30, 2020 | Sep. 30, 2020 | |
Debt Disclosure [Abstract] | ||
Draws | $ 1,515 | $ 1,515 |
Balance September 30, 2020 | 1,515 | 1,515 |
Line of credit - average daily balance beginning September 28, 2020 | $ 1,515 | $ 1,515 |
Line of Credit - Additional Inf
Line of Credit - Additional Information (Details) - USD ($) | Sep. 28, 2020 | Sep. 30, 2020 | Sep. 30, 2020 | Sep. 30, 2020 |
Line Of Credit Facility [Line Items] | ||||
Line of credit facility drawn | $ 1,515,000 | $ 1,515,000 | ||
Interest expense | $ 41,000 | $ 61,000 | ||
Amortization of debt issuance costs | 27,000 | |||
Revolving Credit Facility [Member] | ||||
Line Of Credit Facility [Line Items] | ||||
Line of credit facility, maximum amount outstanding during period | $ 10,000,000 | |||
Agreement maturity date | Mar. 13, 2022 | |||
Line of credit facility, description | The partnership has the option at the maturity date to convert the then outstanding principal balance on the line of credit to a one-year term loan - for a fee of one-quarter of one percent (0.25%) – thereby extending the maturity date to March 13, 2023 | |||
Line of credit facility, conversion of outstanding principal balance to term loan of fee | 0.25% | |||
Maturity date extended | Mar. 13, 2023 | |||
Line of credit facility drawn | $ 1,515,000 | |||
Line of credit facility, interest rate description | per annum rate of the greater of (i) five percent (5%) or (ii) the sum of the one-month LIBOR rate plus three and one-quarter percent (3.25%). | |||
Line of credit facility, interest rate | 5.00% | 5.00% | 5.00% | |
Interest rate, increase (decrease) | 0.25% | |||
Line of credit facility, unused line of fee | 0.50% | |||
Line of Credit Facility, Commitment Fee Description | , there is a quarterly unused line fee equal to one-half of one percent (0.50%) per annum of the average daily difference between the principal outstanding and fifty percent (50%) of the maximum principal of $10 million ($5,000,000). The bank, at its sole discretion, elected to waive the unused line of credit fee for the quarter ended September 30, 2020. | |||
Interest expense | $ 13,000,000 | $ 27,000,000 | ||
Amortization of debt issuance costs | $ 108,000,000 | |||
Revolving Credit Facility [Member] | London Interbank Offered Rate (LIBOR) [Member] | ||||
Line Of Credit Facility [Line Items] | ||||
Line of credit facility, interest rate | 3.25% | 3.25% | 3.25% | |
Revolving Credit Facility [Member] | Minimum [Member] | ||||
Line Of Credit Facility [Line Items] | ||||
Minimum compensating balance amount | $ 1,000,000 | $ 1,000,000 | $ 1,000,000 | |
Revolving Credit Facility [Member] | Maximum [Member] | ||||
Line Of Credit Facility [Line Items] | ||||
Line of credit facility, average rate | 50.00% | |||
Line Of Credit [Member] | ||||
Line Of Credit Facility [Line Items] | ||||
Minimum tangible net worth | $ 50,000,000 | $ 50,000,000 | $ 50,000,000 | |
Debt instrument, covenant description | RMI VIII shall maintain (i) minimum tangible net worth of $50 million, net of amounts due from related companies; (ii) debt service coverage ratio at all times of not less than 2.00 to 1.00 | |||
Line Of Credit [Member] | Minimum [Member] | ||||
Line Of Credit Facility [Line Items] | ||||
Debt service coverage ratio | 1 | |||
Line Of Credit [Member] | Maximum [Member] | ||||
Line Of Credit Facility [Line Items] | ||||
Debt service coverage ratio | 2 | |||
Line Of Credit [Member] | Maximum [Member] | Financial Asset, 61 Days Past Due [Member] | ||||
Line Of Credit Facility [Line Items] | ||||
Delinquency rate | 10.00% |
Commitment and Contingencies, O
Commitment and Contingencies, Other Than Loan and REO Commitments - Scheduled Capital Account Withdrawal Requests (Details) $ in Thousands | Sep. 30, 2020USD ($) |
Partners Capital Account Withdrawals [Abstract] | |
2020 | $ 3,875 |
2021 | 12,379 |
2022 | 8,584 |
2023 | 5,659 |
2024 | 2,773 |
Thereafter | 595 |
Total | $ 33,865 |
Subsequent Events - Additional
Subsequent Events - Additional Information (Details) | Oct. 30, 2020USD ($) | Oct. 19, 2020USD ($)Loan | Sep. 30, 2020USD ($)Loan | Sep. 30, 2019Loan |
Subsequent Event [Line Items] | ||||
Number of performing loans | Loan | 1 | 0 | ||
Loans held for sale, principal | $ 2,331,000 | |||
Subsequent Event | ||||
Subsequent Event [Line Items] | ||||
LentAmount | $ 800,000,000 | |||
Number of performing loans | Loan | 5 | |||
Loans held for sale, principal | $ 7,535,000,000 | |||
Repaid Promissory Notes Principal Amount | $ 800,000,000 | |||
Interest Paid | $ 1,831,000 |