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Mortgage Loans Held For Investment And Related Assets | 12 Months Ended
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Apr. 30, 2014
Mortgage Loans Held For Investment And Related Assets [Abstract] |
Mortgage Loans Held For Investment And Related Assets | The composition of our mortgage loan portfolio is as follows:
(dollars in 000s) |
As of April 30, |  | 2014 |  | 2013
|  | Amount |  |  | % of Total |  |  | Amount |  |  | % of Total |
Adjustable-rate loans |  | $ | 149,480 |  |  | 54 | % |  | $ | 191,093 |  |  | 55 | %
Fixed-rate loans |  | 127,943 |  |  | 46 | % |  | 159,142 |  |  | 45 | %
|  | 277,423 |  |  | 100 | % |  | 350,235 |  |  | 100 | %
Unamortized deferred fees and costs |  | 2,277 |  |  |  |  | 2,868 |  |  |
Less: Allowance for loan losses |  | (11,272 | ) |  |  |  | (14,314 | ) |  |
|  | $ | 268,428 |  |  |  |  | $ | 338,789 |  |  |
Our loan loss allowance as a percent of mortgage loans was 4.1% as of April 30, 2014 and 2013. Activity in the allowance for loan losses for the years ended April 30, 2014, 2013 and 2012 is as follows:
(in 000s) |
Year ended April 30, |  | 2014 |  |  | 2013 |  |  | 2012 |
Balance as of the beginning of the year |  | $ | 14,314 |  |  | $ | 26,540 |  |  | $ | 92,087 |
Provision |  | 8,271 |  |  | 13,283 |  |  | 24,075 |
Recoveries |  | 4,040 |  |  | 3,338 |  |  | 292 |
Charge-offs |  | (15,353 | ) |  | (28,847 | ) |  | (89,914 | )
Balance as of the end of the year |  | $ | 11,272 |  |  | $ | 14,314 |  |  | $ | 26,540 |
Charge-offs increased during fiscal year 2012 primarily due to a change in practice determined by our regulators, under which we now charge-off loans 180 days past due. 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 TDRs, are evaluated individually. The balance of these loans and the related allowance is as follows:
(in 000s) |
As of April 30, |  | 2014 |  | 2013
|  | Portfolio Balance |  |  | Related Allowance |  |  | Portfolio Balance |  |  | Related Allowance |
Pooled (less than 60 days past due) |  | $ | 158,496 |  |  | $ | 4,508 |  |  | $ | 207,319 |  |  | $ | 5,628 |
Impaired: |  |  |  |  |  |  |  |
Individually (TDRs) |  | 43,865 |  |  | 4,346 |  |  | 55,061 |  |  | 4,924 |
Individually (60 days or more past due) |  | 75,062 |  |  | 2,418 |  |  | 87,855 |  |  | 3,762 |
|  | $ | 277,423 |  |  | $ | 11,272 |  |  | $ | 350,235 |  |  | $ | 14,314 |
Detail of our mortgage loans held for investment and the related allowance as of April 30, 2014 is as follows:
(dollars in 000s) |
|  | Outstanding Principal Balance |  |  | Loan Loss Allowance |  | % 30+ Days Past Due |
|  |  | Amount |  |  | % of Principal |  |
Purchased from SCC |  | $ | 159,566 |  |  | $ | 8,655 |  |  | 5.4 | % |  | 27.1 | %
All other |  | 117,857 |  |  | 2,617 |  |  | 2.2 | % |  | 7.5 | %
|  | $ | 277,423 |  |  | $ | 11,272 |  |  | 4.1 | % |  | 20.1 | %
We review the credit quality of our portfolio primarily based on the following criteria: (1) originator; (2) the level of documentation obtained for loan at origination; (3) occupancy status of property at origination; (4) geography; and (5) credit score and loan to value at origination. We specifically evaluate each loan and assign an internal risk rating of high, medium or low to each loan. The risk rating is based upon multiple loan characteristics that correlate to delinquency and loss. These characteristics include, but are not limited to, the five criteria listed above. These loan attributes are evaluated quarterly against a variety of additional characteristics to ensure the appropriate data is being utilized to determine the level of risk within the portfolio. All criteria are obtained at the time of origination and are only subsequently updated if the loan is refinanced. Credit quality indicators as of April 30, 2014 include the following:
(in 000s) |
Credit Quality Indicators |  | Purchased from SCC |  |  | All Other |  |  | Total Portfolio |
Occupancy status: |  |  |  |  |  |
Owner occupied |  | $ | 117,457 |  |  | $ | 77,572 |  |  | $ | 195,029 |
Non-owner occupied |  | 42,109 |  |  | 40,285 |  |  | 82,394 |
|  | $ | 159,566 |  |  | $ | 117,857 |  |  | $ | 277,423 |
Documentation level: |  |  |  |  |  |
Full documentation |  | $ | 53,019 |  |  | $ | 83,833 |  |  | $ | 136,852 |
Limited documentation |  | 4,897 |  |  | 12,971 |  |  | 17,868 |
Stated income |  | 88,207 |  |  | 13,075 |  |  | 101,282 |
No documentation |  | 13,443 |  |  | 7,978 |  |  | 21,421 |
|  | $ | 159,566 |  |  | $ | 117,857 |  |  | $ | 277,423 |
Internal risk rating: |  |  |  |  |  |
High |  | $ | 45,688 |  |  | $ | — |  |  | $ | 45,688 |
Medium |  | 113,878 |  |  | — |  |  | 113,878 |
Low |  | — |  |  | 117,857 |  |  | 117,857 |
|  | $ | 159,566 |  |  | $ | 117,857 |  |  | $ | 277,423 |
Loans given our internal risk rating of "high" generally had no documentation or were based on stated income. Loans given our internal risk rating of "medium" generally had full documentation or were based on stated income, with loan-to-value ratios at origination of more than 80%, and were made to borrowers with credit scores below 700 at origination. Loans given our internal risk rating of "low" generally had loan-to-value ratios at origination of less than 80% and were made to borrowers with credit scores greater than 700 at origination. 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 51% 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 as of April 30, 2014 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 |  | $ | 12,052 |  |  | $ | 2,623 |  |  | $ | 49,431 |  |  | $ | 64,106 |  |  | $ | 95,460 |  |  | $ | 159,566 |
All other |  | 5,421 |  |  | 847 |  |  | 8,451 |  |  | 14,719 |  |  | 103,138 |  |  | 117,857 |
|  | $ | 17,473 |  |  | $ | 3,470 |  |  | $ | 57,882 |  |  | $ | 78,825 |  |  | $ | 198,598 |  |  | $ | 277,423 |
(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 April 30, |  | 2014 |  |  | 2013 |
Loans: |  |  |  |
Purchased from SCC |  | $ | 61,767 |  |  | $ | 70,327 |
Other |  | 12,528 |  |  | 14,906 |
|  | 74,295 |  |  | 85,233 |
TDRs: |  |  |  |
Purchased from SCC |  | 4,648 |  |  | 3,719 |
Other |  | 951 |  |  | 502 |
|  | 5,599 |  |  | 4,221 |
Total non-accrual loans |  | $ | 79,894 |  |  | $ | 89,454 |
Information related to impaired loans is as follows:
(in 000s) |
|  | Balance With Allowance |  |  | Balance With No Allowance |  |  | Total Impaired Loans |  |  | Related Allowance |
As of April 30, 2014: |  |  |  |  |  |  |  |
Purchased from SCC |  | $ | 27,924 |  |  | $ | 71,075 |  |  | $ | 98,999 |  |  | $ | 3,239 |
Other |  | 5,176 |  |  | 14,752 |  |  | 19,928 |  |  | 3,525 |
|  | $ | 33,100 |  |  | $ | 85,827 |  |  | $ | 118,927 |  |  | $ | 6,764 |
As of April 30, 2013: |  |  |  |  |  |  |  |
Purchased from SCC |  | $ | 33,791 |  |  | $ | 84,592 |  |  | $ | 118,383 |  |  | $ | 6,573 |
Other |  | 7,601 |  |  | 16,932 |  |  | 24,533 |  |  | 2,113 |
|  | $ | 41,392 |  |  | $ | 101,524 |  |  | $ | 142,916 |  |  | $ | 8,686 |
Information related to the allowance for impaired loans is as follows:
(in 000s) |
As of April 30, |  | 2014 |  |  | 2013 |
Portion of total allowance for loan losses allocated to impaired loans and TDR loans: |  |  |  |
Based on collateral value method |  | $ | 2,418 |  |  | $ | 3,762 |
Based on discounted cash flow method |  | 4,346 |  |  | 4,924 |
|  | $ | 6,764 |  |  | $ | 8,686 |
Information related to our impaired loans is as follows:
(in 000s) |
For the year ended April 30, |  | 2014 |  |  | 2013 |  |  | 2012 |
Average impaired loans: |  |  |  |  |  |
Purchased from SCC |  | $ | 93,873 |  |  | $ | 133,936 |  |  | $ | 211,867 |
All other |  | 22,607 |  |  | 25,425 |  |  | 33,940 |
|  | $ | 116,480 |  |  | $ | 159,361 |  |  | $ | 245,807 |
Interest income recognized on impaired and nonaccrual loans was immaterial for all periods presented.

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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 205 -SubTopic 10 -Section S99 -Paragraph 6 -Subparagraph (SX 210.5-04.(c) Schedule IV) -URI http://asc.fasb.org/extlink&oid=27047687&loc=d3e5864-122674 Reference 2: http://www.xbrl.org/2003/role/presentationRef -Publisher SEC -Name Regulation S-X (SX) -Number 210 -Section 29 -Article 12 Reference 3: 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 4: 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 + Details
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