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Mortgage Loans Held For Investment And Related Assets | 9 Months Ended
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Jan. 31, 2012
Mortgage Loans Held For Investment And Related Assets [Abstract] |
Mortgage Loans Held For Investment And Related Assets | 4. Mortgage Loans Held for Investment and Related Assets The composition of our mortgage loan portfolio as of January 31, 2012 and April 30, 2011 is as follows:
|  | (dollars in 000s)
| January 31, 2012 | April 30, 2011
As of | Amount | % of Total | Amount | % of Total
Adjustable-rate loans | $ 297,375 | 58 % | $ 333,828 | 58 %
Fixed-rate loans | 219,134 | 42 % | 239,146 | 42 %
| 516,509 | 100 % | 572,974 | 100 %
Unamortized deferred fees and costs | 3,629 |  | 4,121 |
Less: Allowance for loan losses | (89,949 ) |  | (92,087 ) |
| $ 430,189 |  | $ 485,008 |
Our loan loss allowance as a percent of mortgage loans was 17.4% at January 31, 2012, compared to 16.1% at April 30, 2011. Activity in the allowance for loan losses for the nine months ended January 31, 2012 and 2011 is as follows:
|  | (in 000s)
Nine months ended January 31, | 2012 | 2011
Balance, beginning of the period | $ 92,087 | $ 93,535
Provision | 17,275 | 24,100
Recoveries | 160 | 169
Charge-offs | (19,573 ) | (29,928 )
Balance, end of the period | $ 89,949 | $ 87,876
When determining our allowance for loan losses, we evaluate loans less than 60 days past due on a pooled basis, while loans we consider impaired, including those loans more than 60 days past due or modified as troubled debt restructurings (TDRs), are evaluated individually. The balance of these loans and the related allowance is as follows:
|  |  |  | (in 000s)
| January 31, 2012 | April 30, 2011
As of | Portfolio Balance | Related Allowance | Portfolio Balance | Related Allowance
Pooled (less than 60 days past due) | $ 260,916 | $ 9,467 | $ 304,325 | $ 11,238
Impaired: |  |  |  |
Individually (TDRs) | 84,443 | 9,011 | 106,328 | 11,056
Individually (60 days or more past due) | 171,150 | 71,471 | 162,321 | 69,793
| $ 516,509 | $ 89,949 | $ 572,974 | $ 92,087
Our portfolio includes loans originated by Sand Canyon Corporation, previously known as Option One Mortgage Corporation, and its subsidiaries (SCC) and purchased by H&R Block Bank (HRB Bank), which constitute 63% of the total loan portfolio at January 31, 2012. We have experienced higher rates of delinquency and believe that we have greater exposure to loss with respect to this segment of our loan portfolio. Our remaining loan portfolio totaled $192.4 million and is characteristic of a prime loan portfolio, and we believe therefore subject to a lower loss exposure. Detail of our mortgage loans held for investment and the related allowance at January 31, 2012 is as follows:
|  |  |  | (dollars in 000s)
| Outstanding | Loan Loss Allowance | % 30+ Days
| Principal Balance | Amount | % of Principal | Past Due
Purchased from SCC | $ 324,122 | $ 77,373 | 23.9 % | 47.1 %
All other | 192,387 | 12,576 | 6.5 % | 12.4 %
| $ 516,509 | $ 89,949 | 17.4 % | 34.2 %
Credit quality indicators at January 31, 2012 include the following:
|  |  | (in 000s)
Credit Quality Indicators | Purchased from SCC | All Other | Total Portfolio
Occupancy status: |  |  |
Owner occupied | $ 229,463 | $ 122,424 | $ 351,887
Non-owner occupied | 94,659 | 69,963 | 164,622
| $ 324,122 | $ 192,387 | $ 516,509
Documentation level: |  |  |
Full documentation | $ 95,323 | $ 140,179 | $ 235,502
Limited documentation | 8,414 | 19,999 | 28,413
Stated income | 189,698 | 19,793 | 209,491
No documentation | 30,687 | 12,416 | 43,103
| $ 324,122 | $ 192,387 | $ 516,509
Internal risk rating: |  |  |
High | $ 129,745 | $ — | $ 129,745
Medium | 194,377 | — | 194,377
Low | — | 192,387 | 192,387
| $ 324,122 | $ 192,387 | $ 516,509
Loans given our internal risk rating of "high" were generally originated by SCC, have no documentation or are stated income and are non-owner occupied. Loans given our internal risk rating of "medium" were generally full documentation or stated income, with loan-to-value at origination of more than 80% and have credit scores at origination below 700. Loans given our internal risk rating of "low" were generally full documentation, with loan-to-value at origination of less than 80% and have credit scores greater than 700. Our mortgage loans held for investment include concentrations of loans to borrowers in certain states, which may result in increased exposure to loss as a result of changes in real estate values and underlying economic or market conditions related to a particular geographical location. Approximately 52% of our mortgage loan portfolio consists of loans to borrowers located in the states of Florida, California and New York. Detail of the aging of the mortgage loans in our portfolio that are past due as of January 31, 2012 is as follows:
|  |  |  |  |  | (in 000s)
| Less than 60 Days Past Due | 60 –89 Days Past Due | 90+ Days Past Due(1) | Total Past Due | Current | Total
Purchased from SCC | $ 28,876 | $ 6,159 | $ 141,247 | $ 176,282 | $ 147,840 | $ 324,122
All other | 8,423 | 1,524 | 20,639 | 30,586 | 161,801 | 192,387
| $ 37,299 | $ 7,683 | $ 161,886 | $ 206,868 | $ 309,641 | $ 516,509
(1) We do not accrue interest on loans past due 90 days or more. Information related to our non-accrual loans is as follows:
|  | (in 000s)
As of | January 31, 2012 | April 30, 2011
Loans: |  |
Purchased from SCC | $ 142,853 | $ 143,358
Other | 23,283 | 14,106
| 166,136 | 157,464
TDRs: |  |
Purchased from SCC | 5,729 | 2,849
Other | 1,282 | 329
| 7,011 | 3,178
Total non-accrual loans | $ 173,147 | $ 160,642
Information related to impaired loans is as follows:
|  |  |  | (in 000s)
| Portfolio Balance | Portfolio Balance | Total |
| With Allowance | With No Allowance | Portfolio Balance | Related Allowance
As of January 31, 2012: |  |  |  |
Purchased from SCC | $ 179,776 | $ 40,672 | $ 220,448 | $ 71,084
Other | 25,390 | 9,755 | 35,145 | 9,398
| $ 205,166 | $ 50,427 | $ 255,593 | $ 80,482
As of April 30, 2011: |  |  |  |
Purchased from SCC (1) | $ 180,387 | $ 51,674 | $ 232,061 | $ 71,733
Other (1) | 29,027 | 7,561 | 36,588 | 9,116
| $ 209,414 | $ 59,235 | $ 268,649 | $ 80,849
(1) Classification of amounts as of April 30, 2011 has been restated to conform to the current period presentation. Information related to the allowance for impaired loans is as follows:
|  | (in 000s)
As of | January 31, 2012 | April 30, 2011
Portion of total allowance for loan losses allocated to impaired loans and TDR loans: |  |
Based on collateral value method | $ 71,471 | $ 69,794
Based on discounted cash flow method | 9,011 | 11,055
| $ 80,482 | $ 80,849
Information related to activities of our non-performing assets is as follows:
|  | (in 000s)
Nine months ended January 31, | 2012 | 2011
Average impaired loans: |  |
Purchased from SCC | $ 224,002 |
All other | 35,421 |
| $ 259,423 | $ 308,282
Interest income on impaired loans: |  |
Purchased from SCC | $ 4,340 |
All other | 348 |
| $ 4,688 | $ 4,975
Interest income on impaired loans recognized on a cash basis on non-accrual status: |  |
Purchased from SCC | $ 4,182 |
All other | 324 |
| $ 4,506 | $ 4,711
Our real estate owned (REO) includes loans accounted for as in-substance foreclosures of $5.7 million and $7.7 million at January 31, 2012 and April 30, 2011, respectively. Activity related to our REO is as follows:
|  | (in 000s)
Nine months ended January 31, | 2012 | 2011
Balance, beginning of the period | $ 19,532 | $ 29,252
Additions | 6,521 | 12,931
Sales | (7,933 ) | (16,900 )
Writedowns | (2,193 ) | (3,442 )
Balance, end of the period | $ 15,927 | $ 21,841

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- Definition The entire disclosure for mortgage loans on real estate, this includes the supplemental information pertaining to each mortgage loan receivable that equals or exceeds three percent of the carrying amount of mortgages. + References Reference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 948 -SubTopic 310 -Section S99 -Paragraph 1 -Subparagraph (SX 210.12-29) -URI http://asc.fasb.org/extlink&oid=6589523&loc=d3e617274-123014 Reference 2: http://www.xbrl.org/2003/role/presentationRef -Publisher SEC -Name Regulation S-X (SX) -Number 210 -Section 04 -Paragraph c -Subparagraph Schedule IV -Article 5 Reference 3: http://www.xbrl.org/2003/role/presentationRef -Publisher SEC -Name Regulation S-X (SX) -Number 210 -Section 29 -Article 12 Reference 4: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 205 -SubTopic 10 -Section S99 -Paragraph 6 -Subparagraph (SX 210.5-04.(c) Schedule IV) -URI http://asc.fasb.org/extlink&oid=6882300&loc=d3e5864-122674 + Details
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