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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
 Washington, DC 20549
 
 FORM 10-Q
  þ
    
    Quarterly Report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
 For the quarter ended September 30, 2009
 or
 o
    
    Transition Report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
 For the transition period from  to
 Commission File number 000-52611
 IMH SECURED LOAN FUND, LLC
  Delaware
    
    81-0624254(State or other jurisdiction of incorporation or
    
    (I.R.S. Employer Identification Number)organization)
 4900 N. Scottsdale Rd #5000
Scottsdale, Arizona, 85251
 (480) 840-8400
 þ o
 Yes
o No
o
  Large accelerated filer o
    
    Accelerated filer o
    
    Non-accelerated filer þ
    
    Smaller reporting company o(Do not check if a smaller reporting company)
 o þ




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##### 



IMH SECURED LOAN FUND, LLC
QUARTERLY REPORT ON FORM 10-Q
INDEX
 PART I  FINANCIAL INFORMATIONItem 1. Financial StatementsConsolidated Balance Sheets as of September 30, 2009 and December 31, 2008
    
    
    3Consolidated Statements of Operations for the Nine and Three months Ended
September 30, 2009 and 2008
    
    
    4Consolidated Statement of Members Equity for the Nine Months Ended
September 30, 2009
    
    
    5Consolidated Statements of Cash Flows for the Nine Months Ended September
30, 2009 and 2008
    
    
    6Notes to Consolidated Financial Statements
    
    
    7Item 2. Managements Discussion and Analysis of Financial Condition and Results
of Operations
    
    
    28Item 3. Quantitative and Qualitative Disclosures About Market Risk
    
    
    61Item 4T. Controls and Procedures
    
    
    63PART II  OTHER INFORMATIONItem 1. Legal Proceedings
    
    
    63Item 1A. Risk Factors
    
    
    64Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
    
    
    67Item 6. Exhibits
    
    
    68Signatures
    
    
    69Index to Exhibits
    
    
    70Exhibit 31.1Exhibit 31.2Exhibit 32.1
   2




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PART
I
FINANCIAL INFORMATION
 
 Item 1.
    
    Financial Statements.
 IMH SECURED LOAN FUND, LLC
 
 Consolidated Balance Sheets
 (In thousands, except unit data)
 September 30,
    
    
    December 31,2009
    
    
    2008(Unaudited)ASSETSCash and Cash Equivalents
    
    $
    2,463
    
    
    $
    23,815Mortgage Loans:Mortgage Loan Note Obligations
    
    
    494,803
    
    
    
    549,686Less Undisbursed Portion of Loans-in-process and Interest Reserves
    
    
    (4,075
    )
    
    
    (26,574
    )Principal Outstanding Held for Investment
    
    
    490,728
    
    
    
    523,112Mortgage Loan Principal Held for Sale
    
    
    62,628
    
    
    
    90,742Mortgage Loan Principal Outstanding
    
    
    553,356
    
    
    
    613,854Less Allowance for Credit Loss
    
    
    (337,000
    )
    
    
    (300,310
    )Mortgage Loans, Net
    
    
    216,356
    
    
    
    313,544Accrued Interest and Other Receivables
    
    
    16,490
    
    
    
    12,014Real Estate Held for Sale, Net
    
    
    7,092
    
    
    
    Real Estate Held for Development, Net:Acquired through Foreclosure
    
    
    82,765
    
    
    
    55,318Purchased for Investment
    
    
    7,448
    
    
    
    7,463Real Estate Held for Development, Net
    
    
    90,213
    
    
    
    62,781Deposits and Other Assets
    
    
    625
    
    
    
    179Advances to Fund Manager
    
    
    1,338
    
    
    
    2,471Total Assets
    
    $
    334,577
    
    
    $
    414,804LIABILITIESPayables to Fund Manager
    
    $
    5,270
    
    
    $
    1,681Other Payables and Accrued Liabilities
    
    
    5,487
    
    
    
    70Distributions Payable to Members
    
    
    
    
    
    
    4,963Borrowings From Fund Manager
    
    
    2,520
    
    
    
    Unearned Income and Other Funds Held
    
    
    129
    
    
    
    39Total Liabilities
    
    
    13,406
    
    
    
    6,753MEMBERS EQUITYAccumulated Deficit
    
    
    (409,212
    )
    
    
    (322,332
    )Members Equity  $10,000 per unit stated value,
authorized units set at discretion of
the Manager 
73,038 units issued and outstanding at
September 30,
2009 and December 31, 2008, respectively
    
    
    730,383
    
    
    
    730,383Total Members Equity
    
    
    321,171
    
    
    
    408,051Commitments and Contingent LiabilitiesTotal Liabilities and Members Equity
    
    $
    334,577
    
    
    $
    414,804
 The accompanying notes are an integral part of these statements
  3




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IMH SECURED LOAN FUND, LLC
 
 Consolidated Statements of Operations
 (Unaudited)
 (In thousands, except unit and per unit data)
 Nine Months Ended
    
    
    Three Months EndedSeptember 30,
    
    
    September 30,2009
    
    
    2008
    
    
    2009
    
    
    2008INTEREST, FEE AND OTHER INCOMEMortgage Loans
    
    $
    20,256
    
    
    $
    49,419
    
    
    $
    2,697
    
    
    $
    17,069Investments and Money Market
Accounts and Other Income
    
    
    494
    
    
    
    1,789
    
    
    
    458
    
    
    
    467Total Interest and Fee Income
    
    
    20,750
    
    
    
    51,208
    
    
    
    3,155
    
    
    
    17,536EXPENSESManagement Fees
    
    
    481
    
    
    
    819
    
    
    
    62
    
    
    
    300Default Related and Other Fund Expenses
    
    
    579
    
    
    
    503
    
    
    
    251
    
    
    
    418Operating Expenses for Real Estate Owned
    
    
    2,817
    
    
    
    62
    
    
    
    1,477
    
    
    
    62Professional Fees
    
    
    1,830
    
    
    
    142
    
    
    
    641
    
    
    
    75Interest Expense:Borrowings from Fund Manager
    
    
    217
    
    
    
    
    
    
    
    115
    
    
    
    Borrowings on Note Payable
    
    
    
    
    
    
    78
    
    
    
    
    
    
    
    Interest Expense
    
    
    217
    
    
    
    78
    
    
    
    115
    
    
    
    Valuation charge for:Provision for Loan Loss based on Fair Value Estimates as of Balance Sheet Date
    
    
    82,000
    
    
    
    41,130
    
    
    
    82,000
    
    
    
    41,130Impairment of Assets Acquired through Foreclosure
    
    
    8,000
    
    
    
    1,300
    
    
    
    8,000
    
    
    
    1,300Total Valuation Charge
    
    
    90,000
    
    
    
    42,430
    
    
    
    90,000
    
    
    
    42,430Net Earnings (Loss)
    
    $
    (75,174
    )
    
    $
    7,174
    
    
    $
    (89,391
    )
    
    $
    (25,749
    )Net Earnings (Loss) Allocated to Members per Weighted Average Membership Units Outstanding
    
    $
    (1,029.24
    )
    
    $
    109.32
    
    
    $
    (1,223.88
    )
    
    $
    (363.65
    )Distribututions to Members per Weighted Average Membership Units Outstanding
    
    $
    160.27
    
    
    $
    749.20
    
    
    $
    
    
    
    $
    234.84Weighted Average Membership Units Outstanding
    
    
    73,038
    
    
    
    65,622
    
    
    
    73,038
    
    
    
    70,807
 The accompanying notes are an integral part of these statements
  4




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IMH SECURED LOAN FUND, LLC
 
 Consolidated Statement of Members Equity
 Nine Months Ended September 30, 2009
 (Unaudited)
 (In thousands, except unit data)
 TotalMembers
    
    
    Members
    
    
    Accumulated
    
    
    MembersUnits
    
    
    Capital
    
    
    Deficit
    
    
    EquityBalances at December 31, 2008
    
    
    73,038
    
    
    $
    730,383
    
    
    $
    (322,332
    )
    
    $
    408,051Net Loss  Nine months ended September 30, 2009
    
    
    
    
    
    
    
    
    
    
    (75,174
    )
    
    
    (75,174
    )Distributions to Members
    
    
    
    
    
    
    
    
    
    
    (11,706
    )
    
    
    (11,706
    )Net Activity for Period
    
    
    
    
    
    
    
    
    
    
    (86,880
    )
    
    
    (86,880
    )Balances at September 30, 2009
    
    
    73,038
    
    
    $
    730,383
    
    
    $
    (409,212
    )
    
    $
    321,171
 The accompanying notes are an integral part of these statements
  5




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IMH SECURED LOAN FUND, LLC
 
 Consolidated Statements of Cash Flows
 Nine Months Ended September 30, 2009 and 2008
 (Unaudited)
 (In thousands)
 Nine Months Ended September 30,2009
    
    
    2008CASH FLOWS  Operating Activities:Net Earnings (Loss)
    
    $
    (75,174
    )
    
    $
    7,174Adjustments to Reconcile Net Earnings (Loss) to Net Cash Provided by Operating Activities:Valuation Provision Charge
    
    
    90,000
    
    
    
    42,430Accretion of Note Discount
    
    
    
    
    
    
    (9,639
    )Depreciation and Amortization
    
    
    283
    
    
    
    Increase in Accrued Interest Receivable
    
    
    (6,533
    )
    
    
    (3,933
    )Increase in Deposits and Other Assets
    
    
    (499
    )
    
    
    (255
    )Increase (Decrease) in Due From/To Fund Manager
    
    
    (38
    )
    
    
    921Increase in Other Payables and Accrued Liabilities
    
    
    5,417
    
    
    
    70Increase (Decrease) in Unearned Income
    
    
    90
    
    
    
    (474
    )Net Cash Provided by Operating Activities
    
    
    13,546
    
    
    
    36,294CASH FLOWS  Investing Activities:Mortgage Loans Fundings
    
    
    (25,827
    )
    
    
    (220,905
    )Mortgage Loan Repayments
    
    
    6,664
    
    
    
    34,544Mortgage Loan Repayment from Sale of Whole Loan
    
    
    
    
    
    
    31,325Proceeds from Real Estate Sold
    
    
    770
    
    
    
    Investment in Real Estate Held for Development
    
    
    (2,356
    )
    
    
    (8,116
    )Net Cash Used in Investing Activities
    
    
    (20,749
    )
    
    
    (163,152
    )CASH FLOWS  Financing Activities:Proceeds from Note Payable to Bank
    
    
    
    
    
    
    8,000Repayment of Note Payable to Bank
    
    
    
    
    
    
    (8,000
    )Proceeds from Borrowings from Manager
    
    
    6,000Repayments of Borrowings from Manager
    
    
    (3,480
    )Increase (Decrease) in Member Investments Pending Activation
    
    
    
    
    
    
    (3,391
    )Members Capital Investments
    
    
    
    
    
    
    250,941Members Redemptions
    
    
    
    
    
    
    (113,206
    )Members Distributions
    
    
    (16,669
    )
    
    
    (23,324
    )Net Cash Provided (Used) by Financing Activities
    
    
    (14,149
    )
    
    
    111,020Net Increase (Decrease) in Cash and Cash Equivalents
    
    
    (21,352
    )
    
    
    (15,838
    )Cash and Cash Equivalents:Beginning of Period
    
    
    23,815
    
    
    
    73,604End of Period
    
    $
    2,463
    
    
    $
    57,766Supplemental Cash Flow Information:Interest Paid
    
    $
    217
    
    
    $
    78Supplemental Disclosure of Non-Cash Financing and Investing Activities:Real Estate Acquired through Foreclosure
    
    $
    41,169
    
    
    $
    81,362Loans Satisfied with Next-Phase Financing
    
    $
    
    
    
    $
    41,886
 The accompanying notes are an integral part of these statements
  6




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IMH SECURED LOAN FUND, LLC
 
     NOTE
1  FUND DESCRIPTION AND BASIS OF PRESENTATION
      7




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IMH SECURED LOAN FUND, LLC
 NOTE 1  FUND DESCRIPTION AND BASIS OF PRESENTATION  CONTINUED
      8




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IMH SECURED LOAN FUND, LLC
 NOTE 1  FUND DESCRIPTION AND BASIS OF PRESENTATION  CONTINUED
  
    
    Implemented a cost reduction program, including a reduction in staff. The
reduction in staff affected nearly 60% of the Managers employees while preserving more
modest core functionality in the material operational areas. To date, the Manager has
stabilized monthly operating costs at approximately $400 per month.
 
    
    On-going collaboration with investment banking firms to seek to close
financing and capital raising alternatives.
 
    
    Continued to explore mechanisms through which the Manager can continue to
participate in the capital markets, including, without limitation, the use of additional
funding vehicles to seek to capitalize on what the Manager believes are numerous business
opportunities arising from the disruptions in the capital and credit markets.
 
    
    Engaged in on-going negotiations with creditors to defer or otherwise
restructure existing liabilities of the Manager.
 
    
    Considered other initiatives to seek to mitigate the risk of the continued
viability of the Manager as an operating entity.
  NOTE 2  SIGNIFICANT ACCOUNTING POLICIES
 Basis of Accounting
    9




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IMH SECURED LOAN FUND, LLC
 NOTE 2  SIGNIFICANT ACCOUNTING POLICIES  CONTINUED
 Real Estate Held for Sale
  Use of Estimates
  Recent Accounting Pronouncements
     10




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IMH SECURED LOAN FUND, LLC
 NOTE 2  SIGNIFICANT ACCOUNTING POLICIES  CONTINUED
    Reclassifications
  Subsequent Events
   11




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IMH SECURED LOAN FUND, LLC
 NOTE 3  CASH AND CASH EQUIVALENTS
    NOTE 4  MORTGAGE LOANS, LOAN PARTICIPATIONS AND LOAN SALES
   12




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IMH SECURED LOAN FUND, LLC
 NOTE 4  MORTGAGE LOANS, LOAN PARTICIPATIONS AND LOAN SALES  CONTINUED
 Loan Interest Rates
  September 30, 2009Fixed Rate
    
    
    Variable Rate
    
    
    TotalOutstanding
    
    
    
    
    
    
    Outstanding
    
    
    
    
    
    
    Outstanding
    
    
    Allowance for
    
    
    Net Carrying#
    
    
    Principal
    
    
    #
    
    
    Principal
    
    
    #
    
    
    Principal
    
    
    Credit Loss
    
    
    Amount
    
    
    %Current Rate:6.00%
    
    
    1
    
    
    $
    5,890
    
    
    
    
    
    
    $
    
    
    
    
    1
    
    
    $
    5,890
    
    
    $
    (1,625
    )
    
    $
    4,265
    
    
    
    2.0
    %7.53%
    
    
    1
    
    
    
    41,886
    
    
    
    
    
    
    
    
    
    
    
    1
    
    
    
    41,886
    
    
    
    (31,464
    )
    
    
    10,422
    
    
    
    4.8
    %8.00%
    
    
    3
    
    
    
    4,961
    
    
    
    
    
    
    
    
    
    
    
    3
    
    
    
    4,961
    
    
    
    (52
    )
    
    
    4,909
    
    
    
    2.3
    %8.25%
    
    
    1
    
    
    
    55,885
    
    
    
    
    
    
    
    
    
    
    
    1
    
    
    
    55,885
    
    
    
    (2,311
    )
    
    
    53,574
    
    
    
    24.7
    %9.00%
    
    
    1
    
    
    
    1,589
    
    
    
    
    
    
    
    
    
    
    
    1
    
    
    
    1,589
    
    
    
    (56
    )
    
    
    1,533
    
    
    
    0.7
    %10.00%
    
    
    3
    
    
    
    27,871
    
    
    
    
    
    
    
    
    
    
    
    3
    
    
    
    27,871
    
    
    
    (22,178
    )
    
    
    5,693
    
    
    
    2.6
    %11.00%
    
    
    1
    
    
    
    1,465
    
    
    
    1
    
    
    
    1,618
    
    
    
    2
    
    
    
    3,083
    
    
    
    
    
    
    
    3,083
    
    
    
    1.4
    %11.50%
    
    
    1
    
    
    
    1,102
    
    
    
    4
    
    
    
    11,328
    
    
    
    5
    
    
    
    12,430
    
    
    
    (4,711
    )
    
    
    7,719
    
    
    
    3.6
    %11.75%
    
    
    1
    
    
    
    5,759
    
    
    
    
    
    
    
    
    
    
    
    1
    
    
    
    5,759
    
    
    
    
    
    
    
    5,759
    
    
    
    2.7
    %12.00%
    
    
    7
    
    
    
    61,403
    
    
    
    8
    
    
    
    53,569
    
    
    
    15
    
    
    
    114,972
    
    
    
    (60,334
    )
    
    
    54,638
    
    
    
    25.2
    %12.25%
    
    
    
    
    
    
    
    
    
    
    2
    
    
    
    56,558
    
    
    
    2
    
    
    
    56,558
    
    
    
    (51,223
    )
    
    
    5,335
    
    
    
    2.5
    %12.50%
    
    
    1
    
    
    
    1,169
    
    
    
    6
    
    
    
    22,441
    
    
    
    7
    
    
    
    23,610
    
    
    
    (18,466
    )
    
    
    5,144
    
    
    
    2.4
    %12.75%
    
    
    1
    
    
    
    37,958
    
    
    
    
    
    
    
    
    
    
    
    1
    
    
    
    37,958
    
    
    
    (23,289
    )
    
    
    14,669
    
    
    
    6.8
    %13.00%
    
    
    3
    
    
    
    30,307
    
    
    
    9
    
    
    
    54,947
    
    
    
    12
    
    
    
    85,254
    
    
    
    (60,987
    )
    
    
    24,267
    
    
    
    11.2
    %13.75%
    
    
    
    
    
    
    
    
    
    
    2
    
    
    
    6,528
    
    
    
    2
    
    
    
    6,528
    
    
    
    (6,027
    )
    
    
    501
    
    
    
    0.2
    %14.25%
    
    
    
    
    
    
    
    
    
    
    1
    
    
    
    69,122
    
    
    
    1
    
    
    
    69,122
    
    
    
    (54,277
    )
    
    
    14,845
    
    
    
    6.9
    %Total
    
    
    25
    
    
    $
    277,245
    
    
    
    33
    
    
    $
    276,111
    
    
    
    58
    
    
    $
    553,356
    
    
    $
    (337,000
    )
    
    $
    216,356
    
    
    
    100.0
    %% of Portfolio
    
    
    
    
    
    
    50.1
    %
    
    
    
    
    
    
    49.9
    %
    
    
    
    
    
    
    100.0
    %Weighted Average Rate
    
    
    
    
    10.26
    %
    
    
    
    
    
    
    12.87
    %
    
    
    
    
    
    
    11.56
    %Number of Loans
    
    
    
    
    
    
    25
    
    
    
    
    
    
    
    33
    
    
    
    
    
    
    
    58Average Principal
    
    
    
    
    
    $
    11,090
    
    
    
    
    
    
    $
    8,367
    
    
    
    
    
    
    $
    9,541
 December 31, 2008Fixed Rate
    
    
    Variable Rate
    
    
    TotalOutstanding
    
    
    
    
    
    
    Outstanding
    
    
    
    
    
    
    Outstanding
    
    
    Allowance for
    
    
    Net Carrying#
    
    
    Principal
    
    
    #
    
    
    Principal
    
    
    #
    
    
    Principal
    
    
    Credit Loss
    
    
    Amount
    
    
    %Current Rate:8.00%
    
    
    1
    
    
    $
    3,500
    
    
    
    
    
    
    $
    
    
    
    
    1
    
    
    $
    3,500
    
    
    $
    
    
    
    $
    3,500
    
    
    
    1.1
    %9.00%
    
    
    1
    
    
    
    10,461
    
    
    
    1
    
    
    
    1,622
    
    
    
    2
    
    
    
    12,083
    
    
    
    (10,175
    )
    
    
    1,908
    
    
    
    0.6
    %10.00%
    
    
    1
    
    
    
    26,709
    
    
    
    
    
    
    
    
    
    
    
    1
    
    
    
    26,709
    
    
    
    (23,226
    )
    
    
    3,483
    
    
    
    1.1
    %11.00%
    
    
    
    
    
    
    
    
    
    
    1
    
    
    
    1,981
    
    
    
    1
    
    
    
    1,981
    
    
    
    
    
    
    
    1,981
    
    
    
    0.6
    %11.25%
    
    
    
    
    
    
    
    
    
    
    1
    
    
    
    46,020
    
    
    
    1
    
    
    
    46,020
    
    
    
    
    
    
    
    46,020
    
    
    
    14.7
    %11.50%
    
    
    2
    
    
    
    2,651
    
    
    
    6
    
    
    
    94,283
    
    
    
    8
    
    
    
    96,934
    
    
    
    (15,928
    )
    
    
    81,006
    
    
    
    25.8
    %11.75%
    
    
    1
    
    
    
    4,752
    
    
    
    
    
    
    
    
    
    
    
    1
    
    
    
    4,752
    
    
    
    
    
    
    
    4,752
    
    
    
    1.5
    %12.00%
    
    
    10
    
    
    
    75,758
    
    
    
    9
    
    
    
    67,683
    
    
    
    19
    
    
    
    143,441
    
    
    
    (54,499
    )
    
    
    88,942
    
    
    
    28.4
    %12.25%
    
    
    1
    
    
    
    631
    
    
    
    3
    
    
    
    55,850
    
    
    
    4
    
    
    
    56,481
    
    
    
    (52,775
    )
    
    
    3,706
    
    
    
    1.2
    %12.50%
    
    
    1
    
    
    
    1,929
    
    
    
    6
    
    
    
    22,227
    
    
    
    7
    
    
    
    24,156
    
    
    
    (18,026
    )
    
    
    6,130
    
    
    
    2.0
    %12.75%
    
    
    1
    
    
    
    37,935
    
    
    
    
    
    
    
    
    
    
    
    1
    
    
    
    37,935
    
    
    
    (25,394
    )
    
    
    12,541
    
    
    
    4.0
    %13.00%
    
    
    3
    
    
    
    27,897
    
    
    
    9
    
    
    
    54,947
    
    
    
    12
    
    
    
    82,844
    
    
    
    (64,831
    )
    
    
    18,013
    
    
    
    5.7
    %13.25%
    
    
    
    
    
    
    
    
    
    
    1
    
    
    
    2,821
    
    
    
    1
    
    
    
    2,821
    
    
    
    (1,675
    )
    
    
    1,146
    
    
    
    0.4
    %13.75%
    
    
    
    
    
    
    
    
    
    
    2
    
    
    
    6,528
    
    
    
    2
    
    
    
    6,528
    
    
    
    (3,781
    )
    
    
    2,747
    
    
    
    0.9
    %14.25%
    
    
    
    
    
    
    
    
    
    
    1
    
    
    
    67,669
    
    
    
    1
    
    
    
    67,669
    
    
    
    (30,000
    )
    
    
    37,669
    
    
    
    12.0
    %Total
    
    
    22
    
    
    $
    192,223
    
    
    
    40
    
    
    $
    421,631
    
    
    
    62
    
    
    $
    613,854
    
    
    $
    (300,310
    )
    
    $
    313,544
    
    
    
    100.0
    %% of Portfolio
    
    
    
    
    
    
    31.3
    %
    
    
    
    
    
    
    68.7
    %
    
    
    
    
    
    
    100.0
    %Weighted Average Rate
    
    
    
    
    11.71
    %
    
    
    
    
    
    
    12.39
    %
    
    
    
    
    
    
    12.18
    %Number of Loans
    
    
    
    
    
    
    22
    
    
    
    
    
    
    
    40
    
    
    
    
    
    
    
    62Average Principal
    
    
    
    
    
    $
    8,737
    
    
    
    
    
    
    $
    10,541
    
    
    
    
    
    
    $
    9,901
  13




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IMH SECURED LOAN FUND, LLC
 NOTE 4  MORTGAGE LOANS, LOAN PARTICIPATIONS AND LOAN SALES  CONTINUED
  Loan Maturities and Loans in Default
  September 30, 2009Quarter
    
    Amount
    
    
    Percent
    
    
    #Matured
    
    $
    370,255
    
    
    
    66.8
    %
    
    
    36Q4 2009
    
    
    20,209
    
    
    
    3.7
    %
    
    
    3Q1 2010
    
    
    2,030
    
    
    
    0.4
    %
    
    
    3Q3 2010
    
    
    56,116
    
    
    
    10.1
    %
    
    
    10Q1 2011
    
    
    6,583
    
    
    
    1.2
    %
    
    
    3Q1 2012
    
    
    392
    
    
    
    0.1
    %
    
    
    1Q3 2012
    
    
    97,771
    
    
    
    17.7
    %
    
    
    2Total
    
    
    553,356
    
    
    
    100.0
    %
    
    
    58Less: Allowance for Credit Loss
    
    
    (337,000
    )Net Carrying Value
    
    $
    216,356
   14




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##### Table of Contents



IMH SECURED LOAN FUND, LLC
 NOTE 4  MORTGAGE LOANS, LOAN PARTICIPATIONS AND LOAN SALES  CONTINUED
    Percent of
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Non-AccruedOutstanding
    
    
    
    
    
    
    Outstanding
    
    
    Allowance for
    
    
    Net Carrying
    
    
    Accrued
    
    
    NotePrincipal
    
    
    #
    
    
    Principal
    
    
    Credit Loss
    
    
    Amount
    
    
    Interest
    
    
    Interest
    
    
    TotalArizona
    
    
    48.3
    %
    
    
    23
    
    
    $
    228,873
    
    
    $
    (173,523
    )
    
    $
    55,350
    
    
    $
    4,136
    
    
    $
    10,737
    
    
    $
    70,223Idaho
    
    
    10.5
    %
    
    
    2
    
    
    
    49,590
    
    
    
    (39,090
    )
    
    
    10,500
    
    
    
    1,948
    
    
    
    4,490
    
    
    
    16,938California
    
    
    36.1
    %
    
    
    17
    
    
    
    171,133
    
    
    
    (113,678
    )
    
    
    57,455
    
    
    
    3,655
    
    
    
    12,611
    
    
    
    73,721Texas
    
    
    2.3
    %
    
    
    3
    
    
    
    11,102
    
    
    
    (4,493
    )
    
    
    6,609
    
    
    
    427
    
    
    
    849
    
    
    
    7,885Nevada
    
    
    1.7
    %
    
    
    1
    
    
    
    7,978
    
    
    
    (2,670
    )
    
    
    5,308
    
    
    
    319
    
    
    
    715
    
    
    
    6,342New Mexico
    
    
    1.1
    %
    
    
    2
    
    
    
    5,240
    
    
    
    (1,182
    )
    
    
    4,058
    
    
    
    21
    
    
    
    435
    
    
    
    4,514100.0
    %
    
    
    48
    
    
    $
    473,916
    
    
    $
    (334,636
    )
    
    $
    139,280
    
    
    $
    10,506
    
    
    $
    29,837
    
    
    $
    179,623
  Fair Value Measurement
   15




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##### Table of Contents



IMH SECURED LOAN FUND, LLC
 NOTE 4  MORTGAGE LOANS, LOAN PARTICIPATIONS AND LOAN SALES  CONTINUED
   Level 1
    
    
    
    Valuations based on unadjusted quoted prices in active markets for identical assets or liabilities that we have the ability to access at the measurement date;Level 2
    
    
    
    Valuations based on quoted market prices for similar instruments in active markets, quoted prices for identical or similar instruments in markets that are not active or models for which all significant inputs are observable in the market either directly or indirectly; andLevel 3
    
    
    
    Valuations based on models that use inputs that are unobservable in the market and significant to the fair value measurement.
      16




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##### Table of Contents



IMH SECURED LOAN FUND, LLC
 NOTE 4  MORTGAGE LOANS, LOAN PARTICIPATIONS AND LOAN SALES  CONTINUED
     1.
    
    Reviewing the status of each portfolio loan  to ascertain our view of the likelihood that we
will collect all amounts due under the terms of such loans at maturity based on current
real estate and credit market conditions.
 2.
    
    For loans whose collection we deem to be unlikely, we are reviewing the portfolio loans to
ascertain how recently the latest valuation of the underlying collateral was performed.
 3.
    
    Subjecting the entire loan  portfolio to independent third party valuation as of September
30, 2009.
 4.
    
    Utilizing the services of Cushman & Wakefield, a nationally recognized
valuation firm, and other valuation firms to perform a valuation analysis for the selected
projects using the valuation criteria under a Level 2 valuation approach. Cushman &
Wakefield valued approximately 89% of the outstanding principal balance of the loan
portfolio while other valuation firms valued the remaining 11%. For those valuations
performed by valuation firms other than Cushman & Wakefield, we expect to utilize Cushman &
Wakefield to perform a review of the valuations and reports.
  17




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##### Table of Contents



IMH SECURED LOAN FUND, LLC
 NOTE 4  MORTGAGE LOANS, LOAN PARTICIPATIONS AND LOAN SALES  CONTINUED
 5.
    
    We understand it is
customary for some independent valuation firms to use the term market
value when valuing real property interests. We recognize that there are differences in
the market value and fair value definitions, but in many instances,
the reported results are identical. The Manager believes that it can reliably use market
valuations when making decisions with respect to fair value of our assets for financial
reporting purposes. Level 3 inputs for valuation are provided for market circumstances in
which Level 1 and Level 2 inputs are not reliably available. From the information
received from the valuation firms engaged by the Fund, each asset, and its corresponding
valuation, was individually reviewed by us and the valuations were interpreted under the
definition of fair value under applicable accounting guidance.
 6.
    
    Using observable and unobservable inputs available, and depending on the development
status of the collateral, we are in the process of performing analyses on selected assets
utilizing a Level 3 residual analysis approach to determine the projected cash proceeds
expected to be received for such projects. This analysis includes estimating project development costs, projected carrying
costs, such as property taxes, and estimated disposal costs. The cash flow streams will
then be discounted to present value to derive fair value.
  
    
    Very few of the precedent transactions that were analyzed satisfied the market value
and fair value requirement that the price reflect that of an orderly
transaction, rather many of the sales were made under duress or in
markets in turmoil.
 
    
    Inputs for use in Level 2 and/or Level 3 models were reported by the valuation firms to
be inconsistent and reflective of a distressed market that has not yet established current
norms for inputs into discounted cash flow or other financial models such as absorption
rates and timing, unit pricing and trends, discount rate, risk adjustment processes, or
the like.
 
    
    A distinction was made between owners under duress and properties under duress. Market
values are determined based on the determined highest and best use of the real property
being valued. When owners are under duress, prices of transactions in which they are
involved must be viewed as at least potentially subject to duress as well. The valuation
firms took this distinction into account in arriving at highest and best use conclusions
and selecting appropriate valuation methodologies.
 
    
    The highest and best use for the majority of real estate collateral subject to
third-party valuation was deemed to be held for investment and/or future development,
rather than being subject to immediate development and/or sale. For each of these assets,
a sales comparison approach using available data was used as the valuation methodology.
 
    
    For the projects which included either unentitled or entitled land lacking any vertical
or horizontal improvements, given the current distressed state of the real estate and
credit markets, the development approach was deemed to be unsupportable because Level 2
market participant data were insufficient and/or Level 3 criteria was not reliably
available from the valuation firms market research; the highest and best use standard
in these instances required such property to be classified as held for investment
purposes until market conditions provide observable development activity to support either a Level 2 or a Level 3 valuation model for the development of the planned site. As a
result, the valuation firms used a sales comparison approach using
available data to determine market value.
  18




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##### Table of Contents



IMH SECURED LOAN FUND, LLC
 NOTE 4  MORTGAGE LOANS, LOAN PARTICIPATIONS AND LOAN SALES  CONTINUED
 
    
    For the projects containing partially or fully developed lots, the development approach
was utilized, with assumptions made for pricing trends, absorption projections, holding
costs, and the relative risk given these assumptions. The assumptions used by the
valuation firms were based on currently observable available market data.
 
    
    For operating properties, the income approach, using the direct capitalization and
discounted cash flow methods was used by the valuation firms. The anticipated future cash
flows and a reversionary value were discounted to an opinion of net present value at a
chosen yield rate. The assumptions used by the valuation firms were based on currently
observable available market data.
 
    
    For projects in which we have received a recent third party offer to buy our loan, or the
borrower has received a recent third party offer to buy the related project, we utilized the offer amount in cases in which the offer exceeded
the valuation conclusion reached by the independent valuation firms.
  
    
    For collateral to be developed, the initial unit sales price utilized was based on
local market, comparable prices from non-distressed pricing from prior periods utilizing
observable and unobservable data points, generally discounted by 20% or more. In general,
management assumed a price escalation utilizing the low end of a historical 3-year average
look back for the last 10 years. We considered this a fair exchange price in an orderly
transaction between market participants to sell the asset, assuming its highest and best
use as determined by management, in the principal or most advantageous market for the
asset.
 
    
    For collateral to be developed, the development costs, operating and selling cost
assumptions  we made were based on observable and unobservable cost estimates obtained from
a cross section of industry experts and market participants.
 
    
    For collateral consisting of partially complete or finished lots, development costs,
operating and selling cost assumptions were based on observable and unobservable
cost estimates obtained from a cross section of industry experts and market participants.
 
    
    For collateral whose development is complete or nearly complete which are expected to
be leased initially to allow for stabilization of market prices before being sold, we
utilized operating revenue and costs for comparable projects using current operating data
obtained by us.
 
    
    Based on the resulting net cash flows derived from the utilization of the above
assumptions, the Manager applied risk-adjusted annual discount rates ranging from 20% to 25% to the
net cash flows, depending on the projected build-out term, the project type, the location
and assumed project risk.
  19




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##### Table of Contents



IMH SECURED LOAN FUND, LLC
 NOTE 4  MORTGAGE LOANS, LOAN PARTICIPATIONS AND LOAN SALES  CONTINUED
 
    
    Assets acquired through foreclosure are subject to different accounting guidance which
requires us to account for these real estate assets received in satisfaction of the
related receivable by writing them down to estimated fair value as of the date of
foreclosure. An impairment charge is recorded when circumstances
indicate that the carrying
amount of the property is greater than the sum of the undiscounted
cash flows expected to result from the use and eventual disposition
of the property.
      2009Balance at
beginning of year
    
    $
    300,310Valuation charge for current fair value
    
    
    82,000Transferred to other accounts
    
    
    (45,310
    )Balance at end of period
    
    $
    337,000
  20




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##### Table of Contents



IMH SECURED LOAN FUND, LLC
 NOTE 4  MORTGAGE LOANS, LOAN PARTICIPATIONS AND LOAN SALES  CONTINUED
 Loan Classifications
  September 30, 2009
    
    
    December 31, 2008Amount
    
    
    %
    
    
    #
    
    
    Amount
    
    
    %
    
    
    #Pre-entitled Land:Held for Investment
    
    $
    13,834
    
    
    
    2.5
    %
    
    
    3
    
    
    $
    7,178
    
    
    
    1.2
    %
    
    
    2Processing Entitlements
    
    
    193,087
    
    
    
    34.9
    %
    
    
    10
    
    
    
    200,902
    
    
    
    32.8
    %
    
    
    12206,921
    
    
    
    37.4
    %
    
    
    13
    
    
    
    208,080
    
    
    
    34.0
    %
    
    
    14Entitled Land:Held for Investment
    
    
    113,117
    
    
    
    20.4
    %
    
    
    16
    
    
    
    114,307
    
    
    
    18.6
    %
    
    
    17Infrastructure under Construction
    
    
    69,834
    
    
    
    12.6
    %
    
    
    5
    
    
    
    57,908
    
    
    
    9.4
    %
    
    
    4Improved and Held for Vertical Construction
    
    
    46,857
    
    
    
    8.5
    %
    
    
    4
    
    
    
    54,486
    
    
    
    8.9
    %
    
    
    5229,808
    
    
    
    41.5
    %
    
    
    25
    
    
    
    226,701
    
    
    
    36.9
    %
    
    
    26Construction & Existing Structures:New Structure  Construction in-process
    
    
    37,110
    
    
    
    6.7
    %
    
    
    15
    
    
    
    43,814
    
    
    
    7.1
    %
    
    
    14Existing Structure Held for Investment
    
    
    23,632
    
    
    
    4.3
    %
    
    
    4
    
    
    
    37,482
    
    
    
    6.1
    %
    
    
    5Existing Structure  Improvements
    
    
    55,885
    
    
    
    10.1
    %
    
    
    1
    
    
    
    97,777
    
    
    
    15.9
    %
    
    
    3116,627
    
    
    
    21.1
    %
    
    
    20
    
    
    
    179,073
    
    
    
    29.1
    %
    
    
    22Total
    
    
    553,356
    
    
    
    100.0
    %
    
    
    58
    
    
    
    613,854
    
    
    
    100.0
    %
    
    
    62Less: Allowance for Credit Loss
    
    
    (337,000
    )
    
    
    
    
    
    
    
    
    
    
    (300,310
    )Net Carrying Value
    
    $
    216,356
    
    
    
    
    
    
    
    
    
    
    $
    313,544
  September 30, 2009
    
    
    December 31, 2008Amount
    
    
    %
    
    
    #
    
    
    Amount
    
    
    %
    
    
    #Residential
    
    $
    276,417
    
    
    
    50.0
    %
    
    
    37
    
    
    $
    278,644
    
    
    
    45.4
    %
    
    
    37Mixed Use
    
    
    183,617
    
    
    
    33.2
    %
    
    
    8
    
    
    
    206,691
    
    
    
    33.7
    %
    
    
    11Commercial
    
    
    92,252
    
    
    
    16.7
    %
    
    
    12
    
    
    
    127,449
    
    
    
    20.8
    %
    
    
    13Industrial
    
    
    1,070
    
    
    
    0.1
    %
    
    
    1
    
    
    
    1,070
    
    
    
    0.1
    %
    
    
    1Total
    
    
    553,356
    
    
    
    100.0
    %
    
    
    58
    
    
    
    613,854
    
    
    
    100.0
    %
    
    
    62Less: Allowance for Credit Loss
    
    
    (337,000
    )
    
    
    
    
    
    
    
    
    
    
    (300,310
    )Net Carrying Value
    
    $
    216,356
    
    
    
    
    
    
    
    
    
    
    $
    313,544
   21




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##### Table of Contents



IMH SECURED LOAN FUND, LLC
 NOTE 4  MORTGAGE LOANS, LOAN PARTICIPATIONS AND LOAN SALES  CONTINUED
 Geographic Diversification
  September 30, 2009
    
    
    December 31, 2008Oustanding
    
    
    Allowance for
    
    
    Net Carrying
    
    
    
    
    
    
    
    
    
    
    Oustanding
    
    
    Allowance for
    
    
    Net CarryingPrincipal
    
    
    Credit Loss
    
    
    Amount
    
    
    Percent
    
    
    #
    
    
    Principal
    
    
    Credit Loss
    
    
    Amount
    
    
    Percent
    
    
    #Arizona
    
    $
    290,778
    
    
    $
    (175,887
    )
    
    $
    114,891
    
    
    
    53.0
    %
    
    
    29
    
    
    $
    294,362
    
    
    $
    (128,499
    )
    
    $
    165,863
    
    
    
    52.9
    %
    
    
    31California
    
    
    181,023
    
    
    
    (113,678
    )
    
    
    67,345
    
    
    
    31.1
    %
    
    
    20
    
    
    
    177,255
    
    
    
    (124,422
    )
    
    
    52,833
    
    
    
    16.9
    %
    
    
    20New Mexico
    
    
    5,240
    
    
    
    (1,182
    )
    
    
    4,058
    
    
    
    1.9
    %
    
    
    2
    
    
    
    5,240
    
    
    
    (637
    )
    
    
    4,603
    
    
    
    1.5
    %
    
    
    2Texas
    
    
    11,102
    
    
    
    (4,493
    )
    
    
    6,609
    
    
    
    3.1
    %
    
    
    3
    
    
    
    55,825
    
    
    
    (5,781
    )
    
    
    50,044
    
    
    
    16.0
    %
    
    
    4Idaho
    
    
    49,590
    
    
    
    (39,090
    )
    
    
    10,500
    
    
    
    4.9
    %
    
    
    2
    
    
    
    49,578
    
    
    
    (38,458
    )
    
    
    11,120
    
    
    
    3.5
    %
    
    
    2Minnesota
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    0.0
    %
    
    
    0
    
    
    
    16,590
    
    
    
    
    
    
    
    16,590
    
    
    
    5.3
    %
    
    
    1Nevada
    
    
    7,978
    
    
    
    (2,670
    )
    
    
    5,308
    
    
    
    2.5
    %
    
    
    1
    
    
    
    7,969
    
    
    
    (1,876
    )
    
    
    6,093
    
    
    
    1.9
    %
    
    
    1Utah
    
    
    7,645
    
    
    
    
    
    
    
    7,645
    
    
    
    3.5
    %
    
    
    1
    
    
    
    7,035
    
    
    
    (637
    )
    
    
    6,398
    
    
    
    2.0
    %
    
    
    1Total
    
    $
    553,356
    
    
    $
    (337,000
    )
    
    $
    216,356
    
    
    
    100.0
    %
    
    
    58
    
    
    $
    613,854
    
    
    $
    (300,310
    )
    
    $
    313,544
    
    
    
    100.0
    %
    
    
    62
 Borrower Concentrations
  Mortgage Loan Participations and Whole Loans Sold
    22




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##### Table of Contents



IMH SECURED LOAN FUND, LLC
 NOTE 5  REAL ESTATE HELD FOR DEVELOPMENT OR SALE
         23




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##### Table of Contents



IMH SECURED LOAN FUND, LLC
 NOTE 6  MEMBER DISTRIBUTIONS AND REDEMPTIONS
 Member Distributions Reinvested and Distributions Payable to Members
   Redemptions
  NOTE 7  MANAGEMENT FEES AND RELATED PARTY ACTIVITY
 Management Fees and Other Amounts Due to Manager
     24




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##### Table of Contents



IMH SECURED LOAN FUND, LLC
 NOTE 7  MANAGEMENT FEES AND RELATED PARTY ACTIVITY  CONTINUED
    Related Party Investments and Borrowings
   25




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##### Table of Contents



IMH SECURED LOAN FUND, LLC
 NOTE 8  COMMITMENTS AND CONTINGENCIES
  September 30, 2009
    
    
    December 31, 2008Loans Held
    
    
    Loans Held
    
    
    
    
    
    
    Loans Held
    
    
    Loans Heldto Maturity
    
    
    for Sale
    
    
    Total
    
    
    to Maturity
    
    
    for Sale
    
    
    TotalUndispersed
Loans-in-process per Note Agreement
    
    $
    50,483
    
    
    $
    2,672
    
    
    $
    53,155
    
    
    $
    66,035
    
    
    $
    32,633
    
    
    $
    98,668Less: amounts not to be funded
    
    
    (46,408
    )
    
    
    
    
    
    
    (46,408
    )
    
    
    (39,461
    )
    
    
    (13,767
    )
    
    
    (53,228
    )Undispersed
Loans-in-process per Financial Statements
    
    $
    4,075
    
    
    $
    2,672
    
    
    $
    6,747
    
    
    $
    26,574
    
    
    $
    18,866
    
    
    $
    45,440
  9/30/09
    
    
    12/31/08Loans-in-Process Allocation:Construction Commitments
    
    $
    1,280
    
    
    $
    41,085Unfunded Interest Reserves
    
    
    
    
    
    
    4,314Deferred Loan Fees due to Manager
    
    
    4,760
    
    
    
    Reserve for Protective Advances
    
    
    669
    
    
    
    Taxes and Other
    
    
    38
    
    
    
    41Total Loan-in-Process
    
    $
    6,747
    
    
    $
    45,440
    26




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##### Table of Contents



IMH SECURED LOAN FUND, LLC
 NOTE 8  COMMITMENTS AND CONTINGENCIES  CONTINUED
         27




---



##### Table of Contents



Item 2.
    
    Managements Discussion and Analysis of Financial Condition and Results of Operations.
  Forward-Looking Statements
   
    
    As a result of the suspension of certain of our activities, the Manager believes that
both our ability and the Managers ability to continue as a going concern for the next 12
months is predicated on the successful completion of one or more initiatives that we are
currently evaluating. Despite the cost-savings initiatives we have undertaken, the Manager
can provide us with no assurance that its liquidity situation will improve in 2009 or that the
Manager will be able to continue as a going concern. If the Manager is unable to continue
in its capacity as our Manager, a replacement manager will need to be identified pursuant
to Article 11 of the Operating Agreement, which could result in a significantly different
and higher management fee and expense structure to us.
 
    
    We have been and will continue to be adversely affected by the general economic slowdown
and recession in the U.S. and abroad.
 
    
    We are subject to the risk that, despite recent actions and proposals by the U.S.
government and governments around the world, the economy and real estate and other markets
will not improve, which could continue to adversely affect our ability to sell or dispose
of properties we own and the ability of our borrowers to repay our loans or obtain take-out
financing in a timely manner, on reasonable terms, or at all, which would adversely affect
our liquidity and operating results.
  28




---



##### Table of Contents




    
    As allowed by the Operating Agreement, effective October 1, 2008, the Manager elected to
suspend certain of our activities, including the acceptance of any additional investments,
the payment of outstanding redemption requests, the acceptance of new redemption requests,
and the identification and funding of new loans (although we may finance new loans in
connection with the sale of collateral under existing loans or the sale of real estate
owned). This election was made in order to seek to preserve our capital and to seek to
stabilize our operating activities and liquid assets in order to assist us in our ability
to meet future obligations, including those pursuant to current loan commitments. There
can be no assurance that our activities will resume in the foreseeable future, if ever.
 
    
    If our liquidity continues to dissipate and we are unable to meet our obligations, we
may be forced to sell certain assets for a price at or below their current book value,
which could result in an additional loss. While we have developed formal disposition plans for selected
assets, the Manager continues to receive unsolicited offers from third parties for various
assets. While negotiations may ensue upon receipt of such unsolicited offers, such assets
are not deemed to be held for sale for financial reporting purposes.
 
    
    The Manager and its affiliates are subject to oversight by various state and federal
regulatory authorities, including, but not limited to, the ACC, the Arizona Department of
Revenue, the Arizona Department of Financial Institutions (Banking), the SEC and the
Internal Revenue Service, and there is a risk that examinations or enforcement or related
activities by any such agency could have a material adverse effect on us.
 
    
    Our units lack liquidity and marketability and our Members cannot sell their units or
have their units redeemed. As a result, our Members may lose their entire investment or
may not be able to sell their units or have them redeemed in a timely manner, or at all, or
at the price they paid.
 
    
    We are subject to risks generally associated with the ownership of real estate-related
assets, including changing economic conditions, environmental risks, unforeseen statutory
and regulatory changes, the cost of and ability to obtain insurance and risks related to
developing and leasing of properties.
 
    
    As a mortgage lender, we are subject to a variety of external forces that could have a
material adverse effect on our operations and results, including, without limitation,
fluctuations in interest rates, fluctuations in economic conditions (which are exacerbated
by our limited geographic diversity), and the effect that regulators or bankruptcy courts
could have on our operations and rights as a secured lender.
 
    
    Our portfolio loans, which are not guaranteed by any government agency, are risky and are not sold
on any secondary market, and the underwriting standards that we previously utilized may not
have been sufficient to protect Members from loan defaults or ensure that sufficient
collateral, including collateral pledged by guarantors, will exist to protect Members from
any such defaults.
 
    
    Our borrowers are exposed to various risks associated with owning real estate, and
expected and unexpected costs or liabilities, including costs of holding such real estate,
could reduce the likelihood that our borrowers will be able to develop or sell the real
estate, which could increase the likelihood that our borrowers will default on our portfolio loans or
may require us to advance additional amounts to preserve and protect our interest in the
related assets.
 
    
    Real estate assets acquired in foreclosure or through other means are generally
non-earning assets that reduce the yield to investors, if any. Moreover, the ultimate
disposition and liquidation of such assets may not occur for an extended period of time, which would adversely affect our
liquidity.
  29




---



##### Table of Contents




    
    We rely exclusively on our Manager to manage our investments and conduct our operations.
Our Members have no right to participate in decisions relating to the activities of our
Manager or, in general, us.
 
    
    We are obligated to pay certain fees to our Manager, which may adversely
impact our operating results and reduce cash available for other purposes.
 
    
    Our Manager faces conflicts of interest, including, without limitation, competing
demands upon its time and its involvement with other activities, all of which could have an adverse effect on us.
 
    
    As a publicly reporting company, we are required to divert considerable resources to new
compliance initiatives, including refining, maintaining, testing and reporting on our
disclosure controls and procedures and internal control over financial reporting, as well
as compliance with accounting and reporting initiatives relating to valuation of our
assets.
 
    
    The suspension of certain of our activities may persist for an extended period of time,
and we may not resume historical activities to the same level or at all.
 
    
    There are material income tax and retirement plan risks associated with ownership of our
units.
 
    
    There is a risk that we may modify and refinance existing portfolio loans which currently have
interest rate floors to loans with lower rates which could reduce mortgage income.
   30




---



##### Table of Contents



Overview of the Business
  Recent Events and Response
        31




---



##### Table of Contents



Insure that the Fund maintains sufficient cash to cover all construction obligations.
  32




---



##### Table of Contents



Obtain and maintain sufficient cash reserves in the Fund to complete improvements to portfolio
assets and take appropriate actions to preserve and enhance value.
 Resume periodic distributions and the return of investor capital.
  
    
    suspend accepting any additional capital contributions;
 
    
    suspend reinvesting monthly distributions, if any, and cause all future monthly
distributions, if any, to be paid in cash;
 
    
    cancel all pending redemption requests, and suspend the acceptance of any new
redemption requests;
 
    
    suspend accepting any new loan requests (excluding financing of new loans in
connection with the sale of collateral under existing loans or the sale of real estate
owned); and
 
    
    effective May 2009, suspend monthly distributions to Members.
   33




---



##### Table of Contents



34




---



##### Table of Contents



Going Concern
   
    
    Implemented a comprehensive cost reduction program, including a reduction in staff.
The reduction in staff affected nearly 60% of the Managers employees while preserving
core functionality in all material operational areas. At this time, the Manager has
stabilized monthly operating costs at approximately $400 per month.
 
    
    On-going collaboration with investment banking firms to analyze and seek to close
financing alternatives.
 
    
    The continued exploration of opportunities through which the Manager can continue to
participate in the capital markets, including, without limitation, the use of
additional funding vehicles to capitalize on what the Manager believes are business
opportunities arising from the disruptions in the capital and credit markets.
 
    
    The engagement in on-going negotiations with creditors to seek to defer or otherwise
restructure existing liabilities of the Manager.
 
    
    The consideration of other initiatives, to seek to insure the continued viability of the
Manager as an operating entity.
   35




---



##### Table of Contents



Selected Financial Data
  (Unaudited)
    
    
    (Unaudited)
    
    
    As of and forAs of and for the Nine
    
    
    As of and for the Three
    
    
    the Year EndedMonths Ended September 30,
    
    
    Months Ended September 30,
    
    
    December 31,2009
    
    
    2008
    
    
    2009
    
    
    2008
    
    
    2008Cash and cash equivalents
    
    $
    2,463
    
    
    $
    57,766
    
    
    $
    2,463
    
    
    $
    57,766
    
    
    $
    23,815Total assets
    
    $
    334,577
    
    
    $
    709,120
    
    
    $
    334,577
    
    
    $
    709,120
    
    
    $
    414,804Interest income and fees
    
    $
    20,750
    
    
    $
    51,208
    
    
    $
    3,155
    
    
    $
    17,536
    
    
    $
    67,420Management fees
    
    $
    481
    
    
    $
    819
    
    
    $
    62
    
    
    $
    300
    
    
    $
    1,139Interest expense
    
    $
    217
    
    
    $
    78
    
    
    $
    115
    
    
    $
    
    
    
    $
    78Net earnings (loss)
    
    $
    (75,174
    )
    
    $
    7,174
    
    
    $
    (89,391
    )
    
    $
    (25,749
    )
    
    $
    (258,287
    )Net distributions to Members
    
    $
    11,706
    
    
    $
    49,163
    
    
    $
    
    
    
    $
    16,627
    
    
    $
    64,051Net Member distributions as a % of net earnings (loss)
    
    
    115.6
    %
    
    
    685.3
    %
    
    
    0.0
    %
    
    
    164.6
    %
    
    
    124.8
    %Net earnings (loss) allocated to Members per weighted
average membership units outstanding
    
    $
    (1,029.24
    )
    
    $
    109.32
    
    
    $
    (1,233.88
    )
    
    $
    (363.65
    )
    
    $
    (3,835.96
    )Net distributions to Members per weighted average
membership units
    
    $
    160.27
    
    
    $
    749.20
    
    
    $
    
    
    
    $
    234.84
    
    
    $
    951.27Average annualized distribution yield to Members
    
    
    2.14
    %
    
    
    9.93
    %
    
    
    0.00
    %
    
    
    9.23
    %
    
    
    9.45
    %Member Equity Related:Retained earnings (Accumulated deficit)
    
    $
    (409,212
    )
    
    $
    (41,984
    )
    
    $
    (409,212
    )
    
    $
    (41,984
    )
    
    $
    (322,332
    )Total Members equity
    
    $
    321,171
    
    
    $
    688,400
    
    
    $
    321,171
    
    
    $
    688,400
    
    
    $
    408,051Number of Member accounts
    
    
    4,735
    
    
    
    4,732
    
    
    
    4,735
    
    
    
    4,732
    
    
    
    4,735Average Member account balance
    
    $
    68
    
    
    $
    145
    
    
    $
    68
    
    
    $
    145
    
    
    $
    86States in which the Fund has Members
    
    
    49
    
    
    
    49
    
    
    
    49
    
    
    
    49
    
    
    
    49Member investments (excluding reinvestments)
    
    $
    
    
    
    $
    250,941
    
    
    $
    
    
    
    $
    84,070
    
    
    $
    250,871Distributions to Members
    
    $
    11,706
    
    
    $
    25,971
    
    
    $
    
    
    
    $
    10,500
    
    
    $
    40,860Member distributions reinvested
    
    $
    
    
    
    $
    23,192
    
    
    $
    
    
    
    $
    6,127
    
    
    $
    23,191Retained earnings additions (distributed)
    
    $
    (86,880
    )
    
    $
    (41,989
    )
    
    $
    (89,392
    )
    
    $
    (42,376
    )
    
    $
    (322,338
    )% of total distributions reinvested
    
    
    N/A
    
    
    
    47.17
    %
    
    
    N/A
    
    
    
    36.86
    %
    
    
    36.21
    %Redemptions
    
    $
    
    
    
    $
    120,533
    
    
    $
    
    
    
    $
    36,640
    
    
    $
    120,506Redemptions as % of new investment (incl. reinvestments)
    
    
    N/A
    
    
    
    43.97
    %
    
    
    N/A
    
    
    
    40.62
    %
    
    
    43.97
    %Loan Related:Note balances originated
    
    $
    392
    
    
    $
    327,662
    
    
    $
    
    
    
    $
    92,394
    
    
    $
    329,952Number of notes originated
    
    
    1
    
    
    
    22
    
    
    
    
    
    
    
    11
    
    
    
    23Average note balance originated
    
    $
    392
    
    
    $
    14,894
    
    
    $
    
    
    
    $
    8,399
    
    
    $
    14,346Net loan carrying values
    
    $
    216,356
    
    
    $
    551,315
    
    
    $
    216,356
    
    
    $
    551,315
    
    
    $
    313,544Number of loans outstanding
    
    
    58
    
    
    
    63
    
    
    
    58
    
    
    
    63
    
    
    
    62Average loan carrying value
    
    $
    3,730
    
    
    $
    8,751
    
    
    $
    3,730
    
    
    $
    8,751
    
    
    $
    5,057% of Portfolio Principal  Fixed interest rate
    
    
    50.1
    %
    
    
    30.5
    %
    
    
    50.1
    %
    
    
    30.5
    %
    
    
    31.3
    %Number of fixed rate loans
    
    
    25
    
    
    
    23
    
    
    
    25
    
    
    
    23
    
    
    
    22Weighted average interest rate  Fixed
    
    
    10.26
    %
    
    
    11.03
    %
    
    
    10.26
    %
    
    
    11.03
    %
    
    
    11.71
    %% of portfolio  Variable interest rate
    
    
    49.9
    %
    
    
    69.5
    %
    
    
    49.9
    %
    
    
    69.5
    %
    
    
    68.7
    %Number of variable rate loans
    
    
    33
    
    
    
    40
    
    
    
    33
    
    
    
    40
    
    
    
    40Weighted average interest rate  Variable
    
    
    12.87
    %
    
    
    12.37
    %
    
    
    12.87
    %
    
    
    12.37
    %
    
    
    12.39
    %Principal balance % by state:Arizona
    
    
    53.0
    %
    
    
    48.4
    %
    
    
    53.0
    %
    
    
    48.4
    %
    
    
    47.9
    %California
    
    
    31.1
    %
    
    
    27.7
    %
    
    
    31.1
    %
    
    
    27.7
    %
    
    
    28.9
    %New Mexico
    
    
    1.9
    %
    
    
    1.0
    %
    
    
    1.9
    %
    
    
    1.0
    %
    
    
    0.9
    %Texas
    
    
    3.1
    %
    
    
    9.8
    %
    
    
    3.1
    %
    
    
    9.8
    %
    
    
    9.1
    %Idaho
    
    
    4.9
    %
    
    
    7.6
    %
    
    
    4.9
    %
    
    
    7.6
    %
    
    
    8.1
    %Minnesota
    
    
    0.0
    %
    
    
    2.9
    %
    
    
    0.0
    %
    
    
    2.9
    %
    
    
    2.7
    %Nevada
    
    
    2.5
    %
    
    
    1.4
    %
    
    
    2.5
    %
    
    
    1.4
    %
    
    
    1.3
    %Utah
    
    
    3.5
    %
    
    
    1.2
    %
    
    
    3.5
    %
    
    
    1.2
    %
    
    
    1.1
    %Interest payments over 30 days delinquent
    
    $
    7,687
    
    
    $
    41
    
    
    $
    7,687
    
    
    $
    41
    
    
    $
    1,134Loans past scheduled maturity
    
    
    36
    
    
    
    15
    
    
    
    36
    
    
    
    15
    
    
    
    24Principal balance of loans past scheduled maturity
    
    $
    370,255
    
    
    $
    94,529
    
    
    $
    370,255
    
    
    $
    94,529
    
    
    $
    210,198Number of loans in non accrual status
    
    
    43
    
    
    
    7
    
    
    
    43
    
    
    
    7
    
    
    
    11Principal balance of loans in non accrual status
    
    $
    450,568
    
    
    $
    64,631
    
    
    $
    450,568
    
    
    $
    64,631
    
    
    $
    95,624Allowance for credit losses
    
    $
    337,000
    
    
    $
    45,440
    
    
    $
    337,000
    
    
    $
    45,440
    
    
    $
    300,310Allowance for credit losses as % of loan principal outstanding
    
    
    60.9
    %
    
    
    8.2
    %
    
    
    60.9
    %
    
    
    8.2
    %
    
    
    48.9
    %
 *
    
    Where applicable, quarterly results are annualized to allow for compatability with annual
results.  36




---



##### Table of Contents



Results of Operations for the Nine and Three Months Ended September 30, 2009 and 2008
  Revenues
 Nine Months Ended September 30,
    
    
    Three Months Ended September 30,2009
    
    
    2008
    
    
    $ Change
    
    
    % Change
    
    
    2009
    
    
    2008
    
    
    $ Change
    
    
    % ChangeInterest and Fee Income:Mortgage Loans
    
    $
    20,256
    
    
    $
    49,419
    
    
    $
    (29,163
    )
    
    
    (59.0
    %)
    
    $
    2,697
    
    
    $
    17,069
    
    
    $
    (14,372
    )
    
    
    (84.2
    %)Investments and Money Market Accounts and Other Income
    
    
    494
    
    
    
    1,789
    
    
    
    (1,295
    )
    
    
    (72.4
    %)
    
    
    458
    
    
    
    467
    
    
    
    (9
    )
    
    
    (1.9
    %)Total Interest, Fees and Other Income
    
    $
    20,750
    
    
    $
    51,208
    
    
    $
    (30,458
    )
    
    
    (59.5
    %)
    
    $
    3,155
    
    
    $
    17,536
    
    
    $
    (14,381
    )
    
    
    (82.0
    %)
   37




---



##### Table of Contents



Expenses
 Nine Months Ended September 30,
    
    
    Three Months Ended September 30,2009
    
    
    2008
    
    
    $ Change
    
    
    % Change
    
    
    2009
    
    
    2008
    
    
    $ Change
    
    
    % ChangeExpenses:Management Fees
    
    $
    481
    
    
    $
    819
    
    
    $
    (338
    )
    
    
    (41.3
    %)
    
    $
    62
    
    
    $
    300
    
    
    $
    (238
    )
    
    
    (79.3
    %)Default Related and Other Fund Expenses
    
    
    579
    
    
    
    503
    
    
    
    76
    
    
    
    15.1
    %
    
    
    251
    
    
    
    418
    
    
    
    (167
    )
    
    
    (40.0
    %)Operating Expenses for Real Estate Owned
    
    
    2,817
    
    
    
    62
    
    
    
    2,755
    
    
    
    4,443.5
    %
    
    
    1,477
    
    
    
    62
    
    
    
    1,415
    
    
    
    2,282.3
    %Professional Fees
    
    
    1,830
    
    
    
    142
    
    
    
    1,688
    
    
    
    1,188.7
    %
    
    
    641
    
    
    
    75
    
    
    
    566
    
    
    
    754.7
    %Interest Expense:Borrowings from Fund Manager
    
    
    217
    
    
    
    
    
    
    
    217
    
    
    
    N/A
    
    
    
    115
    
    
    
    
    
    
    
    115
    
    
    
    N/ABorrowings on Note Payable
    
    
    
    
    
    
    78
    
    
    
    (78
    )
    
    
    (100.0
    %)
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    N/AInterest Expense
    
    
    217
    
    
    
    78
    
    
    
    139
    
    
    
    178.2
    %
    
    
    115
    
    
    
    
    
    
    
    115
    
    
    
    N/AValuation Provision Charge
    
    
    90,000
    
    
    
    42,430
    
    
    
    47,570
    
    
    
    112.1
    %
    
    
    90,000
    
    
    
    42,430
    
    
    
    47,570
    
    
    
    112.1
    %Total Expenses
    
    $
    95,924
    
    
    $
    44,034
    
    
    $
    51,890
    
    
    
    117.8
    %
    
    $
    92,546
    
    
    $
    43,285
    
    
    $
    49,261
    
    
    
    113.8
    %
    38




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##### Table of Contents



Net Earnings (Loss)
 Nine Months Ended September 30,
    
    
    Three Months Ended September 30,2009
    
    
    2008
    
    
    $ Change
    
    
    % Change
    
    
    2009
    
    
    2008
    
    
    $ Change
    
    
    % ChangeNet Earnings (Loss)
    
    $
    (75,174
    )
    
    $
    7,174
    
    
    $
    (82,348
    )
    
    
    (1,147.9
    %)
    
    $
    (89,391
    )
    
    $
    (25,749
    )
    
    $
    (63,642
    )
    
    
    247.2
    %
  39




---



##### Table of Contents



Fund Manager Fund-Related Income and Expense
   Nine Months
    
    
    Three MonthsEnded September 30,
    
    
    Ended September 30,2009
    
    
    2008
    
    
    2009
    
    
    2008Fund-related Expenses Paid by Manager:Operations-related expenses
    
    $
    3,018
    
    
    $
    9,982
    
    
    $
    423
    
    
    $
    3,050Origination-related expenses
    
    
    1,712
    
    
    
    5,664
    
    
    
    240
    
    
    
    1,731Total
    
    $
    4,730
    
    
    $
    15,645
    
    
    $
    663
    
    
    $
    4,780
    40




---



##### Table of Contents



Changes in the Loan Portfolio Profile
  Average Loan Size
  Geographic Diversification
  September 30, 2009
    
    
    December 31, 2008Oustanding
    
    
    Allowance for
    
    
    Net Carrying
    
    
    
    
    
    
    
    
    
    
    Oustanding
    
    
    Allowance for
    
    
    Net CarryingPrincipal
    
    
    Credit Loss
    
    
    Amount
    
    
    Percent
    
    
    #
    
    
    Principal
    
    
    Credit Loss
    
    
    Amount
    
    
    Percent
    
    
    #Arizona
    
    $
    290,778
    
    
    $
    (175,887
    )
    
    $
    114,891
    
    
    
    53.0
    %
    
    
    29
    
    
    $
    294,362
    
    
    $
    (128,499
    )
    
    $
    165,863
    
    
    
    52.9
    %
    
    
    31California
    
    
    181,023
    
    
    
    (113,678
    )
    
    
    67,345
    
    
    
    31.1
    %
    
    
    20
    
    
    
    177,255
    
    
    
    (124,422
    )
    
    
    52,833
    
    
    
    16.9
    %
    
    
    20New Mexico
    
    
    5,240
    
    
    
    (1,182
    )
    
    
    4,058
    
    
    
    1.9
    %
    
    
    2
    
    
    
    5,240
    
    
    
    (637
    )
    
    
    4,603
    
    
    
    1.5
    %
    
    
    2Texas
    
    
    11,102
    
    
    
    (4,493
    )
    
    
    6,609
    
    
    
    3.1
    %
    
    
    3
    
    
    
    55,825
    
    
    
    (5,781
    )
    
    
    50,044
    
    
    
    16.0
    %
    
    
    4Idaho
    
    
    49,590
    
    
    
    (39,090
    )
    
    
    10,500
    
    
    
    4.9
    %
    
    
    2
    
    
    
    49,578
    
    
    
    (38,458
    )
    
    
    11,120
    
    
    
    3.5
    %
    
    
    2Minnesota
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    0.0
    %
    
    
    0
    
    
    
    16,590
    
    
    
    
    
    
    
    16,590
    
    
    
    5.3
    %
    
    
    1Nevada
    
    
    7,978
    
    
    
    (2,670
    )
    
    
    5,308
    
    
    
    2.5
    %
    
    
    1
    
    
    
    7,969
    
    
    
    (1,876
    )
    
    
    6,093
    
    
    
    1.9
    %
    
    
    1Utah
    
    
    7,645
    
    
    
    
    
    
    
    7,645
    
    
    
    3.5
    %
    
    
    1
    
    
    
    7,035
    
    
    
    (637
    )
    
    
    6,398
    
    
    
    2.0
    %
    
    
    1Total
    
    $
    553,356
    
    
    $
    (337,000
    )
    
    $
    216,356
    
    
    
    100.0
    %
    
    
    58
    
    
    $
    613,854
    
    
    $
    (300,310
    )
    
    $
    313,544
    
    
    
    100.0
    %
    
    
    62
   41




---



##### Table of Contents



Interest Rate Information
     42




---



##### Table of Contents



September 30, 2009Fixed Rate
    
    
    Variable Rate
    
    
    TotalOutstanding
    
    
    
    
    
    
    Outstanding
    
    
    
    
    
    
    Outstanding
    
    
    Allowance for
    
    
    Net Carrying#
    
    
    Principal
    
    
    #
    
    
    Principal
    
    
    #
    
    
    Principal
    
    
    Credit Loss
    
    
    Amount
    
    
    %Current Rate:6.00%
    
    
    1
    
    
    $
    5,890
    
    
    
    
    
    
    $
    
    
    
    
    1
    
    
    $
    5,890
    
    
    $
    (1,625
    )
    
    $
    4,265
    
    
    
    2.0
    %7.53%
    
    
    1
    
    
    
    41,886
    
    
    
    
    
    
    
    
    
    
    
    1
    
    
    
    41,886
    
    
    
    (31,464
    )
    
    
    10,422
    
    
    
    4.8
    %8.00%
    
    
    3
    
    
    
    4,961
    
    
    
    
    
    
    
    
    
    
    
    3
    
    
    
    4,961
    
    
    
    (52
    )
    
    
    4,909
    
    
    
    2.3
    %8.25%
    
    
    1
    
    
    
    55,885
    
    
    
    
    
    
    
    
    
    
    
    1
    
    
    
    55,885
    
    
    
    (2,311
    )
    
    
    53,574
    
    
    
    24.7
    %9.00%
    
    
    1
    
    
    
    1,589
    
    
    
    
    
    
    
    
    
    
    
    1
    
    
    
    1,589
    
    
    
    (56
    )
    
    
    1,533
    
    
    
    0.7
    %10.00%
    
    
    3
    
    
    
    27,871
    
    
    
    
    
    
    
    
    
    
    
    3
    
    
    
    27,871
    
    
    
    (22,178
    )
    
    
    5,693
    
    
    
    2.6
    %11.00%
    
    
    1
    
    
    
    1,465
    
    
    
    1
    
    
    
    1,618
    
    
    
    2
    
    
    
    3,083
    
    
    
    
    
    
    
    3,083
    
    
    
    1.4
    %11.50%
    
    
    1
    
    
    
    1,102
    
    
    
    4
    
    
    
    11,328
    
    
    
    5
    
    
    
    12,430
    
    
    
    (4,711
    )
    
    
    7,719
    
    
    
    3.6
    %11.75%
    
    
    1
    
    
    
    5,759
    
    
    
    
    
    
    
    
    
    
    
    1
    
    
    
    5,759
    
    
    
    
    
    
    
    5,759
    
    
    
    2.7
    %12.00%
    
    
    7
    
    
    
    61,403
    
    
    
    8
    
    
    
    53,569
    
    
    
    15
    
    
    
    114,972
    
    
    
    (60,334
    )
    
    
    54,638
    
    
    
    25.2
    %12.25%
    
    
    
    
    
    
    
    
    
    
    2
    
    
    
    56,558
    
    
    
    2
    
    
    
    56,558
    
    
    
    (51,223
    )
    
    
    5,335
    
    
    
    2.5
    %12.50%
    
    
    1
    
    
    
    1,169
    
    
    
    6
    
    
    
    22,441
    
    
    
    7
    
    
    
    23,610
    
    
    
    (18,466
    )
    
    
    5,144
    
    
    
    2.4
    %12.75%
    
    
    1
    
    
    
    37,958
    
    
    
    
    
    
    
    
    
    
    
    1
    
    
    
    37,958
    
    
    
    (23,289
    )
    
    
    14,669
    
    
    
    6.8
    %13.00%
    
    
    3
    
    
    
    30,307
    
    
    
    9
    
    
    
    54,947
    
    
    
    12
    
    
    
    85,254
    
    
    
    (60,987
    )
    
    
    24,267
    
    
    
    11.2
    %13.75%
    
    
    
    
    
    
    
    
    
    
    2
    
    
    
    6,528
    
    
    
    2
    
    
    
    6,528
    
    
    
    (6,027
    )
    
    
    501
    
    
    
    0.2
    %14.25%
    
    
    
    
    
    
    
    
    
    
    1
    
    
    
    69,122
    
    
    
    1
    
    
    
    69,122
    
    
    
    (54,277
    )
    
    
    14,845
    
    
    
    6.9
    %Total
    
    
    25
    
    
    $
    277,245
    
    
    
    33
    
    
    $
    276,111
    
    
    
    58
    
    
    $
    553,356
    
    
    $
    (337,000
    )
    
    $
    216,356
    
    
    
    100.0
    %% of Portfolio
    
    
    
    
    
    
    50.1
    %
    
    
    
    
    
    
    49.9
    %
    
    
    
    
    
    
    100.0
    %Weighted Average Rate
    
    
    
    
    
    
    10.26
    %
    
    
    
    
    
    
    12.87
    %
    
    
    
    
    
    
    11.56
    %Number of Loans
    
    
    
    
    
    
    25
    
    
    
    
    
    
    
    33
    
    
    
    
    
    
    
    58Average Principal
    
    
    
    
    
    $
    11,090
    
    
    
    
    
    
    $
    8,367
    
    
    
    
    
    
    $
    9,541
 December 31, 2008Fixed Rate
    
    
    Variable Rate
    
    
    TotalOutstanding
    
    
    
    
    
    
    Outstanding
    
    
    
    
    
    
    Outstanding
    
    
    Allowance for
    
    
    Net Carrying#
    
    
    Principal
    
    
    #
    
    
    Principal
    
    
    #
    
    
    Principal
    
    
    Credit Loss
    
    
    Amount
    
    
    %Current Rate:8.00%
    
    
    1
    
    
    $
    3,500
    
    
    
    
    
    
    $
    
    
    
    
    1
    
    
    $
    3,500
    
    
    $
    
    
    
    $
    3,500
    
    
    
    1.1
    %9.00%
    
    
    1
    
    
    
    10,461
    
    
    
    1
    
    
    
    1,622
    
    
    
    2
    
    
    
    12,083
    
    
    
    (10,175
    )
    
    
    1,908
    
    
    
    0.6
    %10.00%
    
    
    1
    
    
    
    26,709
    
    
    
    
    
    
    
    
    
    
    
    1
    
    
    
    26,709
    
    
    
    (23,226
    )
    
    
    3,483
    
    
    
    1.1
    %11.00%
    
    
    
    
    
    
    
    
    
    
    1
    
    
    
    1,981
    
    
    
    1
    
    
    
    1,981
    
    
    
    
    
    
    
    1,981
    
    
    
    0.6
    %11.25%
    
    
    
    
    
    
    
    
    
    
    1
    
    
    
    46,020
    
    
    
    1
    
    
    
    46,020
    
    
    
    
    
    
    
    46,020
    
    
    
    14.7
    %11.50%
    
    
    2
    
    
    
    2,651
    
    
    
    6
    
    
    
    94,283
    
    
    
    8
    
    
    
    96,934
    
    
    
    (15,928
    )
    
    
    81,006
    
    
    
    25.8
    %11.75%
    
    
    1
    
    
    
    4,752
    
    
    
    
    
    
    
    
    
    
    
    1
    
    
    
    4,752
    
    
    
    
    
    
    
    4,752
    
    
    
    1.5
    %12.00%
    
    
    10
    
    
    
    75,758
    
    
    
    9
    
    
    
    67,683
    
    
    
    19
    
    
    
    143,441
    
    
    
    (54,499
    )
    
    
    88,942
    
    
    
    28.4
    %12.25%
    
    
    1
    
    
    
    631
    
    
    
    3
    
    
    
    55,850
    
    
    
    4
    
    
    
    56,481
    
    
    
    (52,775
    )
    
    
    3,706
    
    
    
    1.2
    %12.50%
    
    
    1
    
    
    
    1,929
    
    
    
    6
    
    
    
    22,227
    
    
    
    7
    
    
    
    24,156
    
    
    
    (18,026
    )
    
    
    6,130
    
    
    
    2.0
    %12.75%
    
    
    1
    
    
    
    37,935
    
    
    
    
    
    
    
    
    
    
    
    1
    
    
    
    37,935
    
    
    
    (25,394
    )
    
    
    12,541
    
    
    
    4.0
    %13.00%
    
    
    3
    
    
    
    27,897
    
    
    
    9
    
    
    
    54,947
    
    
    
    12
    
    
    
    82,844
    
    
    
    (64,831
    )
    
    
    18,013
    
    
    
    5.7
    %13.25%
    
    
    
    
    
    
    
    
    
    
    1
    
    
    
    2,821
    
    
    
    1
    
    
    
    2,821
    
    
    
    (1,675
    )
    
    
    1,146
    
    
    
    0.4
    %13.75%
    
    
    
    
    
    
    
    
    
    
    2
    
    
    
    6,528
    
    
    
    2
    
    
    
    6,528
    
    
    
    (3,781
    )
    
    
    2,747
    
    
    
    0.9
    %14.25%
    
    
    
    
    
    
    
    
    
    
    1
    
    
    
    67,669
    
    
    
    1
    
    
    
    67,669
    
    
    
    (30,000
    )
    
    
    37,669
    
    
    
    12.0
    %Total
    
    
    22
    
    
    $
    192,223
    
    
    
    40
    
    
    $
    421,631
    
    
    
    62
    
    
    $
    613,854
    
    
    $
    (300,310
    )
    
    $
    313,544
    
    
    
    100.0
    %% of Portfolio
    
    
    
    
    
    
    31.3
    %
    
    
    
    
    
    
    68.7
    %
    
    
    
    
    
    
    100.0
    %Weighted Average Rate
    
    
    
    
    
    
    11.71
    %
    
    
    
    
    
    
    12.39
    %
    
    
    
    
    
    
    12.18
    %Number of Loans
    
    
    
    
    
    
    22
    
    
    
    
    
    
    
    40
    
    
    
    
    
    
    
    62Average Principal
    
    
    
    
    
    $
    8,737
    
    
    
    
    
    
    $
    10,541
    
    
    
    
    
    
    $
    9,901
  43




---



##### Table of Contents



Concentration by Category based on Collaterals Development Status
  September 30, 2009
    
    
    December 31, 2008Amount
    
    
    %
    
    
    #
    
    
    Amount
    
    
    %
    
    
    #Pre-entitled Land:Held for Investment
    
    $
    13,834
    
    
    
    2.5
    %
    
    
    3
    
    
    $
    7,178
    
    
    
    1.2
    %
    
    
    2Processing Entitlements
    
    
    193,087
    
    
    
    34.9
    %
    
    
    10
    
    
    
    200,902
    
    
    
    32.8
    %
    
    
    12206,921
    
    
    
    37.4
    %
    
    
    13
    
    
    
    208,080
    
    
    
    34.0
    %
    
    
    14Entitled Land:Held for Investment
    
    
    113,117
    
    
    
    20.4
    %
    
    
    16
    
    
    
    114,307
    
    
    
    18.6
    %
    
    
    17Infrastructure under Construction
    
    
    69,834
    
    
    
    12.6
    %
    
    
    5
    
    
    
    57,908
    
    
    
    9.4
    %
    
    
    4Improved and Held for Vertical Construction
    
    
    46,857
    
    
    
    8.5
    %
    
    
    4
    
    
    
    54,486
    
    
    
    8.9
    %
    
    
    5229,808
    
    
    
    41.5
    %
    
    
    25
    
    
    
    226,701
    
    
    
    36.9
    %
    
    
    26Construction & Existing Structures:New Structure  Construction in-process
    
    
    37,110
    
    
    
    6.7
    %
    
    
    15
    
    
    
    43,814
    
    
    
    7.1
    %
    
    
    14Existing Structure Held for Investment
    
    
    23,632
    
    
    
    4.3
    %
    
    
    4
    
    
    
    37,482
    
    
    
    6.1
    %
    
    
    5Existing Structure  Improvements
    
    
    55,885
    
    
    
    10.1
    %
    
    
    1
    
    
    
    97,777
    
    
    
    15.9
    %
    
    
    3116,627
    
    
    
    21.1
    %
    
    
    20
    
    
    
    179,073
    
    
    
    29.1
    %
    
    
    22Total
    
    
    553,356
    
    
    
    100.0
    %
    
    
    58
    
    
    
    613,854
    
    
    
    100.0
    %
    
    
    62Less: Allowance for Credit Loss
    
    
    (337,000
    )
    
    
    
    
    
    
    
    
    
    
    (300,310
    )Net Carrying Value
    
    $
    216,356
    
    
    
    
    
    
    
    
    
    
    $
    313,544
  September 30, 2009
    
    
    December 31, 2008Amount
    
    
    %
    
    
    #
    
    
    Amount
    
    
    %
    
    
    #Residential
    
    $
    276,417
    
    
    
    50.0
    %
    
    
    37
    
    
    $
    278,644
    
    
    
    45.4
    %
    
    
    37Mixed Use
    
    
    183,617
    
    
    
    33.2
    %
    
    
    8
    
    
    
    206,691
    
    
    
    33.7
    %
    
    
    11Commercial
    
    
    92,252
    
    
    
    16.7
    %
    
    
    12
    
    
    
    127,449
    
    
    
    20.8
    %
    
    
    13Industrial
    
    
    1,070
    
    
    
    0.1
    %
    
    
    1
    
    
    
    1,070
    
    
    
    0.1
    %
    
    
    1Total
    
    
    553,356
    
    
    
    100.0
    %
    
    
    58
    
    
    
    613,854
    
    
    
    100.0
    %
    
    
    62Less: Allowance for Credit Loss
    
    
    (337,000
    )
    
    
    
    
    
    
    
    
    
    
    (300,310
    )Net Carrying Value
    
    $
    216,356
    
    
    
    
    
    
    
    
    
    
    $
    313,544
    44




---



##### Table of Contents



Borrower and Borrower Groups
  Changes in the Portfolio Profile  Scheduled Maturities
  September 30, 2009Quarter
    
    Amount
    
    
    Percent
    
    
    #Matured
    
    $
    370,255
    
    
    
    66.8
    %
    
    
    36Q4 2009
    
    
    20,209
    
    
    
    3.7
    %
    
    
    3Q1 2010
    
    
    2,030
    
    
    
    0.4
    %
    
    
    3Q3 2010
    
    
    56,116
    
    
    
    10.1
    %
    
    
    10Q1 2011
    
    
    6,583
    
    
    
    1.2
    %
    
    
    3Q1 2012
    
    
    392
    
    
    
    0.1
    %
    
    
    1Q3 2012
    
    
    97,771
    
    
    
    17.7
    %
    
    
    2Total
    
    
    553,356
    
    
    
    100.0
    %
    
    
    58Less: Allowance
for Credit Loss
    
    
    (337,000
    )Net Carrying Value
    
    $
    216,356
  Real Estate Held for Development or Sale
    45




---



##### Table of Contents



Held For Development
    
    
    Held For Sale# of
    
    
    Aggregate Net
    
    
    # of
    
    
    Aggregate NetState
    
    Projects
    
    
    Book Value
    
    
    Projects
    
    
    Book ValueCalifornia
    
    
    3
    
    
    $
    9,644
    
    
    
    
    
    
    $
    Texas
    
    
    3
    
    
    
    38,774
    
    
    
    
    
    
    
    Arizona
    
    
    6
    
    
    
    30,101
    
    
    
    2
    
    
    
    7,092Minnesota
    
    
    1
    
    
    
    11,694
    
    
    
    
    
    
    
    Total
    
    
    13
    
    
    $
    90,213
    
    
    
    2
    
    
    $
    7,092
    46




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##### Table of Contents



Important Relationships Between Capital Resources and Results of Operations
 Loan Loss Reserve
  Mortgage Loans, Participations and Loan Sales
    47




---



##### Table of Contents



Distributions to Members
  Annualized Rate of Return to Members on Distributions
  Redemptions
  Prospective Trends
 Loan Demand, Selection and Quality
   48




---



##### Table of Contents



Summary of Existing Loans in Default
     Percent of
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Non-AccruedOutstanding
    
    
    
    
    
    
    Outstanding
    
    
    Allowance for
    
    
    Net Carrying
    
    
    Accrued
    
    
    NotePrincipal
    
    
    #
    
    
    Principal
    
    
    Credit Loss
    
    
    Amount
    
    
    Interest
    
    
    Interest
    
    
    TotalArizona
    
    
    48.3
    %
    
    
    23
    
    
    $
    228,873
    
    
    $
    (173,523
    )
    
    $
    55,350
    
    
    $
    4,136
    
    
    $
    10,737
    
    
    $
    70,223Idaho
    
    
    10.5
    %
    
    
    2
    
    
    
    49,590
    
    
    
    (39,090
    )
    
    
    10,500
    
    
    
    1,948
    
    
    
    4,490
    
    
    
    16,938California
    
    
    36.1
    %
    
    
    17
    
    
    
    171,133
    
    
    
    (113,678
    )
    
    
    57,455
    
    
    
    3,655
    
    
    
    12,611
    
    
    
    73,721Texas
    
    
    2.3
    %
    
    
    3
    
    
    
    11,102
    
    
    
    (4,493
    )
    
    
    6,609
    
    
    
    427
    
    
    
    849
    
    
    
    7,885Nevada
    
    
    1.7
    %
    
    
    1
    
    
    
    7,978
    
    
    
    (2,670
    )
    
    
    5,308
    
    
    
    319
    
    
    
    715
    
    
    
    6,342New Mexico
    
    
    1.1
    %
    
    
    2
    
    
    
    5,240
    
    
    
    (1,182
    )
    
    
    4,058
    
    
    
    21
    
    
    
    435
    
    
    
    4,514100.0
    %
    
    
    48
    
    
    $
    473,916
    
    
    $
    (334,636
    )
    
    $
    139,280
    
    
    $
    10,506
    
    
    $
    29,837
    
    
    $
    179,623
    49




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##### Table of Contents



Loan Portfolio Valuation Analysis
  
    
    an estimate of the net realizable value of the underlying collateral in relation to the
outstanding mortgage balance, including accrued interest and related costs;
 
    
    the present value of cash flows expected to be received by us;
 
    
    the date and reliability of any valuations;
 
    
    the financial condition of the borrower and any adverse factors that may affect its
ability to pay its obligations in a timely manner;
 
    
    prevailing economic conditions;
 
    
    historical experience by market and in general; and
 
    
    an evaluation of industry trends.
    50




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##### Table of Contents



Level 1 
    
    Valuations based on unadjusted quoted prices in active markets for identical
assets or liabilities that we have the ability to access at the measurement date;Level 2 
    
    Valuations based on quoted market prices for similar instruments in active
markets, quoted prices for identical or similar instruments in markets that are not active
or models for which all significant inputs are observable in the market either directly or
indirectly; andLevel 3 
    
    Valuations based on models that use inputs that are unobservable in the market and
significant to the fair value measurement.
        51




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##### Table of Contents



1.
    
    Reviewing the status of each portfolio loan to ascertain our view of the likelihood that we
will collect all amounts due under the terms of such loans at maturity based on current
real estate and credit market conditions.
 2.
    
    For loans whose collection was deem to be unlikely, we are viewing the portfolio loans to
ascertain how recently the latest valuation of the underlying collateral was performed.
 3.
    
    Subjecting the entire loan portfolio to independent third party valuation as of September
30, 2009.
 4.
    
    Utilizing the services of Cushman & Wakefield, a nationally recognized
valuation firm, and other valuation firms to perform a valuation analysis for the selected
projects using the valuation criteria under a Level 2 valuation approach. Cushman &
Wakefield valued approximately 89% of the outstanding principal balance of the loan
portfolio while other valuation firms valued the remaining 11%. For those valuations
performed by valuation firms other than Cushman & Wakefield, we expect to utilize Cushman &
Wakefield to perform a review of the valuations and reports.
 5.
    
    We understand it is
customary for some independent valuation firms to use the term market
value when valuing real property interests. We recognize that there are differences in
the market value and fair value definitions, but in many instances,
the results are identical. The Manager believes that it can reliably use market
valuations when making decisions with respect to fair value of our assets for financial
reporting purposes. Level 3 inputs for valuation are provided for market circumstances in
which Level 1 and Level 2 inputs are not reliably available. From the information
received from the valuation firms engaged by us, each asset, and its corresponding
valuation, was individually reviewed by the Fund and the valuations were interpreted under
the definition of fair value under applicable accounting guidance.
 6.
    
    Using observable and unobservable inputs available, and depending on the development
status of the collateral, we are in the process of performing analyses on selected assets
utilizing a Level 3 residual analysis approach to determine the projected cash proceeds
expected to be received for such projects. This analysis includes estimating project development costs, projected carrying
costs, such as property taxes, and estimated disposal costs. The cash flow streams will
then be discounted to present value to derive fair value.
  52




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##### Table of Contents




    
    Very few of the precedent transactions that were analyzed satisfied the market value
and fair value requirement that the price reflect that of an orderly transaction, rather
many of the sales were made under duress or in markets in turmoil.
 
    
    Inputs for use in Level 2 and/or Level 3 models were reported by the valuation firms to
be inconsistent and reflective of a distressed market that has not yet established current
norms for inputs into discounted cash flow or other financial models such as absorption
rates and timing, unit pricing and trends, discount rate, risk adjustment processes, or
the like.
 
    
    A distinction was made between owners under duress and properties under duress. Market
values are determined based on the determined highest and best use of the real property
being valued. When owners are under duress, prices of transactions in which they are
involved must be viewed as at least potentially subject to duress as well. The valuation
firms took this distinction into account in arriving at highest and best use conclusions
and selecting appropriate valuation methodologies.
 
    
    The highest and best use for the majority of real estate collateral subject to
third-party valuation was deemed to be held for investment and/or future development,
rather than being subject to immediate development and/or sale. For each of these assets,
a sales comparison approach using available data was used as the valuation methodology.
 
    
    For the projects which included either unentitled or entitled land lacking any vertical
or horizontal improvements, given the current distressed state of the real estate and
credit markets, the development approach was deemed to be unsupportable because Level 2
market participant data were insufficient and/or Level 3 criteria was not reliably
available from the valuation firms market research; the highest and best use standard
in these instances required such property to be classified as held for investment
purposes until market conditions provide observable development activity to support either
a Level 2 or a Level 3 valuation model for the development of the planned site. As a
result, the valuation firms used a sales comparison approach using
available data to determine market value.
 
    
    For the projects containing partially or fully developed lots, the development approach
was utilized, with assumptions made for pricing trends, absorption projections, holding
costs, and the relative risk given these assumptions. The assumptions used by the
valuation firms were based on currently observable available market data.
 
    
    For operating properties, the income approach, using the direct capitalization and
discounted cash flow methods was used by the valuation firms. The anticipated future cash
flows and a reversionary value were discounted to an opinion of net present value at a
chosen yield rate. The assumptions were based on currently observable available market
data.
 
    
    For projects in which we
have received a recent third party offer to buy our loan, or the
borrower has received a recent third party offer to buy the related
project, we utilized the offer amount in cases in which the offer
exceeded the valuation conclusion reached by the independent
valuation firms.
  53




---



##### Table of Contents




    
    For collateral to be developed, the initial unit sales price utilized was based on
local market, comparable prices from non-distressed pricing from prior periods utilizing
observable and unobservable data points, generally discounted by 20% or more. In general,
management assumed a price escalation utilizing the low end of a historical 3-year average
look back for the last 10 years. We considered this a fair exchange price in an orderly
transaction between market participants to sell the asset, assuming its highest and best
use as determined by management, in the principal or most advantageous market for the
asset.
 
    
    For collateral to be developed, the development costs, operating and selling cost
assumptions we made were based on observable and unobservable cost estimates obtained from
a cross section of industry experts and market participants.
 
    
    For collateral consisting of partially complete or finished lots, development costs,
operating and selling cost assumptions were based on observable and unobservable
cost estimates obtained from a cross section of industry experts and market participants.
 
    
    For collateral whose development is complete or nearly complete which are expected to
be leased initially to allow for stabilization of market prices before being sold, we
utilized operating revenue and costs for comparable projects using current operating data
obtained by us.
 
    
    Based on the resulting net cash flows derived from the utilization of the above
assumptions, the Manager applied risk-adjusted annual discount rates ranging from 20% to 25% to the
net cash flows, depending on the projected build-out term, the project type, the location
and assumed project risk.
 
    
    Assets acquired through foreclosure are subject to different accounting guidance which
requires us to account for these real estate assets received in satisfaction of the
related receivable by writing them down to estimated fair value as of the date of
foreclosure. An impairment charge is recorded when circumstances
indicate that the carrying amount of the property is greater than the
sum of the undiscounted cash flows expected to result from the use and
eventual disposition of the property.
     54




---



##### Table of Contents



2009Balance at beginning of year
    
    $
    300,310Valuation charge for current fair value
    
    
    82,000Transferred to other accounts
    
    
    (45,310
    )Balance at end of period
    
    $
    337,000
 Trends in Interest Income and Effective Portfolio Yield
  Interest Earning Assets Deployment Ratio
   55




---



##### Table of Contents




    
    pending fundings of loans that have completed the underwriting process;
 
    
    anticipated loan fundings;
 
    
    average size of loans in the underwriting process;
 
    
    expected loan reductions or payoffs;
 
    
    pending Member redemptions;
 
    
    direct expenses, and
 
    
    other anticipated liquidity needs.
  Leverage to Enhance Portfolio Yields
   Off-Balance Sheet Arrangements
  Contractual Obligations
   56




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##### Table of Contents



Liquidity and Capital Resources
   Requirements for Liquidity
 Loan Fundings
   September 30, 2009
    
    
    December 31, 2008Loans Held
    
    
    Loans Held
    
    
    
    
    
    
    Loans Held
    
    
    Loans Heldto Maturity
    
    
    for Sale
    
    
    Total
    
    
    to Maturity
    
    
    for Sale
    
    
    TotalUndispersed
Loans-in-process per  Note Agreement
    
    $
    50,483
    
    
    $
    2,672
    
    
    $
    53,155
    
    
    $
    66,035
    
    
    $
    32,633
    
    
    $
    98,668Less: amounts not to be funded
    
    
    (46,408
    )
    
    
    
    
    
    
    (46,408
    )
    
    
    (39,461
    )
    
    
    (13,767
    )
    
    
    (53,228
    )Undispersed
Loans-in-process per  Financial Statements
    
    $
    4,075
    
    
    $
    2,672
    
    
    $
    6,747
    
    
    $
    26,574
    
    
    $
    18,866
    
    
    $
    45,440
   57




---



##### Table of Contents



Maintenance and Development Costs for Real Estate Owned
   Sources of Liquidity
 Loan Payments
    58




---



##### Table of Contents



Disposition of Real Estate Owned
  Supplemental Liquidity
  Cash Flows
    59




---



##### Table of Contents



Critical Accounting Policies
  Recent Accounting Pronouncements
   60




---



##### Table of Contents



Item 3.
    
    Quantitative and
Qualitative Disclosures about Market Risk.
      61




---



##### Table of Contents



September 30, 2009 Portfolio InformationFixed Rate
    
    
    Variable Rate
    
    
    TotalOutstanding Balance
    
    $
    277,245
    
    
    $
    276,111
    
    
    $
    553,356Current Weighted Average Yield
    
    
    10.26
    %
    
    
    12.87
    %
    
    
    11.56
    %Annualized Interest Income
    
    $
    28,439
    
    
    $
    35,533
    
    
    $
    63,972
 Change in Annual Interest Income
    
    
    Pro-forma
    
    
    ChangeFixed Rate
    
    
    Variable Rate
    
    
    Total
    
    
    Yield
    
    
    In YieldIncrease in Prime Rate:0.5% or 50 basis points
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    
    11.56
    %
    
    
    0.00
    %1.0% or 100 basis points
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    
    11.56
    %
    
    
    0.00
    %2.0% or 200 basis points
    
    $
    
    
    
    $
    41
    
    
    $
    41
    
    
    
    11.57
    %
    
    
    0.01
    %Decrease in Prime Rate:0.5% or 50 basis points
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    
    11.56
    %
    
    
    0.00
    %1.0% or 100 basis points
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    
    11.56
    %
    
    
    0.00
    %2.0% or 200 basis points
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    
    11.56
    %
    
    
    0.00
    %
  Matured
    
    
    Q4 2009
    
    
    Q1  2010
    
    
    Q3  2010
    
    
    Q1  2011
    
    
    Q1 2012
    
    
    Q3  2012
    
    
    TotalLoan Rates:Variable
    
    $
    212,740
    
    
    $
    6,806
    
    
    $
    
    
    
    $
    54,947
    
    
    $
    1,618
    
    
    $
    
    
    
    $
    
    
    
    $
    276,111Fixed
    
    
    157,515
    
    
    
    13,403
    
    
    
    2,030
    
    
    
    1,169
    
    
    
    4,965
    
    
    
    392
    
    
    
    97,771
    
    
    
    277,245$
    370,255
    
    
    $
    20,209
    
    
    $
    2,030
    
    
    $
    56,116
    
    
    $
    6,583
    
    
    $
    392
    
    
    $
    97,771
    
    
    $
    553,356Less: Allowance for Credit Loss
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (337,000
    )Net Carrying Value
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    $
    216,356
   62




---



##### Table of Contents



Item 4T.
    
    Controls and Procedures.
 Controls and Procedures
   Changes to Internal Control over Financial Reporting
   
 PART II
 OTHER INFORMATION
 
 Item 1.
    
    Legal Proceedings.
    63




---



##### Table of Contents



Item 1A.
    
    Risk Factors.
  Defaults on our mortgage loans will decrease our revenue and distributions.
    64




---



##### Table of Contents



Our business is subject to regulation by several government agencies and a disciplinary or civil
action that occurs as a result of an actual or alleged violation of any rules or regulations to
which we are subject could have a material adverse effect on our business.
    We may refinance existing loans at rates lower than those currently recognized by the Fund.
  IMH, on behalf of the Fund, has taken various actions to manage the Fund through the recession, but
there can be no assurance that these or future actions will be successful, in part or at all, and a
failure of any one or more of these actions could have a material adverse effect on the Fund.
   65




---



##### Table of Contents



Our Manager may, but is not required to, pay for the Funds expenses and the Fund could experience
a material adverse effect if it is required to pay such expenses.
  Any borrowing by us will increase risk and may reduce the amount we have available to distribute to
Members.
    66




---



##### Table of Contents



Item 2.
    
    Unregistered Sales of Equity Securities and Use of
Proceeds.
   67




---



##### Table of Contents



Item 6.
    
    Exhibits
 Exhibit No.
    
    Description3.1
    
    
    IMH Secured Loan Fund, LLC Certificate of Formation
(incorporated by reference to Exhibit 3.1 of the Annual Report
on Form 10-K, File No. 000-52611, filed on March 31, 2008)4.1
    
    
    IMH Secured Loan Fund, LLC Restated Limited Liability Company
Operating Agreement (incorporated by reference to Exhibit 4.1
of the Registration Statement on Form 10, File No. 000-52611,
filed by IMH Secured Loan Fund, LLC on April 30, 2007)4.2
    
    
    Form Subscription Agreement (incorporated by reference to
Exhibit 4.2 of the Registration Statement on Form 10, File No.
000-52611, filed by IMH Secured Loan Fund, LLC on April 30,
2007)31.1
    *
    
    Certification of Chief Executive Officer of Investors Mortgage
Holdings, Inc., manager of IMH Secured Loan Fund, LLC pursuant
to Section 302 of the Sarbanes-Oxley Act of 200231.2
    *
    
    Certification of Chief Financial Officer of Investors Mortgage
Holdings, Inc., manager of IMH Secured Loan Fund, LLC pursuant
to Section 302 of the Sarbanes-Oxley Act of 200232.1
    *
    
    Certification of Chief Executive Officer and the Chief
Financial Officer of Investors Mortgage Holdings, Inc.,
manager of IMH Secured Loan Fund, LLC pursuant to Section 906
of the Sarbanes-Oxley Act of 2002
 *
    
    Filed herewith.
    
    This certification is being furnished solely to accompany this report pursuant to 18 U.S.C.
Section 1350, and is not being filed for purposes of Section 18 of the Exchange Act, and is
not to be incorporated by reference into any filings of the Fund, whether made before or after
the date hereof, regardless of any general incorporation language in such filing.  68




---



##### Table of Contents



SIGNATURES
  Date: November 18, 2009
    IMH SECURED LOAN FUND, LLCBy:
    Investors Mortgage Holdings, Inc.Its:
    ManagerBy:
    /s/ Steven DarakSteven DarakChief Financial Officer(Principal Financial and Accounting Officer and
Duly Authorized Officer)  69




---



##### Table of Contents



INDEX TO EXHIBITS
 ExhibitNo.
    
    Description3.1
    
    
    IMH Secured Loan Fund, LLC Certificate of Formation
(incorporated by reference to Exhibit 3.1 of the Annual Report
on Form 10-K, File No. 000-52611, filed on March 31, 2008)4.1
    
    
    IMH Secured Loan Fund, LLC Restated Limited Liability Company
Operating Agreement (incorporated by reference to Exhibit 4.1
of the Registration Statement on Form 10, File No. 000-52611,
filed by IMH Secured Loan Fund, LLC on April 30, 2007)4.2
    
    
    Form Subscription Agreement (incorporated by reference to
Exhibit 4.2 of the Registration Statement on Form 10, File No.
000-52611, filed by IMH Secured Loan Fund, LLC on April 30,
2007)31.1
    *
    
    Certification of Chief Executive Officer of Investors Mortgage
Holdings, Inc., manager of IMH Secured Loan Fund, LLC pursuant
to Section 302 of the Sarbanes-Oxley Act of 200231.2
    *
    
    Certification of Chief Financial Officer of Investors Mortgage
Holdings, Inc., manager of IMH Secured Loan Fund, LLC pursuant
to Section 302 of the Sarbanes-Oxley Act of 200232.1
    *
    
    Certification of Chief Executive Officer and the Chief
Financial Officer of Investors Mortgage Holdings, Inc.,
manager of IMH Secured Loan Fund, LLC pursuant to Section 906
of the Sarbanes-Oxley Act of 2002
 *
    
    Filed herewith.
    
    This certification is being furnished solely to accompany this report pursuant to 18 U.S.C.
Section 1350, and is not being filed for purposes of Section 18 of the Exchange Act, and is
not to be incorporated by reference into any filings of the Fund, whether made before or after
the date hereof, regardless of any general incorporation language in such filing.  70