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NOTE 11 INVESTMENT IN UNCONSOLIDATED ENTITIES
 12 Months Ended
Dec. 31, 2011
Equity Method Investments Disclosure [Text Block]

NOTE 11 INVESTMENT IN UNCONSOLIDATED ENTITIES


Investment in unconsolidated entities consisted of the following at December 31:


   

2011

   

2010

 
Asset Management Vehicles:            
Investment in OSI (1)   $ 7,561     $ 7,572  
Investment in ONL and affiliates (2)     1,475       4,420  
      9,036       11,992  
Corporate Items and Other:                
Investment in Correspondent One (3)     14,470       —  
Other     1       80  
      14,471       80  
    $ 23,507     $ 12,072  

Equity in earnings (losses) of unconsolidated entities was as follows for the years ended December 31:


   

2011

   

2010

   

2009

 
OSI (1) (4)   $ 1,001     $ 1,195     $ (1,756 )
ONL and affiliates (2) (4)     (1,217 )     176       (1,177 )
Correspondent One (3)     (530 )     —       —  
    $ (746 )   $ 1,371     $ (2,933 )

(1) Our investment in OSI represents a 27% equity interest. OSI invests in the lower tranches and residuals of residential mortgage-backed securities, the related mortgage servicing rights and other similar assets. During 2011, we received distributions from OSI totaling $750. We have no remaining commitment to invest in OSI. On December 22, 2011, we acquired a 2% ownership interest held by another investor in OSI.
   
(2) Our investment in ONL and affiliates represent equity interests of approximately 25%. ONL resolves non-performing loans purchased at a discount. An affiliate purchases real estate for sale, including real estate that ONL may obtain through foreclosure. During 2011, we received distributions totaling $1,665 from ONL and affiliates. We have no remaining commitment to invest in ONL.
   
(3) In March 2011, we acquired a 50% interest in Correspondent One. Correspondent One facilitates the purchase of conforming and government-guaranteed residential mortgages from approved mortgage originators and resells the mortgages to secondary market investors. During 2011, we funded all of our committed $15,000 investment. Subsequent investments in Correspondent One by unrelated third parties reduced our interest to 49% as of December 31, 2011.

(4) We earn loan servicing and management fees from OSI and from ONL and affiliates. In determining the amount of consolidated equity in earnings to recognize, we add back our share of the loan servicing and management fee expense recognized by OSI, ONL and affiliates. During 2011, 2010, 2009, OLS earned fees of $2,645, $3,064 and $4,481, respectively, from OSI and from ONL and affiliates. On a consolidated basis, we have recognized approximately 75% of the loan servicing and management fee revenue.

Summarized combined financial information of our unconsolidated entities at and for the years ended December 31 is as follows:


   

2011

   

2010

   

2009 (1)

 
Operations                  
Revenues, net, and investment income, net   $ 4,892     $ 7,287     $ (9,641 )
Losses on investments and derivatives, net     (8,458 )     (4,470 )     (10,611 )
Net income (loss)     (4,651 )     2,817       (42,206 )
Financial Condition                        
Total assets   $ 66,405     $ 49,354     $ 1,001,751  
Total liabilities     1,915       1,245       987,784  
Total equity     64,490       48,109       13,967  

(1) For 2009, the amounts presented include BHI Liquidation, Inc. (formerly BMS Holdings, Inc.), in which we have an equity interest of approximately 45%. BMS Holdings, Inc. had total assets of $940,618, total liabilities of $986,592, equity of $(45,974), net revenues of $(17,625), income on investments and derivatives of $13,642 and a net loss of $25,937. As a result of accumulated losses, we reduced our investment in BHI Liquidation, Inc. to zero in the second quarter of 2008 and have not recognized any equity in its income or losses since that time. Effective October 1, 2010, BHI Liquidation, Inc. transferred its interests in Bankruptcy Management Solutions, Inc. (the operating entity) to debt holders as part of a restructuring plan and no longer has any assets or operations.