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Consumer Loans Receivable | 9 Months Ended
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Dec. 28, 2019
Receivables [Abstract] |
Consumer Loans Receivable | Consumer Loans Receivable The following table summarizes consumer loans receivable (in thousands):
| December 28, 2019 |  | March 30, 2019
Loans held for investment (at Acquisition Date, defined below) | $ | 39,403 |  |  | $ | 44,375 |
Loans held for investment (originated after Acquisition Date) | 20,839 |  |  | 20,580 |
Loans held for sale | 19,839 |  |  | 11,288 |
Construction advances | 12,626 |  |  | 12,883 |
Consumer loans receivable | 92,707 |  |  | 89,126 |
Deferred financing fees and other, net | (2,284 | ) |  | (1,926 | )
Allowance for loan losses | (431 | ) |  | (415 | )
| $ | 89,992 |  |  | $ | 86,785 |
The allowance for loan losses is developed at the loan level and allocated to specific individual loans or to impaired loans. A range of probable losses is calculated after giving consideration to, among other things, the loan characteristics and historical loss experience. The Company then makes a determination of the best estimate within the range of loan losses. The allowance for loan losses reflects the Company's judgment of the probable loss exposure on its loans held for investment portfolio. The Company acquired consumer loans receivable as part of its acquisition of Palm Harbor Homes, Inc. ("Palm Harbor") in April 2011 ("Acquisition Date"). As of the Acquisition Date, the Company determined the excess of the loan pool's scheduled contractual principal and interest payments over all cash flows expected as an amount that consists of interest that cannot be accreted into interest income (the non-accretable difference). The cash flow expected to be collected in excess of the carrying value of the acquired loans consists of interest that is accreted into interest income over the remaining life of the loans (accretable yield). Interest income on consumer loans receivable is recognized as Net revenue.
| December 28, 2019 |  | March 30, 2019
| (in thousands)
Loans held for investment (at Acquisition Date) – contractual amount | $ | 87,543 |  |  | $ | 100,595 |
Purchase discount: |  |  |
Accretable | (32,068 | ) |  | (36,672 | )
Non-accretable | (16,026 | ) |  | (19,502 | )
Less loans reclassified as other assets | (46 | ) |  | (46 | )
Total loans held for investment (at Acquisition Date), net | $ | 39,403 |  |  | $ | 44,375 |
Over the life of the consumer loans held for investment (at Acquisition Date), the Company estimates cash flows expected to be collected to determine if an allowance for loan loss subsequent to the Acquisition Date is required. The weighted averages of assumptions used in the calculation of expected cash flows to be collected were as follows:
| December 28, 2019 |  | March 30, 2019
Prepayment rate | 16.6 | % |  | 17.1 | %
Default rate | 1.3 | % |  | 1.1 | %
Assuming there was a 1% (100 basis point) unfavorable variation from the expected level, for each key assumption, the expected cash flows over the life of the portfolio, as of December 28, 2019, would decrease by approximately $817,000 and $2.3 million for the expected prepayment rate and expected default rate, respectively. The changes in accretable yield on consumer loans receivable held for investment (at Acquisition Date) were as follows (in thousands):
| Three Months Ended |  | Nine Months Ended
| December 28, 2019 |  | December 29, 2018 |  | December 28, 2019 |  | December 29, 2018
Balance at the beginning of the period | $ | 34,108 |  |  | $ | 40,937 |  |  | $ | 36,672 |  |  | $ | 44,481 |
Accretion | (1,606 | ) |  | (1,904 | ) |  | (5,086 | ) |  | (5,771 | )
Reclassifications (from) to non-accretable discount | (434 | ) |  | (376 | ) |  | 482 |  |  | (53 | )
Balance at the end of the period | $ | 32,068 |  |  | $ | 38,657 |  |  | $ | 32,068 |  |  | $ | 38,657 |
Total consumer loans held for investment had the following characteristics:
| December 28, 2019 |  | March 30, 2019
Weighted average contractual interest rate | 8.42 | % |  | 8.49 | %
Weighted average effective interest rate | 9.18 | % |  | 9.11 | %
Weighted average months to maturity | 163 |  |  | 163 |
The following table disaggregates CountryPlace's gross consumer loans receivable for each class by portfolio segment and credit quality indicator as of the time of origination (in thousands):
| December 28, 2019
| Consumer Loans Held for Investment |  |  |  |  |  |
| Securitized 2005 |  | Securitized 2007 |  | Unsecuritized |  | Construction Advances |  | Consumer Loans Held For Sale |  | Total
Asset Class |  |  |  |  |  |  |  |  |  |  |
Credit Quality Indicator (FICO® score) |  |  |  |  |  |  |  |
Home-only loans |  |  |  |  |  |  |  |  |  |  |
0-619 | $ | 362 |  |  | $ | 219 |  |  | $ | 245 |  |  | $ | — |  |  | $ | — |  |  | $ | 826 |
620-719 | 7,319 |  |  | 5,467 |  |  | 10,873 |  |  | — |  |  | — |  |  | 23,659 |
720+ | 7,933 |  |  | 4,660 |  |  | 7,392 |  |  | — |  |  | 538 |  |  | 20,523 |
Other | 46 |  |  | — |  |  | 339 |  |  | — |  |  | — |  |  | 385 |
Subtotal | 15,660 |  |  | 10,346 |  |  | 18,849 |  |  | — |  |  | 538 |  |  | 45,393 |
Conforming mortgages |  |  |  |  |  |  |  |  |  |
0-619 | — |  |  | — |  |  | 83 |  |  | — |  |  | — |  |  | 83 |
620-719 | — |  |  | — |  |  | 2,402 |  |  | 8,321 |  |  | 12,173 |  |  | 22,896 |
720+ | — |  |  | — |  |  | 1,061 |  |  | 4,305 |  |  | 7,128 |  |  | 12,494 |
Subtotal | — |  |  | — |  |  | 3,546 |  |  | 12,626 |  |  | 19,301 |  |  | 35,473 |
Non-conforming mortgages |  |  |  |  |  |  |  |  |  |
0-619 | 76 |  |  | 277 |  |  | 828 |  |  | — |  |  | — |  |  | 1,181 |
620-719 | 764 |  |  | 3,820 |  |  | 2,528 |  |  | — |  |  | — |  |  | 7,112 |
720+ | 1,115 |  |  | 1,992 |  |  | 230 |  |  | — |  |  | — |  |  | 3,337 |
Other | — |  |  | — |  |  | 181 |  |  | — |  |  | — |  |  | 181 |
Subtotal | 1,955 |  |  | 6,089 |  |  | 3,767 |  |  | — |  |  | — |  |  | 11,811 |
Other loans | — |  |  | — |  |  | 30 |  |  | — |  |  | — |  |  | 30 |
| $ | 17,615 |  |  | $ | 16,435 |  |  | $ | 26,192 |  |  | $ | 12,626 |  |  | $ | 19,839 |  |  | $ | 92,707 |
| March 30, 2019
| Consumer Loans Held for Investment |  |  |  |  |  |
| Securitized 2005 |  | Securitized 2007 |  | Unsecuritized |  | Construction Advances |  | Consumer Loans Held For Sale |  | Total
Asset Class |  |  |  |  |  |  |  |  |  |  |
Credit Quality Indicator (FICO® score) |  |  |  |  |  |  |  |
Home-only loans |  |  |  |  |  |  |  |  |  |  |
0-619 | $ | 401 |  |  | $ | 245 |  |  | $ | 266 |  |  | $ | — |  |  | $ | — |  |  | $ | 912 |
620-719 | 8,448 |  |  | 5,996 |  |  | 10,266 |  |  | — |  |  | — |  |  | 24,710 |
720+ | 9,090 |  |  | 5,419 |  |  | 8,436 |  |  | — |  |  | 617 |  |  | 23,562 |
Other | 47 |  |  | — |  |  | 390 |  |  | — |  |  | — |  |  | 437 |
Subtotal | 17,986 |  |  | 11,660 |  |  | 19,358 |  |  | — |  |  | 617 |  |  | 49,621 |
Conforming mortgages |  |  |  |  |  |  |  |  |  |
0-619 | — |  |  | — |  |  | 83 |  |  | — |  |  | 460 |  |  | 543 |
620-719 | — |  |  | — |  |  | 2,202 |  |  | 8,061 |  |  | 6,885 |  |  | 17,148 |
720+ | — |  |  | — |  |  | 684 |  |  | 4,822 |  |  | 3,326 |  |  | 8,832 |
Subtotal | — |  |  | — |  |  | 2,969 |  |  | 12,883 |  |  | 10,671 |  |  | 26,523 |
Non-conforming mortgages |  |  |  |  |  |  |  |  |  |
0-619 | 78 |  |  | 344 |  |  | 991 |  |  | — |  |  | — |  |  | 1,413 |
620-719 | 994 |  |  | 4,008 |  |  | 2,687 |  |  | — |  |  | — |  |  | 7,689 |
720+ | 1,238 |  |  | 2,053 |  |  | 369 |  |  | — |  |  | — |  |  | 3,660 |
Other | — |  |  | — |  |  | 214 |  |  | — |  |  | — |  |  | 214 |
Subtotal | 2,310 |  |  | 6,405 |  |  | 4,261 |  |  | — |  |  | — |  |  | 12,976 |
Other loans | — |  |  | — |  |  | 6 |  |  | — |  |  | — |  |  | 6 |
| $ | 20,296 |  |  | $ | 18,065 |  |  | $ | 26,594 |  |  | $ | 12,883 |  |  | $ | 11,288 |  |  | $ | 89,126 |
Loan contracts secured by geographically concentrated collateral could experience higher rates of delinquencies, default and foreclosure losses than loan contracts secured by collateral that is more geographically dispersed. As of December 28, 2019, 41% of the outstanding principal balance of the consumer loans receivable portfolio was concentrated in Texas and 14% was concentrated in Florida. As of March 30, 2019, 44% of the outstanding principal balance of the consumer loans receivable portfolio was concentrated in Texas and 12% was concentrated in Florida. Other than Texas and Florida, no state had concentrations in excess of 10% of the principal balance of the consumer loans receivable as of December 28, 2019 or March 30, 2019. Collateral for repossessed loans is acquired through foreclosure or similar proceedings and is recorded at the estimated fair value of the home, less the costs to sell. At repossession, the fair value of the collateral is determined based on the historical recovery rates of previously charged-off loans; the loan is charged off and the loss is recorded to the allowance for loan losses. On a monthly basis, the fair value of the collateral is adjusted to the lower of the amount recorded at repossession or the estimated sales price less estimated costs to sell, based on current information. Repossessed homes totaled approximately $1.1 million and $1.5 million as of December 28, 2019 and March 30, 2019, respectively, and are included in Prepaid expenses and other current assets in the Consolidated Balance Sheets. Foreclosure or similar proceedings in progress totaled approximately $1.0 million and $1.5 million as of December 28, 2019 and March 30, 2019, respectively.

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