----

| Delaware                                                      | 81-0624254                              |
|---------------------------------------------------------------|-----------------------------------------|
| (State or other jurisdiction of incorporation ororganization) | (I.R.S. Employer Identification Number) |

| Large accelerated filer                       | £ | Accelerated filer         | £ |
|-----------------------------------------------|--------|---------------------------|--------|
| Non-accelerated filer                         | þ | Smaller reporting company | £ |
| (Do not check if a smaller reporting company) |

----

|     | PART I - FINANCIAL INFORMATION                                                                                          |   |
|----------|-------------------------------------------------------------------------------------------------------------------------|--------|
|     |                                                                                                                    |   |
| Item 1.  | Unaudited Financial Statements.                                                                                         |   |
|     |                                                                                                                    |   |
|     | Unaudited Condensed Consolidated Balance Sheets as of December 31, 2010 and March 31, 2011                              | 3      |
|     |                                                                                                                    |   |
|     | Unaudited Condensed Consolidated Statements of Operations for the Three Months Ended March 31, 2010 and 2011       | 4      |
|     |                                                                                                                    |   |
|     | Unaudited Condensed Consolidated Statement of Stockholders’ Equity for the Three Months Ended March 31, 2011 | 5      |
|     |                                                                                                                    |   |
|     | Unaudited Condensed Consolidated Statements of Cash Flows for Three Months Ended March 31, 2010 and 2011           | 6      |
|     |                                                                                                                    |   |
|     | Unaudited Condensed Notes to Consolidated Financial Statements                                                     | 7      |
|     |                                                                                                                    |   |
| Item 2.  | Management’s Discussion and Analysis of Financial Condition and Results of Operations.                            | 34     |
|     |                                                                                                                    |   |
| Item 3.  | Quantitative and Qualitative Disclosures About Market Risk.                                                             | 56     |
|     |                                                                                                                    |   |
| Item 4T. | Controls and Procedures.                                                                                                | 57     |
|     |                                                                                                                    |   |
|     | PART II – OTHER INFORMATION                                                                                       |   |
|     |                                                                                                                    |   |
| Item 1.  | Legal Proceedings.                                                                                                      | 58     |
|     |                                                                                                                    |   |
| Item 1A. | Risk Factors.                                                                                                           | 60     |
|     |                                                                                                                    |   |
| Item 2.  | Unregistered Sales of Equity Securities and Use of Proceeds.                                                            | 63     |
|     |                                                                                                                    |   |
| Item 5.  | Other Information                                                                                                       | 63     |
|     |                                                                                                                    |   |
| Item 7.  | Exhibits.                                                                                                               | 63     |
|     |                                                                                                                    |   |
|     | Signatures                                                                                                              | 65     |
|     |                                                                                                                    |   |
|     | Index to Exhibits                                                                                                       | 66     |

----

| Item 1. | Financial Statements. |
|---------|-----------------------|

|                                                                                                                               |   | December 31, |     |   | March 31,   |   |
|------------------------------------------------------------------------------------------------------------------------------------|--------|--------------|----------|--------|-------------|--------|
|                                                                                                                               |   | 2010         |     |   | 2011        |   |
|                                                                                                                               |   |         |     |   | (unaudited) |   |
| ASSETS                                                                                                                             |   |         |     |   |        |   |
| Cash and Cash Equivalents                                                                                                          |   | $            | 831      |   |        | $      | 759 |   |
| Mortgage Loans Held for Sale, Net of Valuation Allowance                                                                           |   |         | 123,200  |   |        |   | 114,293 |   |
| Accrued Interest and Other Receivables                                                                                             |   |         | 13,055   |   |        |   | 11,329 |   |
| Real Estate Acquired through Foreclosure Held for Sale, Net                                                                        |   |         | 31,830   |   |        |   | 39,761 |   |
| Real Estate Held for Development, Net:                                                                                             |   |         |     |   |        |   |   |   |
| Acquired through Foreclosure                                                                                                       |   |         | 55,951   |   |        |   | 55,385 |   |
| Purchased for Investment                                                                                                           |   |         | 1,691    |   |        |   | 1,691 |   |
| Real Estate Held for Development, Net                                                                                              |   |         | 57,642   |   |        |   | 57,076 |   |
| Deposits and Other Assets                                                                                                          |   |         | 1,915    |   |        |   | 2,836 |   |
| Property and Equipment, Net                                                                                                        |   |         | 1,462    |   |        |   | 1,340 |   |
|                                                                                                                               |   |         |     |   |        |   |   |   |
| Total Assets                                                                                                                       |   | $            | 229,935  |   |        | $      | 227,394 |   |
|                                                                                                                               |   |         |     |   |        |   |   |   |
| LIABILITIES                                                                                                                        |   |         |     |   |        |   |   |   |
| Accounts Payable and Accrued Expenses                                                                                              |   | $            | 5,391    |   |        | $      | 6,097 |   |
| Accrued Property Taxes                                                                                                             |   |         | 4,606    |   |        |   | 4,918 |   |
| Notes Payable                                                                                                                      |   |         | 16,458   |   |        |   | 17,782 |   |
| Liabilities of Assets Held for Sale                                                                                                |   |         | 1,934    |   |        |   | 2,462 |   |
| Unearned Income and Other Funds Held                                                                                               |   |         | 183      |   |        |   | 177 |   |
| Total Liabilities                                                                                                                  |   |         | 28,572   |   |        |   | 31,436 |   |
| Commitments and Contingent Liabilities (Note 10)                                                                                   |   |         |     |   |        |   |   |   |
|                                                                                                                               |   |         |     |   |        |   |   |   |
| STOCKHOLDERS' EQUITY                                                                                                               |   |         |     |   |        |   |   |   |
| Common stock, $.01 par value; 200,000,000 shares authorized; 16,809,766 shares outstanding at December 31, 2010 and March 31, 2011 |   |         | 168      |   |        |   | 168 |   |
| Preferred stock, $.01 par value; 100,000,000 shares authorized; none outstanding                                                   |   |         | -        |   |        |   | - |   |
| Additional Paid-in Capital                                                                                                         |   |         | 726,750  |   |        |   | 726,750 |   |
| Accumulated Deficit                                                                                                                |   |         | (525,555 | )      |        |   | (530,960 | ) |
| Total Stockholders' Equity                                                                                                         |   |         | 201,363  |   |        |   | 195,958 |   |
| Total Liabilities and Stockholders' Equity                                                                                         |   | $            | 229,935  |   |        | $      | 227,394 |   |

----

|                                       |   | Three Months Ended March 31, |       |
|--------------------------------------------|--------|------------------------------|------------|
|                                       |   | 2010                         |       |   | 2011 |   |
|                                       |   |                         |       |   |   |   |
| REVENUE:                                   |   |                         |       |   |   |   |
| Mortgage Loan Income                       |   | $                            | 522        |   |   | $ | 353 |   |
| Rental Income                              |   |                         | 410        |   |   |   | 488 |   |
| Investment and Other Income                |   |                         | 76         |   |   |   | 183 |   |
|                                       |   |                         |       |   |   |   |   |   |
| Total Revenue                              |   |                         | 1,008      |   |   |   | 1,024 |   |
|                                       |   |                         |       |   |   |   |   |   |
| COSTS AND EXPENSES:                        |   |                         |       |   |   |   |   |   |
| Operating Expenses for Real Estate Owned   |   |                         | 1,528      |   |   |   | 1,669 |   |
| Professional Fees                          |   |                         | 1,399      |   |   |   | 1,214 |   |
| Management Fees                            |   |                         | 64         |   |   |   | - |   |
| Default and Related Expenses               |   |                         | 206        |   |   |   | 238 |   |
| General and Administrative Expenses        |   |                         | -          |   |   |   | 1,614 |   |
| Organizational Costs                       |   |                         | -          |   |   |   | 190 |   |
| Offering Costs                             |   |                         | -          |   |   |   | 347 |   |
| Interest Expense                           |   |                         | 244        |   |   |   | 778 |   |
| Depreciation and Amortization Expense      |   |                         | 419        |   |   |   | 453 |   |
| Loss/(Gain) on Disposal of Assets          |   |                         | -          |   |   |   | (74 | ) |
| Total Costs and Expenses                   |   |                         | 3,860      |   |   |   | 6,429 |   |
|                                       |   |                         |       |   |   |   |   |   |
| Loss Before Income Taxes                   |   |                         | (2,852     | ) |   |   | (5,405 | ) |
|                                       |   |                         |       |   |   |   |   |   |
| Provision for Income Taxes                 |   |                         | -          |   |   |   | - |   |
| NET LOSS                                   |   | $                            | (2,852     | ) |   | $ | (5,405 | ) |
|                                       |   |                         |       |   |   |   |   |   |
| Net Loss per Share                         |   | $                            | (0.18      | ) |   | $ | (0.32 | ) |
| Weighted Average Common Shares Outstanding |   |                         | 16,093,487 |   |   |   | 16,809,766 |   |

----

|                                         |   |         |       |   |        |   |   | Total           |   |
|----------------------------------------------|--------|--------------|------------|--------|-------------|--------|--------|-----------------|--------|
|                                         |   | Common Stock |       |   | Accumulated |   |   | Stockholders'   |   |
|                                         |   | Shares       |       |   | Amount      |   |   | Paid-in Capital |   |   | Deficit |   |   | Equity |   |
|                                         |   |         |       |   |        |   |   |            |   |   |   |   |   |   |   |
| Balances at December 31, 2010                |   |         | 16,809,766 |   |        | $      | 168    |            |   | $ | 726,750 |   |   | $ | (525,555 | ) |   | $ | 201,363 |   |
|                                         |   |         |       |   |        |   |   |            |   |   |   |   |   |   |   |   |   |   |   |   |
| Net Loss - Three Months Ended March 31, 2011 |   |         | -          |   |        |   | -      |            |   |   | - |   |   |   | (5,405 | ) |   |   | (5,405 | ) |
| Balances at March 31, 2011                   |   |         | 16,809,766 |   |        | $      | 168    |            |   | $ | 726,750 |   |   | $ | (530,960 | ) |   | $ | 195,958 |   |

----

|                                                                        |   | Three Months Ended March 31, |   |
|-----------------------------------------------------------------------------|--------|------------------------------|--------|
|                                                                        |   | 2010                         |   |   | 2011 |   |
|                                                                        |   |                         |   |   |   |   |
| CASH FLOWS - OPERATING ACTIVITIES                                           |   |                         |   |   |   |   |
| Net Loss                                                                    |   | $                            | (2,852 | ) |   | $ | (5,405 | ) |
| Adjustments to reconcile net loss to net cash used in operating activities: |   |                         |   |   |   |   |   |   |
| Gain/(Loss) on Disposal of Assets                                           |   |                         | -      |   |   |   | 74 |   |
| Depreciation and Amortization Expense                                       |   |                         | 419    |   |   |   | 453 |   |
| Imputed Interest on Notes Payable                                           |   |                         | -      |   |   |   | 127 |   |
| Increase (decrease) in cash resulting from changes in:                      |   |                         |   |   |   |   |   |   |
| Due from/to Fund Manager                                                    |   |                         | (1,842 | ) |   |   | - |   |
| Accrued Interest and Other Receivable                                       |   |                         | (45    | ) |   |   | 1,092 |   |
| Deposits and Other Assets                                                   |   |                         | (2,961 | ) |   |   | (1,319 | ) |
| Accounts Payable and Accrued Expenses                                  |   |                         | 636    |   |   |   | 706 |   |
| Accrued Property Taxes                                                      |   |                         | (4,831 | ) |   |   | 312 |   |
| Liabilities of Assets Held for Sale                                         |   |                         | 4,295  |   |   |   | (147 | ) |
| Unearned Income and Other Funds Held                                        |   |                         | 89     |   |   |   | (8 | ) |
| Net cash used in operating activities                                       |   |                         | (7,092 | ) |   |   | (4,115 | ) |
|                                                                        |   |                         |   |   |   |   |   |   |
| CASH FLOWS - INVESTING ACTIVITIES                                           |   |                         |   |   |   |   |   |   |
| Proceeds from Sale/Recovery of Real Estate Owned                            |   |                         | -      |   |   |   | 818 |   |
| Purchases of Property and Equipment                                         |   |                         | -      |   |   |   | (4 | ) |
| Mortgage Loans Fundings                                                     |   |                         | (1,314 | ) |   |   | (555 | ) |
| Mortgage Loan Repayments                                                    |   |                         | 3,500  |   |   |   | 3,018 |   |
| Investment in Real Estate Owned                                             |   |                         | (799   | ) |   |   | (432 | ) |
| Net cash provided by investing activities                                   |   |                         | 1,387  |   |   |   | 2,845 |   |
|                                                                        |   |                         |   |   |   |   |   |   |
| CASH FLOWS - FINANCING ACTIVITIES                                           |   |                         |   |   |   |   |   |   |
| Proceeds from Notes Payable                                                 |   |                         | 9,374  |   |   |   | 1,500 |   |
| Repayments of Notes Payable                                                 |   |                         | -      |   |   |   | (302 | ) |
| Repayments of Borrowings from Manager                                       |   |                         | (780   | ) |   |   | - |   |
| Net cash provided by financing activities                                   |   |                         | 8,594  |   |   |   | 1,198 |   |
|                                                                        |   |                         |   |   |   |   |   |   |
| NET INCREASE/(DECREASE) IN CASH AND CASH EQUIVALENTS                        |   |                         | 2,889  |   |   |   | (72 | ) |
|                                                                        |   |                         |   |   |   |   |   |   |
| CASH AND CASH EQUIVALENTS,  BEGINNING OF PERIOD                   |   |                         | 963    |   |   |   | 831 |   |
|                                                                        |   |                         |   |   |   |   |   |   |
| CASH AND CASH EQUIVALENTS, END OF PERIOD                                    |   | $                            | 3,852  |   |   | $ | 759 |   |
|                                                                        |   |                         |   |   |   |   |   |   |
| SUPPLEMENTAL CASH FLOW INFORMATION                                          |   |                         |   |   |   |   |   |   |
| Interest paid                                                               |   | $                            | 106    |   |   | $ | 374 |   |
| Real Estate Acquired Through Foreclosure                                    |   | $                            | 14,263 |   |   | $ | 8,467 |   |

----

----

----

----

|    |   | December 31, 2010 |    |   | March 31, 2011 |   |
|--------------|--------|-------------------|---------|--------|----------------|--------|
|         |   | Oustanding        |    |   | Valuation      |   |   | Net Carrying |   |   |   |   |   |   |   |   | Oustanding |   |   | Valuation |   |   | Net Carrying |   |   |   |   |   |   |   |
|         |   | Principal         |    |   | Allowance      |   |   | Amount |   |   | Percent |   |   | # |   |   | Principal |   |   | Allowance |   |   | Amount |   |   | Percent |   |   | # |   |
| Arizona      |   | $                 | 231,853 |   |           | $      | (148,451 | ) |   | $ | 83,402 |   |   |   | 67.7 | % |   |   | 17 |   |   | $ | 203,043 |   |   | $ | (124,386 | ) |   | $ | 78,657 |   |   |   | 68.8 | % |   |   | 16 |   |
| California   |   |              | 155,474 |   |           |   | (127,881 | ) |   |   | 27,593 |   |   |   | 22.4 | % |   |   | 17 |   |   |   | 115,762 |   |   |   | (90,133 | ) |   |   | 25,629 |   |   |   | 22.4 | % |   |   | 16 |   |
| New Mexico   |   |              | 5,251   |   |           |   | (2,127 | ) |   |   | 3,124 |   |   |   | 2.5 | % |   |   | 2 |   |   |   | 1,062 |   |   |   | (43 | ) |   |   | 1,019 |   |   |   | 0.9 | % |   |   | 1 |   |
| Idaho        |   |              | 17,306  |   |           |   | (15,681 | ) |   |   | 1,625 |   |   |   | 1.3 | % |   |   | 1 |   |   |   | 17,306 |   |   |   | (15,724 | ) |   |   | 1,582 |   |   |   | 1.4 | % |   |   | 1 |   |
| Utah         |   |              | 7,456   |   |           |   | - |   |   |   | 7,456 |   |   |   | 6.1 | % |   |   | 1 |   |   |   | 7,406 |   |   |   | - |   |   |   | 7,406 |   |   |   | 6.5 | % |   |   | 1 |   |
| Total        |   | $                 | 417,340 |   |           | $      | (294,140 | ) |   | $ | 123,200 |   |   |   | 100.0 | % |   |   | 38 |   |   | $ | 344,579 |   |   | $ | (230,286 | ) |   | $ | 114,293 |   |   |   | 100.0 | % |   |   | 35 |   |

|   | · | Fixed Interest Rate Loans.  At March 31, 2011, fixed interest rate loans accounted for 55.8% of the total outstanding principal of our commercial mortgage loans and the average weighted interest rate on these loans was 9.39% per annum. |
|--------|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | Variable Interest Rate Loans.  All variable interest rate loans are indexed to the Wall Street Journal Prime Interest Rate, or Prime, all of which are subject to interest rate floors and none of which are subject to interest rate ceilings. At March 31, 2011, the weighted average interest rate on our variable interest rate loans, which accounted for 44.2% of the outstanding principal amount in our portfolio of commercial mortgage loans, was 13.32% per annum.  As of December 31, 2010 and March 31, 2011, the weighted average contractual interest rates on our variable rate loans (including loans in non-accrual status) was Prime plus 9.85% and Prime plus 10.07%, respectively. The Prime rate was 3.25% per annum at December 31, 2010 and March 31, 2011. |
|--------|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

|                        |   | December 31, 2010 |    |   | March 31, 2011 |   |
|-----------------------------|--------|-------------------|---------|--------|----------------|--------|
|                        |   | Fixed             |    |   | Variable       |   |   | Total |   |   | Fixed |   |   | Variable |   |   | Total |   |
|                        |   | Rate              |    |   | Rate           |   |   | Loan |   |   | Rate |   |   | Rate |   |   | Loan |   |
|                        |   | Loans             |    |   | Loans          |   |   | Portfolio |   |   | Loans |   |   | Loans |   |   | Portfolio |   |
|                        |   |              |    |   |           |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Total Principal Outstanding |   | $                 | 225,204 |   |           | $      | 192,136 |   |   | $ | 417,340 |   |   | $ | 192,183 |   |   | $ | 152,396 |   |   | $ | 344,579 |   |
| Less Valuation Allowance    |   |              |    |   |           |   |   |   |   |   | (294,140 | ) |   |   |   |   |   |   |   |   |   |   | (230,286 | ) |
| Net Principal Outstanding   |   |              |    |   |           |   |   |   |   | $ | 123,200 |   |   |   |   |   |   |   |   |   |   | $ | 114,293 |   |
| % Total Principal           |   |              | 54.0    | %      |           |   | 46.0 | % |   |   | 100.0 | % |   |   | 55.8 | % |   |   | 44.2 | % |   |   | 100.0 | % |
| Weighted Average Rate       |   |              | 9.51    | %      |           |   | 13.10 | % |   |   | 11.16 | % |   |   | 9.39 | % |   |   | 13.32 | % |   |   | 11.13 | % |
| Number of Loans             |   |              | 21      |   |           |   | 17 |   |   |   | 38 |   |   |   | 19 |   |   |   | 16 |   |   |   | 35 |   |
| Average Principal Balance   |   | $                 | 10,724  |   |           | $      | 11,302 |   |   | $ | 10,983 |   |   | $ | 10,115 |   |   | $ | 9,525 |   |   | $ | 9,845 |   |

| March 31, 2011                       |   |
|--------------------------------------|--------|
|                                 |   |
| Quarter                              |   | Amount |   |   | Percent |   |   | # |   |
| Matured                              |   | $ | 209,992 |   |   |   | 60.9 | % |   |   | 22 |   |
| Q2 2011                              |   |   | 1,201 |   |   |   | 0.3 | % |   |   | 2 |   |
| Q4 2011                              |   |   | 36,358 |   |   |   | 10.6 | % |   |   | 4 |   |
| Q1 2012                              |   |   | 3,019 |   |   |   | 0.9 | % |   |   | 2 |   |
| Q3 2012                              |   |   | 93,373 |   |   |   | 27.1 | % |   |   | 2 |   |
| Q3 2013                              |   |   | 434 |   |   |   | 0.1 | % |   |   | 2 |   |
| Q1 2014                              |   |   | 202 |   |   |   | 0.1 | % |   |   | 1 |   |
| Total                                |   |   | 344,579 |   |   |   | 100.0 | % |   |   | 35 |   |
|                                 |   |   |   |   |   |   |   |   |   |   |   |   |
| Less:  Valuation Allowance |   |   | (230,286 | ) |   |   |   |   |   |   |   |   |
|                                 |   |   |   |   |   |   |   |   |   |   |   |   |
| Net Carrying Value                   |   | $ | 114,293 |   |   |   |   |   |   |   |   |   |

----

----

|       |   | March 31, 2011 |   |
|------------|--------|----------------|--------|
|       |   | Percent of     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   | Non-Accrued |   |   |   |   |
|       |   | Outstanding    |   |   |   |   |   | Outstanding |   |   | Valuation |   |   | Net Carrying |   |   | Accrued |   |   | Note |   |   |   |   |
|       |   | Principal      |   |   | # |   |   | Principal |   |   | Allowance |   |   | Amount |   |   | Interest |   |   | Interest |   |   | Total |   |
| Arizona    |   |           | 59.3   | % |   |   | 10 |   |   | $ | 199,205 |   |   | $ | (124,385 | ) |   | $ | 74,820 |   |   | $ | 3,117 |   |   | $ | 2,824 |   |   | $ | 80,761 |   |
| Idaho      |   |           | 5.1    | % |   |   | 1 |   |   |   | 17,306 |   |   |   | (15,724 | ) |   |   | 1,582 |   |   |   | 667 |   |   |   | 523 |   |   |   | 2,772 |   |
| California |   |           | 33.1   | % |   |   | 14 |   |   |   | 111,062 |   |   |   | (90,133 | ) |   |   | 20,929 |   |   |   | 3,110 |   |   |   | 4,301 |   |   |   | 28,340 |   |
| New Mexico |   |           | 0.3    | % |   |   | 1 |   |   |   | 1,063 |   |   |   | (43 | ) |   |   | 1,020 |   |   |   | - |   |   |   | 23 |   |   |   | 1,043 |   |
| Utah       |   |           | 2.2    | % |   |   | 1 |   |   |   | 7,406 |   |   |   | - |   |   |   | 7,406 |   |   |   | - |   |   |   | 176 |   |   |   | 7,582 |   |
|       |   |           | 100.0  | % |   |   | 27 |   |   | $ | 336,042 |   |   | $ | (230,285 | ) |   | $ | 105,757 |   |   | $ | 6,894 |   |   | $ | 7,847 |   |   | $ | 120,498 |   |

|       |   | December 31, 2010 |   |
|------------|--------|-------------------|--------|
|       |   | Percent of        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   | Non-Accrued |   |   |   |   |
|       |   | Outstanding       |   |   |   |   |   | Outstanding |   |   | Valuation |   |   | Net Carrying |   |   | Accrued |   |   | Note |   |   |   |   |
|       |   | Principal         |   |   | # |   |   | Principal |   |   | Allowance |   |   | Amount |   |   | Interest |   |   | Interest |   |   | Total |   |
| Arizona    |   |              | 55.8   | % |   |   | 11 |   |   | $ | 227,167 |   |   | $ | (148,246 | ) |   | $ | 78,921 |   |   | $ | 3,722 |   |   | $ | 12,069 |   |   | $ | 94,712 |   |
| Idaho      |   |              | 4.2    | % |   |   | 1 |   |   |   | 17,306 |   |   |   | (15,681 | ) |   |   | 1,625 |   |   |   | 667 |   |   |   | 2,118 |   |   |   | 4,410 |   |
| California |   |              | 36.9   | % |   |   | 15 |   |   |   | 150,248 |   |   |   | (127,881 | ) |   |   | 22,367 |   |   |   | 3,129 |   |   |   | 19,914 |   |   |   | 45,410 |   |
| New Mexico |   |              | 1.3    | % |   |   | 2 |   |   |   | 5,251 |   |   |   | (2,127 | ) |   |   | 3,124 |   |   |   | - |   |   |   | 567 |   |   |   | 3,691 |   |
| Utah       |   |              | 1.8    | % |   |   | 1 |   |   |   | 7,456 |   |   |   | - |   |   |   | 7,456 |   |   |   | - |   |   |   | 502 |   |   |   | 7,958 |   |
|       |   |              | 100.0  | % |   |   | 30 |   |   | $ | 407,428 |   |   | $ | (293,935 | ) |   | $ | 113,493 |   |   | $ | 7,518 |   |   | $ | 35,170 |   |   | $ | 156,181 |   |

|              |   | March 31, 2011            |   |
|-------------------|--------|-------------------------------------|--------|
|              |   | Percent ofOutstandingPrincipal |   |   | # |   |   | OutstandingPrincipal |   |   | ValuationAllowance |   |   | Net CarryingAmount |   |   | AccruedInterest |   |   | Non-AccruedNoteInterest |   |   | Total |   |
| Pre-entitled Land |   |                                | 35.3   | % |   |   | 5 |   |   | $ | 118,645 |   |   | $ | (103,585 | ) |   | $ | 15,060 |   |   | $ | 3,851 |   |   | $ | 4,026 |   |   | $ | 22,937 |   |
| Entitled Land     |   |                                | 34.2   | % |   |   | 15 |   |   |   | 114,862 |   |   |   | (94,849 | ) |   |   | 20,013 |   |   |   | 2,788 |   |   |   | 3,329 |   |   |   | 26,130 |   |
| Construction      |   |                                | 30.5   | % |   |   | 7 |   |   |   | 102,535 |   |   |   | (31,851 | ) |   |   | 70,684 |   |   |   | 255 |   |   |   | 492 |   |   |   | 71,431 |   |
|              |   |                                | 100.0  | % |   |   | 27 |   |   | $ | 336,042 |   |   | $ | (230,285 | ) |   | $ | 105,757 |   |   | $ | 6,894 |   |   | $ | 7,847 |   |   | $ | 120,498 |   |

|              |   | December 31, 2010         |   |
|-------------------|--------|-------------------------------------|--------|
|              |   | Percent ofOutstandingPrincipal |   |   | # |   |   | OutstandingPrincipal |   |   | ValuationAllowance |   |   | Net CarryingAmount |   |   | AccruedInterest |   |   | Non-AccruedNoteInterest |   |   | Total |   |
| Pre-entitled Land |   |                                | 35.7   | % |   |   | 6 |   |   | $ | 145,551 |   |   | $ | (127,785 | ) |   | $ | 17,766 |   |   | $ | 4,462 |   |   | $ | 18,920 |   |   | $ | 41,148 |   |
| Entitled Land     |   |                                | 37.8   | % |   |   | 16 |   |   |   | 153,889 |   |   |   | (131,436 | ) |   |   | 22,453 |   |   |   | 2,801 |   |   |   | 15,866 |   |   |   | 41,120 |   |
| Construction      |   |                                | 26.5   | % |   |   | 8 |   |   |   | 107,988 |   |   |   | (34,714 | ) |   |   | 73,274 |   |   |   | 255 |   |   |   | 384 |   |   |   | 73,913 |   |
|              |   |                                | 100.0  | % |   |   | 30 |   |   | $ | 407,428 |   |   | $ | (293,935 | ) |   | $ | 113,493 |   |   | $ | 7,518 |   |   | $ | 35,170 |   |   | $ | 156,181 |   |

----

|                                                              |   | As of and Year     |     |   | As of and 3 Mos. |   |
|-------------------------------------------------------------------|--------|--------------------|----------|--------|------------------|--------|
|                                                              |   | Ended December 31, |     |   | Ended March 31,  |   |
|                                                              |   | 2010               |     |   | 2011             |   |
|                                                              |   | (in thousands)     |     |
| Loans in Default - Impairment Status:                             |   |               |     |   |             |   |
| Impaired loans in default                                         |   | $                  | 346,790  |   |             | $      | 276,980 |   |
| Non-impaired loans in default                                     |   |               | 60,638   |   |             |   | 59,062 |   |
| Total loans in default                                            |   | $                  | 407,428  |   |             | $      | 336,042 |   |
|                                                              |   |               |     |   |             |   |   |   |
| Allowance for Credit Loss / Valuation Allowance on Impaired Loans |   |               |     |   |             |   |   |   |
| Impaired loans in default                                         |   | $                  | 346,790  |   |             | $      | 276,980 |   |
| Less: Allowance for credit loss / valuation allowance             |   |               | (293,935 | )      |             |   | (230,286 | ) |
| Net carrying value of impaired loans                              |   | $                  | 52,855   |   |             | $      | 46,694 |   |
|                                                              |   |               |     |   |             |   |   |   |
| Average investment for impaired loans during period held          |   | $                  | 337,057  |   |             | $      | 277,065 |   |

----

|   | 1. | We reviewed the status of each of our loans to ascertain the likelihood that we will collect all amounts due under the terms of the loans at maturity based on current real estate and credit market conditions. |
|--------|----|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | 2. | As of December 31, 2010, 74% of our outstanding loan portfolio was subjected to independent third-party valuation. For this population, we obtained a letter from our third-party valuation firm concluding there was no material diminution in the fair value indications as of March 31, 2011.  For the balance of the portfolio that was not subject to complete valuation at December 31, 2010, we engaged third-party valuation firms to perform valuations as of March 31, 2011. |
|--------|----|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

|   | 3. | For projects in which we have received a bona fide written third-party offer to buy our loan, or the borrower has received a bona fide written third-party offer to buy the related project, we generally utilized the offer amount in cases in which the offer exceeded the valuation conclusion reached by the independent valuation firms (unless the offer was representative of an actual transaction that is expected to close). Such offers are only considered if we deem the offer to be valid, reasonable and negotiable, and we believe the offeror has the financial wherewithal to execute the transaction. At March 31, 2011, we utilized an offer for only one loan based on the terms of the transaction which closed subsequent to March 31, 2011. |
|--------|----|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | 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 market participant data was insufficient or other assumptions were not readily 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 a 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 fair value. |
|--------|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | For the projects containing partially or fully developed lots, the development approach was generally utilized, with assumptions made for pricing trends, absorption projections, holding costs, and the relative risk given these assumptions. Annual discount rates utilized by the valuation firms ranged from 10.5% to 30%. The assumptions 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 the net present value at a chosen yield rate. The assumptions were based on currently observable available market data. |
|--------|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

|   | · | According to a Bloomberg news article in March 2011, US home builders’ confidence improved only slightly to 17 by March 2011, up from 16 in January. The National Association of Home Builders Market Index is a seasonally-adjusted index based on a monthly survey of home builders of single-family detached home and is comprised of three survey components: present sales, six month sales expectations and traffic of prospective buyers. The index results range between one and 100, with one being the worst and 100 being the best. An index level of 50 indicates that home builders view sales conditions as equally good as poor. |
|--------|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

|   | · | According to the press release regarding the Federal Reserve’s April 2011 meeting, investment in nonresidential structures is still weak and the housing sector continues to be depressed. The Federal Reserve’s March 2011 report pointed to some modest signs of improvement that continue to surface. Prices of commercial real estate changed little, on balance, over September and October 2010, holding in the relative narrow range that had prevailed since the spring when the steep decline in these prices ended. While the economic recovery is on firmer footing than it was in January 2011, the housing sector continues to be depressed. |
|--------|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | The International Monetary Fund (IMF) in April 2011 cut its US growth forecast for 2011 from 3.0 percent to 2.8 percent.  The IMF acknowledges that there is little recovery in the labor market and states “after shedding more than 8.5 million jobs in 2008 and 2009, the labor market has added just under 1.5 million jobs since the trough, barely sufficient to keep up with the growth of the working-age population”. |
|--------|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | In a March 2011 Fightback.com article, which summarizes numerous government and industry reports on a periodic basis, it was stated that home prices were near post-bust lows, there has been a double digit dip in new home starts and it is anticipated that the market will remain at or near the bottom all year long. |
|--------|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | According to Case-Shiller information as of March 22, 2011, it is anticipated that US home prices won’t bottom until 2012 as a result of persistently weak economic fundamentals – high unemployment, a large and growing supply of unsold homes, and tighter mortgage credit. |
|--------|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | According to a Moody’s report published in April 2011, Commercial Real Estate (CRE) is down 4.9% from 12 months earlier and only 0.8% about its post-peak low set in August 2010.   The declined is a result of a large percentage of distressed sales that can impact pricing and make the index very volatile. |
|--------|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

|                           |   | March 31, |    |
|--------------------------------|--------|-----------|---------|
|                           |   | 2011      |    |
| Balance at beginning of period |   | $         | 294,140 |   |
|                           |   |      |    |   |
| Net charge offs                |   |      | (63,854 | ) |
| Balance at end of period       |   | $         | 230,286 |   |

----

|                                   |   | December 31, 2010 |   |   | March 31, 2011 |   |
|---------------------------------------------|--------|-------------------|--------|--------|----------------|--------|
|                                        |   | Significant       |   |   |           |   |   |   |   |   | Significant |   |   |   |   |   |   |   |
|                                        |   | Other             |   |   | Significant    |   |   |   |   |   | Other |   |   | Significant |   |   |   |   |
|                                        |   | Observable        |   |   | Unobservable   |   |   |   |   |   | Observable |   |   | Unobservable |   |   |   |   |
|                                        |   | Inputs            |   |   | Inputs         |   |   |   |   |   | Inputs |   |   | Inputs |   |   |   |   |
|                                        |   | (Level 2)         |   |   | (Level 3)      |   |   | Total |   |   | (Level 2) |   |   | (Level 3) |   |   | Total |   |
| Description:                                |   |              |   |   |           |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Net Mortgage Loans:                         |   |              |   |   |           |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Pre-entitled Land:                          |   |              |   |   |           |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Held for Investment                         |   | $                 | -      |   |           | $      | 1,405 |   |   | $ | 1,405 |   |   | $ | - |   |   | $ | 1,381 |   |   | $ | 1,381 |   |
| Processing Entitlements                     |   |              | -      |   |           |   | 16,363 |   |   |   | 16,363 |   |   |   | - |   |   |   | 13,679 |   |   |   | 13,679 |   |
|                                        |   |              | -      |   |           |   | 17,768 |   |   |   | 17,768 |   |   |   | - |   |   |   | 15,060 |   |   |   | 15,060 |   |
| Entitled Land:                              |   |              |   |   |           |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Held for Investment                         |   |              | -      |   |           |   | 6,425 |   |   |   | 6,425 |   |   |   | - |   |   |   | 4,291 |   |   |   | 4,291 |   |
| Infrastructure under Construction           |   |              | -      |   |           |   | 11,612 |   |   |   | 11,612 |   |   |   | - |   |   |   | 11,452 |   |   |   | 11,452 |   |
| Improved and Held for Vertical Construction |   |              | -      |   |           |   | 5,549 |   |   |   | 5,549 |   |   |   | - |   |   |   | 5,471 |   |   |   | 5,471 |   |
|                                        |   |              | -      |   |           |   | 23,586 |   |   |   | 23,586 |   |   |   | - |   |   |   | 21,214 |   |   |   | 21,214 |   |
| Construction & Existing Structures:     |   |              |   |   |           |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| New Structure - Construction in-process     |   |              | 964    |   |           |   | 15,550 |   |   |   | 16,514 |   |   |   | - |   |   |   | 15,292 |   |   |   | 15,292 |   |
| Existing Structure Held for Investment      |   |              | 3,737  |   |           |   | 4,480 |   |   |   | 8,217 |   |   |   | 4,755 |   |   |   | 2,635 |   |   |   | 7,390 |   |
| Existing Structure - Improvements           |   |              | -      |   |           |   | 57,115 |   |   |   | 57,115 |   |   |   | - |   |   |   | 55,337 |   |   |   | 55,337 |   |
|                                        |   |              | 4,701  |   |           |   | 77,145 |   |   |   | 81,846 |   |   |   | 4,755 |   |   |   | 73,264 |   |   |   | 78,019 |   |
| Total                                       |   | $                 | 4,701  |   |           | $      | 118,499 |   |   | $ | 123,200 |   |   | $ | 4,755 |   |   | $ | 109,538 |   |   | $ | 114,293 |   |

|                        |   | Mortgage   |    |
|-----------------------------|--------|------------|---------|
|                        |   | Loans, net |    |
|                        |   |       |    |
| Balances, December 31, 2010 |   | $          | 118,499 |   |
|                        |   |       |    |   |
| Mortgage Loan Fundings      |   |       | 735     |   |
| Mortgage Loan Repayments    |   |       | (3,018  | ) |
| Transfers to REO            |   |       | (6,678  | ) |
|                        |   |       |    |   |
| Balances, March 31, 2011    |   | $          | 109,538 |   |

----

|                                        |   | December 31, 2010                                   |     |   | March 31, 2011 |   |
|---------------------------------------------|--------|-----------------------------------------------------|----------|--------|----------------|--------|
|                                        |   | (in thousands, except for percentage and unit data) |     |
|                                        |   | Amount                                              |     |   | %              |   |   | # |   |   | Amount |   |   | % |   |   | # |   |
| Pre-entitled Land:                          |   |                                                |     |   |           |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Held for Investment                         |   | $                                                   | 6,100    |   |           |   | 1.5 | % |   |   | 1 |   |   | $ | 6,100 |   |   |   | 1.8 | % |   |   | 1 |   |
| Processing Entitlements                     |   |                                                | 139,452  |   |           |   | 33.3 | % |   |   | 5 |   |   |   | 112,545 |   |   |   | 32.7 | % |   |   | 4 |   |
|                                        |   |                                                | 145,552  |   |           |   | 34.8 | % |   |   | 6 |   |   |   | 118,645 |   |   |   | 34.5 | % |   |   | 5 |   |
| Entitled Land:                              |   |                                                |     |   |           |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Held for Investment                         |   |                                                | 73,462   |   |           |   | 17.6 | % |   |   | 13 |   |   |   | 34,232 |   |   |   | 9.9 | % |   |   | 12 |   |
| Infrastructure under Construction           |   |                                                | 55,532   |   |           |   | 13.3 | % |   |   | 3 |   |   |   | 55,714 |   |   |   | 16.2 | % |   |   | 3 |   |
| Improved and Held for Vertical Construction |   |                                                | 26,096   |   |           |   | 6.3 | % |   |   | 2 |   |   |   | 26,117 |   |   |   | 7.6 | % |   |   | 2 |   |
|                                        |   |                                                | 155,090  |   |           |   | 37.2 | % |   |   | 18 |   |   |   | 116,063 |   |   |   | 33.7 | % |   |   | 17 |   |
| Construction & Existing Structures:     |   |                                                |     |   |           |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| New Structure - Construction in-process     |   |                                                | 46,808   |   |           |   | 11.2 | % |   |   | 7 |   |   |   | 45,673 |   |   |   | 13.2 | % |   |   | 6 |   |
| Existing Structure Held for Investment      |   |                                                | 12,775   |   |           |   | 3.1 | % |   |   | 5 |   |   |   | 8,861 |   |   |   | 2.6 | % |   |   | 5 |   |
| Existing Structure - Improvements           |   |                                                | 57,115   |   |           |   | 13.7 | % |   |   | 2 |   |   |   | 55,337 |   |   |   | 16.0 | % |   |   | 2 |   |
|                                        |   |                                                | 116,698  |   |           |   | 28.0 | % |   |   | 14 |   |   |   | 109,871 |   |   |   | 31.8 | % |   |   | 13 |   |
| Total                                       |   |                                                | 417,340  |   |           |   | 100.0 | % |   |   | 38 |   |   |   | 344,579 |   |   |   | 100.0 | % |   |   | 35 |   |
|                                        |   |                                                |     |   |           |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Less: Valuation Allowance                   |   |                                                | (294,140 | )      |           |   |   |   |   |   |   |   |   |   | (230,286 | ) |   |   |   |   |   |   |   |   |
| Net Carrying Value                          |   | $                                                   | 123,200  |   |           |   |   |   |   |   |   |   |   | $ | 114,293 |   |   |   |   |   |   |   |   |   |

----

|                      |   | December 31, 2010                                   |     |   | March 31, 2011 |   |
|---------------------------|--------|-----------------------------------------------------|----------|--------|----------------|--------|
|                      |   | (in thousands, except for percentage and unit data) |     |
|                      |   | Amount                                              |     |   | %              |   |   | # |   |   | Amount |   |   | % |   |   | # |   |
|                      |   |                                                |     |   |           |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Residential               |   | $                                                   | 204,013  |   |           |   | 48.8 | % |   |   | 28 |   |   | $ | 176,231 |   |   |   | 51.1 | % |   |   | 27 |   |
| Mixed Use                 |   |                                                | 146,376  |   |           |   | 35.1 | % |   |   | 3 |   |   |   | 107,089 |   |   |   | 31.1 | % |   |   | 2 |   |
| Commercial                |   |                                                | 65,888   |   |           |   | 15.8 | % |   |   | 6 |   |   |   | 60,196 |   |   |   | 17.5 | % |   |   | 5 |   |
| Industrial                |   |                                                | 1,063    |   |           |   | 0.3 | % |   |   | 1 |   |   |   | 1,063 |   |   |   | 0.3 | % |   |   | 1 |   |
| Total                     |   |                                                | 417,340  |   |           |   | 100.0 | % |   |   | 38 |   |   |   | 344,579 |   |   |   | 100.0 | % |   |   | 35 |   |
|                      |   |                                                |     |   |           |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Less: Valuation Allowance |   |                                                | (294,140 | )      |           |   |   |   |   |   |   |   |   |   | (230,286 | ) |   |   |   |   |   |   |   |   |
| Net Carrying Value        |   | $                                                   | 123,200  |   |           |   |   |   |   |   |   |   |   | $ | 114,293 |   |   |   |   |   |   |   |   |   |

----

----

|       |   | December 31, 2010    |   |   | March 31, 2011 |   |
|------------|--------|--------------------------------|--------|--------|--------------------------|--------|
|       |   | Held For Development |   |   | Held for Sale  |   |   | Held For Development |   |   | Held for Sale |   |
|       |   | # of                      |   |   | Aggregate Net       |   |   | # of |   |   | Aggregate Net |   |   | # of |   |   | Aggregate Net |   |   | # of |   |   | Aggregate Net |   |
| State      |   | Projects                       |   |   | Carrying Value      |   |   | Projects |   |   | Carrying Value |   |   | Projects |   |   | Carrying Value |   |   | Projects |   |   | Carrying Value |   |
| California |   |                           | 3      |   |                     | $      | 8,813 |   |   |   | 1 |   |   | $ | 1,033 |   |   |   | 3 |   |   | $ | 8,813 |   |   |   | 2 |   |   | $ | 3,415 |   |
| Texas      |   |                           | 2      |   |                     |   | 27,308 |   |   |   | 4 |   |   |   | 9,741 |   |   |   | 2 |   |   |   | 27,110 |   |   |   | 4 |   |   |   | 9,758 |   |
| Arizona    |   |                           | 8      |   |                     |   | 16,996 |   |   |   | 17 |   |   |   | 14,082 |   |   |   | 8 |   |   |   | 16,628 |   |   |   | 18 |   |   |   | 17,278 |   |
| Minnesota  |   |                           | 2      |   |                     |   | 4,525 |   |   |   | - |   |   |   | - |   |   |   | 2 |   |   |   | 4,525 |   |   |   | - |   |   |   | - |   |
| Nevada     |   |                           | -      |   |                     |   | - |   |   |   | 1 |   |   |   | 2,848 |   |   |   | - |   |   |   | - |   |   |   | 1 |   |   |   | 2,830 |   |
| New Mexico |   |                           | -      |   |                     |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | 1 |   |   |   | 2,354 |   |
| Idaho      |   |                           | -      |   |                     |   | - |   |   |   | 1 |   |   |   | 4,126 |   |   |   | - |   |   |   | - |   |   |   | 1 |   |   |   | 4,126 |   |
| Total      |   |                           | 15     |   |                     | $      | 57,642 |   |   |   | 24 |   |   | $ | 31,830 |   |   |   | 15 |   |   | $ | 57,076 |   |   |   | 27 |   |   | $ | 39,761 |   |

----

----

|                                                                                                                                                                                                                                                                                          |   | December 31, 2010 |   |   | March 31, 2011 |   |
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|------------------------|--------|--------|--------------------------|--------|
|                                                                                                                                                                                                                                                                                          |   | (in thousands)         |   |
| $9.5 million note dated March 9, 2010 secured by commercial building with a carrying value of $20.7 million, assignment of rents, and tenant notes receivable with a principal balance of $1.6 million, bears annual interest at 12%, matures September 2011 (subject to six month extension) |   | $                      | 7,500  |   |                     | $      | 7,500 |   |
|                                                                                                                                                                                                                                                                                          |   |                   |   |   |                     |   |   |   |
| $5.3 million note dated December 31, 2009, secured by residential lots, non-interest bearing (12% imputed interest), matures December 31, 2012, unamortized discount of $1.0 million at March 31, 2011                                                                                        |   |                   | 4,182  |   |                     |   | 4,309 |   |
|                                                                                                                                                                                                                                                                                          |   |                   |   |   |                     |   |   |   |
| $3.6 million note payable to a bank dated February 1, 2010, secured by multifamily residential complex with a carrying value of $2.6 million and a  note receivable with a principal balance of $3.7 million, bears annual interest at 12%, matures February 2012                   |   |                   | 2,862  |   |                     |   | 2,587 |   |
|                                                                                                                                                                                                                                                                                          |   |                   |   |   |                     |   |   |   |
| $2.5 million line of credit payable to a bank (maximum facility reduced to $1.6 million in January 2011), dated June 30, 2010, secured by certain certificates of deposit, bears annual interest at 4.5%, matures May 2011                                                                    |   |                   | 1,625  |   |                     |   | 1,625 |   |
|                                                                                                                                                                                                                                                                                          |   |                   |   |   |                     |   |   |   |
| $1.5 million note payable to a bank dated January 13, 2011, secured by certain finished residential lots owned with a carrying value of $1.0 million and a  note receivable with a principal balance of $41.7 million, bears annual interest at 12%, matures January 2012           |   |                   | -      |   |                     |   | 1,500 |   |
|                                                                                                                                                                                                                                                                                          |   |                   |   |   |                     |   |   |   |
| $450,000 note payable dated May 1, 2009, unsecured but guaranteed by CEO, bearing annual interest of 8%, matures May 1, 2013                                                                                                                                                                  |   |                   | 289    |   |                     |   | 261 |   |
|                                                                                                                                                                                                                                                                                          |   |                   |   |   |                     |   |   |   |
| Totals                                                                                                                                                                                                                                                                                        |   | $                      | 16,458 |   |                     | $      | 17,782 |   |

|                                           |   | December 31, |   |   | March 31, |   |
|------------------------------------------------|--------|-------------------|--------|--------|----------------|--------|
|                                           |   | 2010              |   |   | 2011           |   |
|                                           |   |              |   |   |           |   |
| Furniture and equipment                        |   | $                 | 1,122  |   |           | $      | 1,122 |   |
| Leasehold improvements                         |   |              | 645    |   |           |   | 645 |   |
| Computer and communication equipment           |   |              | 1,146  |   |           |   | 1,145 |   |
| Automobile and Other                           |   |              | 61     |   |           |   | 61 |   |
| Total                                          |   |              | 2,974  |   |           |   | 2,973 |   |
| Less accumulated depreciation and amortization |   |              | (1,512 | )      |           |   | (1,633 | ) |
|                                           |   |              |   |   |           |   |   |   |
| Property and equipment, net of accumulated     |   |              |   |   |           |   |   |   |
| depreciation and amortization                  |   | $                 | 1,462  |   |           | $      | 1,340 |   |

----

| Years ending |   | Amount |   |
|-------------------|--------|--------|--------|
| 2011              |   |   | 551    |   |
| 2012              |   |   | 734    |   |
| 2013              |   |   | 741    |   |
| 2014              |   |   | 762    |   |
| 2015              |   |   | 762    |   |
| Thereafter        |   |   | 1,112  |   |
| Total             |   | $      | 4,662  |   |

----

----

|                                                        |   | Three months ended March 31, |       |
|-------------------------------------------------------------|--------|--------------------------------------------------|------------|
|                                                        |   | 2010                                             |       |   | 2011 |   |
| Net Loss (in thousands)                                     |   | $                                                | (2,852     | ) |   | $ | (5,405 | ) |
|                                                        |   |                                             |       |   |   |   |   |   |
| Weighted Average Units Outstanding (rounded)                |   |                                             | 73,038     |   |   |   | 73,038 |   |
| Conversion Factor                                           |   |                                             | 220.3419   |   |   |   | 220.3419 |   |
|                                                        |   |                                             |       |   |   |   |   |   |
| Weighted Average Common Shares Outstanding                  |   |                                             | 16,093,487 |   |   |   | 16,093,487 |   |
| Add: Weighted Average Common Shares for purchase of Manager |   |                                             |       |   |   |   | 716,279 |   |
|                                                        |   |                                             |       |   |   |   |   |   |
| Weighted Average Common Shares Outstanding                  |   |                                             | 16,093,487 |   |   |   | 16,809,766 |   |
|                                                        |   |                                             |       |   |   |   |   |   |
| Net Loss per Share                                          |   | $                                                | (0.18      | ) |   | $ | (0.32 | ) |

----

|                             |   | December 31, 2010 |   |   | March 31, 2011 |   |
|----------------------------------|--------|-----------------------------|--------|--------|--------------------------|--------|
|                             |   | Loans Held             |   |   | Loans Held          |   |   |   |   |   | Loans Held |   |   | Loans Held |   |   |   |   |
|                             |   | to Maturity            |   |   | for Sale            |   |   | Total |   |   | to Maturity |   |   | for Sale |   |   | Total |   |
| Undispersed Loans-in-Process per |   |                        |   |   |                     |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Note Agreement                   |   | $                           | -      |   |                     | $      | 56,094 |   |   | $ | 56,094 |   |   | $ | - |   |   | $ | 40,283 |   |   | $ | 40,283 |   |
| Less: amounts not to be funded   |   |                        | -      |   |                     |   | (44,626 | ) |   |   | (44,626 | ) |   |   | - |   |   |   | (31,180 | ) |   |   | (31,180 | ) |
| Undispersed Loans-in-Process per |   |                        |   |   |                     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Financial Statements             |   | $                           | -      |   |                     | $      | 11,468 |   |   | $ | 11,468 |   |   | $ | - |   |   | $ | 9,103 |   |   | $ | 9,103 |   |

|                                |   | December 31, |   |   | March 31, |   |
|-------------------------------------|--------|-------------------|--------|--------|----------------|--------|
| Loans-in-Process Allocation:        |   | 2010              |   |   | 2011           |   |
| Unfunded Interest Reserves          |   | $                 | 6,034  |   |           | $      | 4,723 |   |
| Construction/Operations Commitments |   |              | 2,466  |   |           |   | 1,583 |   |
| Reserve for Protective Advances     |   |              | 1,268  |   |           |   | 1,097 |   |
| Real Estate Taxes                   |   |              | 1,700  |   |           |   | 1,700 |   |
| Total Loan-in-Process               |   | $                 | 11,468 |   |           | $      | 9,103 |   |

----

----

----

----

|   | · | If our liquidity continues to dissipate and we are unable to meet our obligations, we may be forced to sell certain of our assets for a price at or below the current book value of the assets, which could result in a loss to us or we may seek other available alternative strategies; Despite management’s efforts, there is no assurance that we will be successful in selling real estate assets in a timely manner to sufficiently fund operations or obtaining additional financing, and if available, there are no assurances that the financing will be at commercially acceptable terms. Failure to address this liquidity issue within the timeframe permitted may have a further material adverse effect on our business, results of operations, and financial position. These conditions and circumstances raise substantial doubt as to our ability to continue operating as a going concern; |
|--------|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | Upon any closing of the proposed NW Capital $50 million convertible debt transaction, which is not assured, NW Capital will have substantial approval rights over our business, and upon conversion of the loan, will control a substantial equity interest in us, and, accordingly, will have substantial influence over us, and may not necessarily act in the best interest of all stockholders. |
|--------|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | Various disputes have arisen regarding the Conversion Transactions and we are a named defendant in three class-action proceedings and a separate suit initiated by two members of the Fund.  Additionally, the SEC has notified us that it is conducting an investigation related to us.  We cannot predict when or how these matters will be resolved and we could be subject to significant money damages and legal costs, which could further harm our business and results of operations; |
|--------|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | We are subject to the risk that the economy and real estate and other markets will not improve in the near future, which could continue to harm our ability to sell or dispose of the assets we own and the ability of our borrowers to pay obligations under, or repay our commercial mortgage loans on maturity or obtain take-out financing in a timely manner, on reasonable terms, or at all, which would further harm our liquidity and operating results; |
|--------|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | Real estate assets we may acquire in foreclosure or through other means are generally non-earning assets. In the event of foreclosure, we would also be responsible for the payment of past due property taxes, a liability not currently recorded, but reflected in our asset valuation, which approximates $7.1 million as of March 31, 2011.  Moreover, the ultimate disposition of such assets may not occur for an extended period of time or at prices we seek, which would further harm our liquidity; |
|--------|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

|   | · | As a commercial real estate mortgage lender, we are subject to a variety of external forces that could harm our operations and results, including, without limitation, fluctuations in interest rates, fluctuations in economic conditions (which are exacerbated by our limited geographic diversity), environmental risks, unforeseen statutory and regulatory changes, the cost of and ability to obtain insurance, risks related to developing and leasing of properties and the effect that regulators or bankruptcy courts could have on our operations and rights as a secured commercial real estate mortgage lender; and |
|--------|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | Our commercial real estate mortgage loans, which are not guaranteed by any government agency, are risky and are not sold on any well established secondary market, and the underwriting standards that we previously utilized may not be sufficient to protect stockholders from our borrowers’ loan defaults or to ensure that sufficient collateral, including collateral pledged by guarantors, will exist to protect our stockholders from any such defaults in the context of the continued market stress currently applicable in the real estate sector. |
|--------|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

----

----

|                                                                               |   | As of and for |     |   |                                             |   |     |   |   |
|------------------------------------------------------------------------------------|--------|------------------------------|----------|--------|--------------------------------------------------|--------|----------|--------|--------|
|                                                                               |   | the Year Ended     |     |   | As of and for the Three |   |
|                                                                               |   | December 31,            |     |   | Months Ended March 31,            |   |
|                                                                               |   | 2010                         |     |   | 2010                                             |   |     | 2011   |   |
| Summary balance sheet items                                                        |   |                         |     |   |                                             |   |     |   |   |
| Cash and cash equivalents                                                          |   | $                            | 831      |   |                                             | $      | 3,852    |   |   | $ | 759 |   |
| Mortgage loan principal outstanding (2)                                            |   | $                            | 417,340  |   |                                             | $      | 519,539  |   |   | $ | 344,579 |   |
| Allowance for credit loss / valuation allowance                                    |   | $                            | (294,140 | )      |                                             | $      | (321,968 | )      |   | $ | (230,286 | ) |
| Mortgage loans held for sale, net of valuation allowance(2)                        |   | $                            | 123,200  |   |                                             | $      | 197,571  |   |   | $ | 114,293 |   |
| Real estate held for development, net                                              |   | $                            | 57,642   |   |                                             | $      | 108,173  |   |   | $ | 57,076 |   |
| Real estate held for sale, net                                                     |   | $                            | 31,830   |   |                                             | $      | 12,157   |   |   | $ | 39,761 |   |
| Total assets                                                                       |   | $                            | 229,935  |   |                                             | $      | 341,786  |   |   | $ | 227,394 |   |
| Notes Payable                                                                      |   | $                            | 16,458   |   |                                             | $      | 13,429   |   |   | $ | 17,782 |   |
| Total liabilities                                                                  |   | $                            | 28,572   |   |                                             | $      | 22,770   |   |   | $ | 31,436 |   |
| Total stockholders' equity                                                         |   | $                            | 201,363  |   |                                             | $      | 319,016  |   |   | $ | 195,958 |   |
|                                                                               |   |                         |     |   |                                             |   |     |   |   |   |   |   |
| Summary income statement                                                           |   |                         |     |   |                                             |   |     |   |   |   |   |   |
| Mortgage loan income                                                               |   | $                            | 1,454    |   |                                             | $      | 522      |   |   | $ | 353 |   |
| Total revenue                                                                      |   | $                            | 3,756    |   |                                             | $      | 1,008    |   |   | $ | 1,024 |   |
| Operating expenses                                                                 |   | $                            | 24,415   |   |                                             | $      | 3,860    |   |   | $ | 6,429 |   |
| Provision for credit losses                                                        |   | $                            | 47,454   |   |                                             | $      | -        |   |   | $ | - |   |
| Impairment of real estate owned                                                    |   | $                            | 46,856   |   |                                             | $      | -        |   |   | $ | - |   |
| Total costs and expenses                                                           |   | $                            | 120,796  |   |                                             | $      | 3,860    |   |   | $ | 6,429 |   |
| Net earnings (loss)                                                                |   | $                            | (117,040 | )      |                                             | $      | (2,852   | )      |   | $ | (5,405 | ) |
|                                                                               |   |                         |     |   |                                             |   |     |   |   |   |   |   |
| Earnings/Distributions per share data                                              |   |                         |     |   |                                             |   |     |   |   |   |   |   |
| Net loss per share                                                                 |   | $                            | (7.05    | )      |                                             | $      | (0.18    | )      |   | $ | (0.32 | ) |
| Net distributions per weighted average common share                                |   | $                            | -        |   |                                             | $      | -        |   |   | $ | - |   |
|                                                                               |   |                         |     |   |                                             |   |     |   |   |   |   |   |
| Loan related items                                                                 |   |                         |     |   |                                             |   |     |   |   |   |   |   |
| Note balances originated                                                           |   | $                            | 3,537    |   |                                             | $      | -        |   |   | $ | 202,500 |   |
| Number of notes originated                                                         |   |                         | 4        |   |                                             |   | -        |   |   |   | 1 |   |
| Average note balance originated                                                    |   | $                            | 884      |   |                                             |   | N/A      |   |   | $ | 202,500 |   |
| Number of loans outstanding                                                        |   |                         | 38       |   |                                             |   | 47       |   |   |   | 35 |   |
| Average loan carrying value                                                        |   | $                            | 3,242    |   |                                             | $      | 4,204    |   |   | $ | 3,266 |   |
| % of portfolio principal – fixed interest rate                               |   |                         | 54.0     | %      |                                             |   | 52.9     | %      |   |   | 55.8 | % |
| % of portfolio principal – variable interest rate                            |   |                         | 46.0     | %      |                                             |   | 47.1     | %      |   |   | 44.2 | % |
| Weighted average interest rate – all loans                                   |   |                         | 11.16    | %      |                                             |   | 11.32    | %      |   |   | 11.13 | % |
| Principal balance % by state:                                                      |   |                         |     |   |                                             |   |     |   |   |   |   |   |
| Arizona                                                                            |   |                         | 67.7     | %      |                                             |   | 58.5     | %      |   |   | 68.8 | % |
| California                                                                         |   |                         | 22.4     | %      |                                             |   | 32.1     | %      |   |   | 22.4 | % |
| Texas                                                                              |   |                         | 0.0      | %      |                                             |   | 0.0      | %      |   |   | 0.0 | % |
| Idaho                                                                              |   |                         | 1.3      | %      |                                             |   | 3.4      | %      |   |   | 1.4 | % |
| Other                                                                              |   |                         | 8.6      | %      |                                             |   | 6.0      | %      |   |   | 7.4 | % |
| Total                                                                              |   |                         | 100.0    | %      |                                             |   | 100.0    | %      |   |   | 100.0 | % |
|                                                                               |   |                         |     |   |                                             |   |     |   |   |   |   |   |
| Credit Quality                                                                     |   |                         |     |   |                                             |   |     |   |   |   |   |   |
| Extension fees included in mortgage loan principal                                 |   | $                            | 14,797   |   |                                             | $      | 18,225   |   |   | $ | 13,108 |   |
| Interest payments over 30 days delinquent                                          |   | $                            | 4,999    |   |                                             | $      | 7,559    |   |   | $ | 4,803 |   |
| Principal balance of loans past scheduled maturity                                 |   | $                            | 280,322  |   |                                             | $      | 323,933  |   |   | $ | 209,992 |   |
| Carrying Value of loans in non accrual status                                      |   | $                            | 113,493  |   |                                             | $      | 187,794  |   |   | $ | 105,757 |   |
| Allowance for credit loss / valuation allowance                                    |   | $                            | (294,140 | )      |                                             | $      | (321,968 | )      |   | $ | (230,286 | ) |
| Allowance for credit loss / valuation allowance as % of loan principal outstanding |   |                         | 70.5     | %      |                                             |   | 62.0     | %      |   |   | 66.8 | % |
| Charge-offs                                                                        |   | $                            | 83,742   |   |                                             | $      | 8,460    |   |   | $ | 63,854 |   |

----

|                                           |   | Years Ending December 31, |     |   | March 31, |   |
|------------------------------------------------|--------|------------------------------------------|----------|--------|----------------|--------|
|                                           |   | 2009                                     |     |   | 2010           |   |   | 2011 |   |
|                                      |   | (in thousands)                           |     |   |           |   |   |   |   |
| Average Balance Sheets*                        |   |                                     |     |   |           |   |   |   |   |   |   |   |
| Cash and cash equivalents                      |   | $                                        | 7,719    |   |           | $      | 2,753 |   |   | $ | 783 |   |
| Mortgage loan principal outstanding            |   |                                     | 584,551  |   |           |   | 497,870 |   |   |   | 368,833 |   |
| Allowance for credit loss/ Valuation allowance |   |                                     | (306,712 | )      |           |   | (326,187 | ) |   |   | (251,571 | ) |
| Mortgage loans, net                            |   |                                     | 277,840  |   |           |   | 171,682 |   |   |   | 117,262 |   |
| Real estate owned, net                         |   |                                     | 79,292   |   |           |   | 105,754 |   |   |   | 94,382 |   |
| Other assets                                   |   |                                     | 18,884   |   |           |   | 17,406 |   |   |   | 15,814 |   |
| Total assets                                   |   | $                                        | 383,735  |   |           | $      | 297,596 |   |   | $ | 228,241 |   |
|                                           |   |                                     |     |   |           |   |   |   |   |   |   |   |
| Total liabilities                              |   |                                     | 9,517    |   |           |   | 23,861 |   |   |   | 30,481 |   |
| Total stockholders' equity                     |   |                                     | 374,218  |   |           |   | 273,735 |   |   |   | 197,760 |   |
| Total liabilities and stockholders' equity     |   | $                                        | 383,735  |   |           | $      | 297,596 |   |   | $ | 228,241 |   |

|                                                    |   | Years Ending December 31, |    |   | March 31, |   |
|---------------------------------------------------------|--------|---------------------------|---------|--------|-----------|--------|
|                                                    |   | 2009                      |    |   | 2010      |   |   | 2011 |   |
| Analysis of Mortgage Loan Income by Loan Classification |   |                      |    |   |      |   |   |   |   |
| Pre-entitled Land:                                      |   |                      |    |   |      |   |   |   |   |
| Held for Investment                                     |   | $                         | 60      |   |      | $      | - |   |   | $ | - |   |
| Processing Entitlements                                 |   |                      | 6,977   |   |      |   | 86 |   |   |   | 10 |   |
| Entitled Land:                                          |   |                      |    |   |      |   |   |   |   |   |   |   |
| Held for Investment                                     |   |                      | 2,385   |   |      |   | 173 |   |   |   | 42 |   |
| Infrastructure under Construction                       |   |                      | 2,163   |   |      |   | 326 |   |   |   | 12 |   |
| Improved and Held for vertical Construction             |   |                      | 1,384   |   |      |   | - |   |   |   | - |   |
| Construction and Existing Structures:                   |   |                      |    |   |      |   |   |   |   |   |   |   |
| New Structure - Construction in process                 |   |                      | 1,058   |   |      |   | 501 |   |   |   | 102 |   |
| Existing Structure Held for Investment                  |   |                      | 1,201   |   |      |   | 38 |   |   |   | 37 |   |
| Existing Structure- Improvements                        |   |                      | 6,111   |   |      |   | 330 |   |   |   | 150 |   |
| Total Mortgage Loan Income                              |   | $                         | 21,339  |   |      | $      | 1,454 |   |   | $ | 353 |   |
|                                                    |   |                      |    |   |      |   |   |   |   |   |   |   |
|                                                    |   | Years Ending December 31, |    |   | March 31, |   |
|                                                    |   |                      | 2009    |   |      |   | 2010 |   |   |   | 2011 |   |
| Mortgage Loan Balances by Loan Classification**         |   |                      |    |   |      |   |   |   |   |   |   |   |
| Pre-entitled Land:                                      |   |                      |    |   |      |   |   |   |   |   |   |   |
| Held for Investment                                     |   | $                         | 13,834  |   |      | $      | 6,100 |   |   | $ | 6,100 |   |
| Processing Entitlements                                 |   |                      | 185,608 |   |      |   | 139,452 |   |   |   | 112,546 |   |
| Entitled Land:                                          |   |                      |    |   |      |   |   |   |   |   |   |   |
| Held for Investment                                     |   |                      | 101,942 |   |      |   | 73,462 |   |   |   | 34,232 |   |
| Infrastructure under Construction                       |   |                      | 69,839  |   |      |   | 55,532 |   |   |   | 55,714 |   |
| Improved and Held for vertical Construction             |   |                      | 47,227  |   |      |   | 26,096 |   |   |   | 26,117 |   |
| Construction and Existing Structures:                   |   |                      |    |   |      |   |   |   |   |   |   |   |
| New Structure - Construction in process                 |   |                      | 46,325  |   |      |   | 46,808 |   |   |   | 45,672 |   |
| Existing Structure Held for Investment                  |   |                      | 23,640  |   |      |   | 12,775 |   |   |   | 8,861 |   |
| Existing Structure- Improvements                        |   |                      | 56,033  |   |      |   | 57,115 |   |   |   | 55,337 |   |
| Total Mortgage Loan Balances                            |   | $                         | 544,448 |   |      | $      | 417,340 |   |   | $ | 344,579 |   |

----

|                                                                                                                     |   | Years Ending December 31, |    |   | March 31, |   |
|--------------------------------------------------------------------------------------------------------------------------|--------|---------------------------|---------|--------|-----------|--------|
|                                                                                                                     |   | 2009                      |    |   | 2010      |   |   | 2011 |   |
| Average Mortgage Loan Balances by Loan Classification***                                                                 |   |                      |    |   |      |   |   |   |   |
| Pre-entitled Land:                                                                                                       |   |                      |    |   |      |   |   |   |   |
| Held for Investment                                                                                                      |   | $                         | 12,478  |   |      | $      | 12,773 |   |   | $ | 6,100 |   |
| Processing Entitlements                                                                                                  |   |                      | 193,261 |   |      |   | 175,364 |   |   |   | 125,998 |   |
| Entitled Land:                                                                                                           |   |                      |    |   |      |   |   |   |   |   |   |   |
| Held for Investment                                                                                                      |   |                      | 116,521 |   |      |   | 86,465 |   |   |   | 53,847 |   |
| Infrastructure under Construction                                                                                        |   |                      | 66,399  |   |      |   | 64,437 |   |   |   | 55,623 |   |
| Improved and Held for vertical Construction                                                                              |   |                      | 47,909  |   |      |   | 40,336 |   |   |   | 26,107 |   |
| Construction and Existing Structures:                                                                                    |   |                      |    |   |      |   |   |   |   |   |   |   |
| New Structure - Construction in process                                                                                  |   |                      | 40,329  |   |      |   | 46,496 |   |   |   | 46,240 |   |
| Existing Structure Held for Investment                                                                                   |   |                      | 26,394  |   |      |   | 14,613 |   |   |   | 10,818 |   |
| Existing Structure- Improvements                                                                                         |   |                      | 81,260  |   |      |   | 57,384 |   |   |   | 56,226 |   |
| Total Average Mortgage Loan Balances                                                                                     |   | $                         | 584,551 |   |      | $      | 497,868 |   |   | $ | 380,959 |   |
|                                                                                                                     |   |                      |    |   |      |   |   |   |   |   |   |   |
| *** Amounts were computed using the quarterly average balances during each of the fiscal period presented                |   |                      |    |   |      |
|                                                                                                                     |   | Years Ending December 31, |    |   | March 31, |   |
|                                                                                                                     |   |                      | 2009    |   |      |   | 2010 |   |   |   | 2011 |   |
| Average Interest Rate by Loan Classification****                                                                         |   |                      |    |   |      |   |   |   |   |   |   |   |
| Pre-entitled Land:                                                                                                       |   |                      |    |   |      |   |   |   |   |   |   |   |
| Held for Investment                                                                                                      |   |                      | 10.8    | %      |      |   | 9.5 | % |   |   | 9.5 | % |
| Processing Entitlements                                                                                                  |   |                      | 9.6     | %      |      |   | 9.4 | % |   |   | 9.4 | % |
| Entitled Land:                                                                                                           |   |                      |    |   |      |   |   |   |   |   |   |   |
| Held for Investment                                                                                                      |   |                      | 12.4    | %      |      |   | 12.6 | % |   |   | 12.6 | % |
| Infrastructure under Construction                                                                                        |   |                      | 11.0    | %      |      |   | 10.6 | % |   |   | 10.6 | % |
| Improved and Held for vertical Construction                                                                              |   |                      | 12.1    | %      |      |   | 12.3 | % |   |   | 12.3 | % |
| Construction and Existing Structures:                                                                                    |   |                      |    |   |      |   |   |   |   |   |   |   |
| New Structure - Construction in process                                                                                  |   |                      | 11.5    | %      |      |   | 10.4 | % |   |   | 10.4 | % |
| Existing Structure Held for Investment                                                                                   |   |                      | 12.0    | %      |      |   | 12.1 | % |   |   | 12.1 | % |
| Existing Structure- Improvements                                                                                         |   |                      | 12.4    | %      |      |   | 12.5 | % |   |   | 12.5 | % |
| Total Overall Average Interest Rate                                                                                      |   |                      | 11.5    | %      |      |   | 11.4 | % |   |   | 11.4 | % |
|                                                                                                                     |   |                      |    |   |      |
| ****Average Interest Rate by Loan Classification were computed by taking an average balance over the trailing 5 quarters |
|                                                                                                                     |   | Years Ending December 31, |    |   | March 31, |   |
| Average Yield*****                                                                                                       |   |                      | 2009    |   |      |   | 2010 |   |   |   | 2011 |   |
| Pre-entitled Land:                                                                                                       |   |                      |    |   |      |   |   |   |   |   |   |   |
| Held for Investment                                                                                                      |   |                      | 0.5     | %      |      |   | 0.0 | % |   |   | 0.0 | % |
| Processing Entitlements                                                                                                  |   |                      | 3.6     | %      |      |   | 0.0 | % |   |   | 0.0 | % |
| Entitled Land:                                                                                                           |   |                      |    |   |      |   |   |   |   |   |   |   |
| Held for Investment                                                                                                      |   |                      | 1.9     | %      |      |   | 0.2 | % |   |   | 0.1 | % |
| Infrastructure under Construction                                                                                        |   |                      | 3.6     | %      |      |   | 0.5 | % |   |   | 0.0 | % |
| Improved and Held for vertical Construction                                                                              |   |                      | 2.9     | %      |      |   | 0.0 | % |   |   | 0.0 | % |
| Construction and Existing Structures:                                                                                    |   |                      |    |   |      |   |   |   |   |   |   |   |
| New Structure - Construction in process                                                                                  |   |                      | 2.7     | %      |      |   | 1.1 | % |   |   | 0.2 | % |
| Existing Structure Held for Investment                                                                                   |   |                      | 4.6     | %      |      |   | 0.3 | % |   |   | 0.3 | % |
| Existing Structure- Improvements                                                                                         |   |                      | 8.9     | %      |      |   | 0.6 | % |   |   | 0.3 | % |
| Acutal before rounding fix Overall Average Yield                                                                         |   |                      | 3.7     | %      |      |   | 0.3 | % |   |   | 0.1 | % |
| Overall Average Yield                                                                                                    |   |                      | 3.7     | %      |      |   | 0.3 | % |   |   | 0.1 | % |
| ***** Average Yield is computed using Mortgage Loan Income by Loan Classification as a percent of Average                |   |
| Mortgage Loan Balances by Loan Classification                                                                            |   |                      |    |   |      |   |   |   |   |   |   |   |
| Note: Overall Average Yields have decreased due to loans being placed in non-accrual status                         |   |
|                                                                                                                     |   |                      |    |   |      |   |   |   |   |   |   |   |
| Return on Equity and Assets Ratio                                                                                        |   |                      |    |   |      |   |   |   |   |   |   |   |
| Return on assets                                                                                                         |   |                      | (19.4   | )%     |      |   | (22.0 | )% |   |   | (2.4 | )% |
| Return on equity                                                                                                         |   |                      | (19.9   | )%     |      |   | (24.0 | )% |   |   | (2.7 | )% |
| Dividend payout ratio                                                                                                    |   |                      | (15.7   | )%     |      |   | 0.0 | % |   |   | 0.0 | % |
| Equity to assets ratio                                                                                                   |   |                      | 97.5    | %      |      |   | 92.0 | % |   |   | 86.6 | % |

----

| (in Thousands)                                                                            |   | As of and for the Year Ended December 31, |   |   | March 31, |   |
|-------------------------------------------------------------------------------------------|--------|-------------------------------------------|--------|--------|-----------|--------|
|                                                                                      |   | 2007                                      |   |   | 2008      |   |   | 2009 |   |   | 2010 |   |   | 2011 |   |
| Allocation of Allowance for Credit Loss / Valuation Allowance by Loan Classification      |   |                                      |   |   |      |   |   |   |   |   |   |   |   |   |   |
| Pre-entitled Land:                                                                        |   |                                      |   |   |      |   |   |   |   |   |   |   |   |   |   |
| Held for Investment                                                                       |   | $                                         | -      |   |      | $      | (3,242 | ) |   | $ | (9,623 | ) |   | $ | (4,695 | ) |   | $ | (4,719 | ) |
| Processing Entitlements                                                                   |   |                                      | (1,900 | )      |      |   | (122,266 | ) |   |   | (134,742 | ) |   |   | (123,090 | ) |   |   | (98,867 | ) |
| Entitled Land:                                                                            |   |                                      |   |   |      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Held for Investment                                                                       |   |                                      | -      |   |      |   | (79,279 | ) |   |   | (80,750 | ) |   |   | (67,038 | ) |   |   | (29,941 | ) |
| Infrastructure under Construction                                                         |   |                                      | -      |   |      |   | (24,863 | ) |   |   | (39,441 | ) |   |   | (43,920 | ) |   |   | (44,262 | ) |
| Improved and Held for Vertical Construction                                               |   |                                      | -      |   |      |   | (38,522 | ) |   |   | (28,696 | ) |   |   | (20,547 | ) |   |   | (20,646 | ) |
| Construction & Existing Structures:                                                   |   |                                      |   |   |      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| New Structure - Construction in-process                                                   |   |                                      | -      |   |      |   | (28,547 | ) |   |   | (30,106 | ) |   |   | (30,293 | ) |   |   | (30,380 | ) |
| Existing Structure Held for Investment                                                    |   |                                      | -      |   |      |   | (2,954 | ) |   |   | (7,070 | ) |   |   | (4,558 | ) |   |   | (1,472 | ) |
| Existing Structure - Improvements                                                         |   |                                      | -      |   |      |   | (637 | ) |   |   | - |   |   |   | - |   |   |   | - |   |
| Allowance for Loan Loss/ Valuation Allowance                                              |   | $                                         | (1,900 | )      |      | $      | (300,310 | ) |   | $ | (330,428 | ) |   | $ | (294,141 | ) |   | $ | (230,286 | ) |
|                                                                                      |   |                                      |   |   |      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Rollforward of Allowance for Credit Loss / Valuation Allowance by Loan Classifications    |   |                                      |   |   |      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                                                                      |   |                                      |   |   |      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Balance at the beginning of period                                                        |   | $                                         | -      |   |      | $      | (1,900 | ) |   | $ | (300,310 | ) |   | $ | (330,428 | ) |   | $ | (294,140 | ) |
|                                                                                      |   |                                      |   |   |      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Additions to Allowance for Credit Loss / Valuation Allowance                              |   |                                      |   |   |      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Pre-entitled Land:                                                                        |   |                                      |   |   |      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Held for Investment                                                                       |   | $                                         | -      |   |      | $      | (3,242 | ) |   | $ | (6,381 | ) |   | $ | (2,096 | ) |   | $ | - |   |
| Processing Entitlements                                                                   |   |                                      | (1,900 | )      |      |   | (120,366 | ) |   |   | (24,851 | ) |   |   | (24,647 | ) |   |   | - |   |
| Entitled Land:                                                                            |   |                                      |   |   |      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Held for Investment                                                                       |   |                                      | -      |   |      |   | (79,279 | ) |   |   | (9,851 | ) |   |   | (7,279 | ) |   |   | - |   |
| Infrastructure under Construction                                                         |   |                                      | -      |   |      |   | (24,863 | ) |   |   | (11,990 | ) |   |   | (3,185 | ) |   |   | - |   |
| Improved and Held for Vertical Construction                                               |   |                                      | -      |   |      |   | (38,522 | ) |   |   | 801 |   |   |   | (629 | ) |   |   | - |   |
| Construction & Existing Structures:                                                   |   |                                      |   |   |      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| New Structure - Construction in-process                                                   |   |                                      | -      |   |      |   | (26,137 | ) |   |   | (3,218 | ) |   |   | (7,736 | ) |   |   | - |   |
| Existing Structure Held for Investment                                                    |   |                                      | -      |   |      |   | (2,954 | ) |   |   | (4,116 | ) |   |   | (1,831 | ) |   |   | - |   |
| Existing Structure - Improvements                                                         |   |                                      | -      |   |      |   | (637 | ) |   |   | (19,693 | ) |   |   | (51 | ) |   |   | - |   |
| Total provision for credit losses                                                         |   | $                                         | (1,900 | )      |      | $      | (296,000 | ) |   | $ | (79,299 | ) |   | $ | (47,454 | ) |   | $ | - |   |
|                                                                                      |   |                                      |   |   |      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Charge-Offs:                                                                              |   |                                      |   |   |      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Pre-entitled Land:                                                                        |   |                                      |   |   |      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Held for Investment                                                                       |   | $                                         | -      |   |      | $      | - |   |   | $ | - |   |   | $ | 7,024 |   |   | $ | (24 | ) |
| Processing Entitlements                                                                   |   |                                      | -      |   |      |   | - |   |   |   | 12,375 |   |   |   | 36,300 |   |   |   | 24,223 |   |
| Entitled Land:                                                                            |   |                                      |   |   |      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Held for Investment                                                                       |   |                                      | -      |   |      |   | - |   |   |   | 8,380 |   |   |   | 20,992 |   |   |   | 37,095 |   |
| Infrastructure under Construction                                                         |   |                                      | -      |   |      |   | - |   |   |   | (2,588 | ) |   |   | (1,295 | ) |   |   | (342 | ) |
| Improved and Held for Vertical Construction                                               |   |                                      | -      |   |      |   | - |   |   |   | 9,025 |   |   |   | 8,778 |   |   |   | (99 | ) |
| Construction & Existing Structures:                                                   |   |                                      |   |   |      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| New Structure - Construction in-process                                                   |   |                                      | -      |   |      |   | - |   |   |   | 1,659 |   |   |   | 7,548 |   |   |   | (86 | ) |
| Existing Structure Held for Investment                                                    |   |                                      | -      |   |      |   | - |   |   |   | - |   |   |   | 4,344 |   |   |   | 3,087 |   |
| Existing Structure - Improvements                                                         |   |                                      | -      |   |      |   | - |   |   |   | 20,330 |   |   |   | 51 |   |   |   | - |   |
| Total charge-offs                                                                         |   | $                                         | -      |   |      | $      | - |   |   | $ | 49,181 |   |   | $ | 83,742 |   |   | $ | 63,854 |   |
| Recoveries - None                                                                         |   |                                      |   |   |      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Total Recoveries                                                                          |   | $                                         | -      |   |      | $      | - |   |   | $ | - |   |   | $ | - |   |   | $ | - |   |
|                                                                                      |   |                                      |   |   |      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Net Charge-offs                                                                           |   | $                                         | -      |   |      | $      | - |   |   | $ | 49,181 |   |   | $ | 83,742 |   |   | $ | 63,854 |   |
|                                                                                      |   |                                      |   |   |      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Net Change in Allowance for Credit Loss / Valuation Allowance                             |   | $                                         | (1,900 | )      |      | $      | (296,000 | ) |   | $ | (30,118 | ) |   | $ | 36,288 |   |   | $ | 63,854 |   |
| Other changes to Allowance for Credit Loss / Valuation Allowance                          |   |                                      | -      |   |      |   | (2,410 | ) |   |   | - |   |   |   | - |   |   |   | - |   |
| Balance at end of period                                                                  |   | $                                         | (1,900 | )      |      | $      | (300,310 | ) |   | $ | (330,428 | ) |   | $ | (294,140 | ) |   | $ | (230,286 | ) |
|                                                                                      |   |                                      |   |   |      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Ratio of net charge-offs during the period to average loans outstanding during the period |   |                                      | 0.0    | %      |      |   | 0.0 | % |   |   | 8.4 | % |   |   | 16.8 | % |   |   | 16.8 | % |

----

|                                                      |   | As of and for the Years ended December 31, |    |   | March 31, |   |
|-----------------------------------------------------------|--------|--------------------------------------------|---------|--------|-----------|--------|
|                                                      |   | 2007                                       |    |   | 2008      |   |   | 2009 |   |   | 2010 |   |   | 2011 |   |
| Amount shown in Thousands                                 |   |                                       |    |   |      |   |   |   |   |   |   |   |   |   |   |
| Principal Balances Outstanding by Loan Classification     |   |                                       |    |   |      |   |   |   |   |   |   |   |   |   |   |
| Pre-entitled Land:                                        |   |                                       |    |   |      |   |   |   |   |   |   |   |   |   |   |
| Held for Investment                                       |   | $                                          | -       |   |      | $      | 7,178 |   |   | $ | 13,834 |   |   | $ | 6,100 |   |   | $ | 6,100 |   |
| Processing Entitlements                                   |   |                                       | 203,166 |   |      |   | 200,902 |   |   |   | 185,608 |   |   |   | 139,452 |   |   |   | 112,546 |   |
| Entitled Land:                                            |   |                                       |    |   |      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Held for Investment                                       |   |                                       | 135,060 |   |      |   | 114,307 |   |   |   | 101,942 |   |   |   | 73,462 |   |   |   | 34,232 |   |
| Infrastructure under Construction                         |   |                                       | 60,037  |   |      |   | 57,908 |   |   |   | 69,839 |   |   |   | 55,532 |   |   |   | 55,714 |   |
| Improved and Held for vertical Construction               |   |                                       | 14,800  |   |      |   | 54,486 |   |   |   | 47,227 |   |   |   | 26,096 |   |   |   | 26,117 |   |
| Construction and Existing Structures:                     |   |                                       |    |   |      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| New Structure - Construction in process                   |   |                                       | 70,864  |   |      |   | 43,814 |   |   |   | 46,325 |   |   |   | 46,808 |   |   |   | 45,672 |   |
| Existing Structure Held for Investment                    |   |                                       | 26,870  |   |      |   | 37,482 |   |   |   | 23,640 |   |   |   | 12,775 |   |   |   | 8,861 |   |
| Existing Structure- Improvements                          |   |                                       | -       |   |      |   | 97,777 |   |   |   | 56,033 |   |   |   | 57,115 |   |   |   | 55,337 |   |
| Total Loan Principal                                      |   | $                                          | 510,797 |   |      | $      | 613,854 |   |   | $ | 544,448 |   |   | $ | 417,340 |   |   | $ | 344,579 |   |
|                                                      |   |                                       |    |   |      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Scheduled Maturities                                      |   |                                       |    |   |      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Scheduled Maturities - One year or less                   |   |                                       |    |   |      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Pre-entitled Land:                                        |   |                                       |    |   |      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Held for Investment                                       |   | $                                          | -       |   |      | $      | 7,178 |   |   | $ | 13,834 |   |   | $ | 6,100 |   |   | $ | 6,100 |   |
| Processing Entitlements                                   |   |                                       | 203,166 |   |      |   | 195,168 |   |   |   | 185,609 |   |   |   | 139,451 |   |   |   | 112,545 |   |
| Entitled Land:                                            |   |                                       |    |   |      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Held for Investment                                       |   |                                       | 135,060 |   |      |   | 89,786 |   |   |   | 101,942 |   |   |   | 73,462 |   |   |   | 34,232 |   |
| Infrastructure under Construction                         |   |                                       | 60,037  |   |      |   | 57,908 |   |   |   | 27,953 |   |   |   | 55,532 |   |   |   | 55,714 |   |
| Improved and Held for vertical Construction               |   |                                       | 14,800  |   |      |   | 13,904 |   |   |   | 47,227 |   |   |   | 26,096 |   |   |   | 26,117 |   |
| Construction and Existing Structures:                     |   |                                       |    |   |      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| New Structure - Construction in process                   |   |                                       | 70,864  |   |      |   | 43,814 |   |   |   | 12,653 |   |   |   | 5,331 |   |   |   | 3,956 |   |
| Existing Structure Held for Investment                    |   |                                       | 26,870  |   |      |   | 37,482 |   |   |   | 23,641 |   |   |   | 10,391 |   |   |   | 8,225 |   |
| Existing Structure- Improvements                          |   |                                       | -       |   |      |   | 97,777 |   |   |   | - |   |   |   | 3,932 |   |   |   | 3,681 |   |
| Total Scheduled Maturities - One year or less             |   |                                       | 510,797 |   |      |   | 543,017 |   |   |   | 412,859 |   |   |   | 320,295 |   |   |   | 250,570 |   |
| Scheduled Maturities - One to five years                  |   |                                       |    |   |      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Pre-entitled Land:                                        |   |                                       |    |   |      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Held for Investment                                       |   |                                       | -       |   |      |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |
| Processing Entitlements                                   |   |                                       | -       |   |      |   | 5,735 |   |   |   | - |   |   |   | - |   |   |   | - |   |
| Entitled Land:                                            |   |                                       |    |   |      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Held for Investment                                       |   |                                       | -       |   |      |   | 24,520 |   |   |   | - |   |   |   | - |   |   |   | - |   |
| Infrastructure under Construction                         |   |                                       | -       |   |      |   | - |   |   |   | 41,886 |   |   |   | - |   |   |   | - |   |
| Improved and Held for vertical Construction               |   |                                       | -       |   |      |   | 40,582 |   |   |   | - |   |   |   | - |   |   |   | - |   |
| Construction and Existing Structures:                     |   |                                       |    |   |      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| New Structure - Construction in process                   |   |                                       | -       |   |      |   | - |   |   |   | 33,670 |   |   |   | 41,478 |   |   |   | 41,716 |   |
| Existing Structure Held for Investment                    |   |                                       | -       |   |      |   | - |   |   |   | - |   |   |   | 2,384 |   |   |   | 636 |   |
| Existing Structure- Improvements                          |   |                                       | -       |   |      |   | - |   |   |   | 56,033 |   |   |   | 53,183 |   |   |   | 51,657 |   |
| Total Scheduled Maturities - One to five years            |   |                                       | -       |   |      |   | 70,837 |   |   |   | 131,589 |   |   |   | 97,045 |   |   |   | 94,009 |   |
| Total Loan Principal                                      |   | $                                          | 510,797 |   |      | $      | 613,854 |   |   | $ | 544,448 |   |   | $ | 417,340 |   |   | $ | 344,579 |   |
|                                                      |   |                                       |    |   |      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Scheduled Maturities - One to Five Years by Interest Type |   | As of and for the Years ended December 31, |    |   | March 31, |   |
| Fixed Interest Rates                                      |   |                                       | 2007    |   |      |   | 2008 |   |   |   | 2009 |   |   |   | 2010 |   |   |   | 2011 |   |
| Pre-entitled Land:                                        |   |                                       |    |   |      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Held for Investment                                       |   | $                                          | -       |   |      | $      | - |   |   | $ | - |   |   | $ | - |   |   | $ | - |   |
| Processing Entitlements                                   |   |                                       | -       |   |      |   | 1,929 |   |   |   | - |   |   |   | - |   |   |   | - |   |
| Entitled Land:                                            |   |                                       |    |   |      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Held for Investment                                       |   |                                       | -       |   |      |   | 3,500 |   |   |   | - |   |   |   | - |   |   |   | - |   |
| Infrastructure under Construction                         |   |                                       | -       |   |      |   | - |   |   |   | 41,884 |   |   |   | - |   |   |   | - |   |
| Improved and Held for vertical Construction               |   |                                       | -       |   |      |   | 10,461 |   |   |   | - |   |   |   | - |   |   |   | - |   |
| Construction and Existing Structures:                     |   |                                       |    |   |      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| New Structure - Construction in process                   |   |                                       | -       |   |      |   | - |   |   |   | 32,054 |   |   |   | 41,478 |   |   |   | 41,716 |   |
| Existing Structure Held for Investment                    |   |                                       | -       |   |      |   | - |   |   |   | - |   |   |   | 2,000 |   |   |   | - |   |
| Existing Structure- Improvements                          |   |                                       | -       |   |      |   | - |   |   |   | 56,033 |   |   |   | 53,183 |   |   |   | 51,657 |   |
| Total Scheduled Maturities - Fixed interest rate          |   |                                       | -       |   |      |   | 15,890 |   |   |   | 129,971 |   |   |   | 96,661 |   |   |   | 93,373 |   |
| Variable Interest Rates                                   |   |                                       |    |   |      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Pre-entitled Land:                                        |   |                                       |    |   |      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Held for Investment                                       |   |                                       | -       |   |      |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |
| Processing Entitlements                                   |   |                                       | -       |   |      |   | 3,807 |   |   |   | - |   |   |   | - |   |   |   | - |   |
| Entitled Land:                                            |   |                                       |    |   |      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Held for Investment                                       |   |                                       | -       |   |      |   | 21,020 |   |   |   | - |   |   |   | - |   |   |   | - |   |
| Infrastructure under Construction                         |   |                                       | -       |   |      |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |
| Improved and Held for vertical Construction               |   |                                       | -       |   |      |   | 30,120 |   |   |   | - |   |   |   | - |   |   |   | - |   |
| Construction and Existing Structures:                     |   |                                       |    |   |      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| New Structure - Construction in process                   |   |                                       | -       |   |      |   | - |   |   |   | 1,618 |   |   |   | - |   |   |   | - |   |
| Existing Structure Held for Investment                    |   |                                       | -       |   |      |   | - |   |   |   | - |   |   |   | 384 |   |   |   | 636 |   |
| Existing Structure- Improvements                          |   |                                       | -       |   |      |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |
| Total Scheduled Maturities - Variable interest rate       |   |                                       | -       |   |      |   | 54,947 |   |   |   | 1,618 |   |   |   | 384 |   |   |   | 636 |   |
| Total Loan Principal due One to Five Years                |   | $                                          | -       |   |      | $      | 70,837 |   |   | $ | 131,589 |   |   | $ | 97,045 |   |   | $ | 94,009 |   |

----

|                                        |   | As of and for the Year Ended December 31, |    |   | March 31, |   |
|---------------------------------------------|--------|-------------------------------------------|---------|--------|-----------|--------|
|                                        |   | 2007                                      |    |   | 2008      |   |   | 2009 |   |   | 2010 |   |   | 2011 |   |
| Performing Loans                            |   |                                      |    |   |      |   |   |   |   |   |   |   |   |   |   |
| Pre-entitled Land:                          |   |                                      |    |   |      |   |   |   |   |   |   |   |   |   |   |
| Held for Investment                         |   | $                                         | -       |   |      | $      | - |   |   | $ | - |   |   | $ | - |   |   | $ | - |   |
| Processing Entitlements                     |   |                                      | 119,175 |   |      |   | 146,460 |   |   |   | - |   |   |   | - |   |   |   | - |   |
| Entitled Land:                              |   |                                      |    |   |      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Held for Investment                         |   |                                      | 135,060 |   |      |   | 37,146 |   |   |   | - |   |   |   | 1,201 |   |   |   | 1,201 |   |
| Infrastructure under Construction           |   |                                      | 44,557  |   |      |   | 40,653 |   |   |   | 7,645 |   |   |   | - |   |   |   | - |   |
| Improved and Held for vertical Construction |   |                                      | 14,800  |   |      |   | 35,102 |   |   |   | - |   |   |   | - |   |   |   | - |   |
| Construction and Existing Structures:       |   |                                      |    |   |      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| New Structure - Construction in process     |   |                                      | 45,087  |   |      |   | 6,694 |   |   |   | 4,805 |   |   |   | 2,395 |   |   |   | 1,019 |   |
| Existing Structure Held for Investment      |   |                                      | 18,620  |   |      |   | 23,393 |   |   |   | - |   |   |   | 2,384 |   |   |   | 2,636 |   |
| Existing Structure- Improvements            |   |                                      | -       |   |      |   | 97,777 |   |   |   | - |   |   |   | 3,932 |   |   |   | 3,681 |   |
| Total Performing Loans                      |   | $                                         | 377,299 |   |      | $      | 387,225 |   |   | $ | 12,450 |   |   | $ | 9,912 |   |   | $ | 8,537 |   |
|                                        |   |                                      |    |   |      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Loans in Default - Non-Accrual              |   |                                      |    |   |      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Pre-entitled Land:                          |   |                                      |    |   |      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Held for Investment                         |   | $                                         | -       |   |      | $      | - |   |   | $ | 13,834 |   |   | $ | 6,100 |   |   | $ | 6,100 |   |
| Processing Entitlements                     |   |                                      | 64,743  |   |      |   | 46,636 |   |   |   | 185,608 |   |   |   | 139,451 |   |   |   | 112,545 |   |
| Entitled Land:                              |   |                                      |    |   |      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Held for Investment                         |   |                                      | -       |   |      |   | 3,300 |   |   |   | 101,942 |   |   |   | 72,261 |   |   |   | 33,031 |   |
| Infrastructure under Construction           |   |                                      | -       |   |      |   | 17,255 |   |   |   | 62,194 |   |   |   | 55,532 |   |   |   | 55,714 |   |
| Improved and Held for vertical Construction |   |                                      | -       |   |      |   | 14,632 |   |   |   | 40,051 |   |   |   | 26,096 |   |   |   | 26,117 |   |
| Construction and Existing Structures:       |   |                                      |    |   |      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| New Structure - Construction in process     |   |                                      | 2,253   |   |      |   | 13,800 |   |   |   | 39,102 |   |   |   | 44,414 |   |   |   | 44,653 |   |
| Existing Structure Held for Investment      |   |                                      | 8,250   |   |      |   | - |   |   |   | 23,640 |   |   |   | 10,391 |   |   |   | 6,225 |   |
| Existing Structure- Improvements            |   |                                      | -       |   |      |   | - |   |   |   | 56,033 |   |   |   | 53,183 |   |   |   | 51,657 |   |
| Total Loans in Default - Non-Accrual        |   | $                                         | 75,246  |   |      | $      | 95,623 |   |   | $ | 522,404 |   |   | $ | 407,428 |   |   | $ | 336,042 |   |
|                                        |   |                                      |    |   |      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Loans in Default - Other                    |   |                                      |    |   |      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Pre-entitled Land:                          |   |                                      |    |   |      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Held for Investment                         |   | $                                         | -       |   |      | $      | 7,178 |   |   | $ | - |   |   | $ | - |   |   | $ | - |   |
| Processing Entitlements                     |   |                                      | 19,247  |   |      |   | 7,806 |   |   |   | - |   |   |   | - |   |   |   | - |   |
| Entitled Land:                              |   |                                      |    |   |      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Held for Investment                         |   |                                      | -       |   |      |   | 73,861 |   |   |   | - |   |   |   | - |   |   |   | - |   |
| Infrastructure under Construction           |   |                                      | 15,480  |   |      |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |
| Improved and Held for vertical Construction |   |                                      | -       |   |      |   | 4,752 |   |   |   | 7,176 |   |   |   | - |   |   |   | - |   |
| Construction and Existing Structures:       |   |                                      |    |   |      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| New Structure - Construction in process     |   |                                      | 23,525  |   |      |   | 23,320 |   |   |   | 2,418 |   |   |   | - |   |   |   | - |   |
| Existing Structure Held for Investment      |   |                                      | -       |   |      |   | 14,089 |   |   |   | - |   |   |   | - |   |   |   | - |   |
| Existing Structure- Improvements            |   |                                      | -       |   |      |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |
| Total Loans in Default - Other              |   |                                      | 58,252  |   |      |   | 131,006 |   |   |   | 9,594 |   |   |   | - |   |   |   | - |   |
| Total Loans in Default                      |   | $                                         | 133,498 |   |      | $      | 226,629 |   |   | $ | 531,998 |   |   | $ | 407,428 |   |   | $ | 336,042 |   |
| Total Loan Principal                        |   | $                                         | 510,797 |   |      | $      | 613,854 |   |   | $ | 544,448 |   |   | $ | 417,340 |   |   | $ | 344,579 |   |
|                                        |   |                                      |    |   |      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Loans in Default by Basis for Default       |   |                                      |    |   |      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Loans past maturity date, or other          |   |                                      |    |   |      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Pre-entitled Land:                          |   |                                      |    |   |      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Held for Investment                         |   | $                                         | -       |   |      | $      | 7,178 |   |   | $ | 13,834 |   |   | $ | 6,100 |   |   | $ | 6,101 |   |
| Processing Entitlements                     |   |                                      | 83,990  |   |      |   | 52,791 |   |   |   | 181,801 |   |   |   | 139,451 |   |   |   | 112,545 |   |
| Entitled Land:                              |   |                                      |    |   |      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Held for Investment                         |   |                                      | -       |   |      |   | 73,714 |   |   |   | 80,922 |   |   |   | 72,261 |   |   |   | 33,031 |   |
| Infrastructure under Construction           |   |                                      | 15,480  |   |      |   | 17,255 |   |   |   | 20,308 |   |   |   | 24,762 |   |   |   | 24,712 |   |
| Improved and Held for vertical Construction |   |                                      | -       |   |      |   | 8,923 |   |   |   | 17,106 |   |   |   | 26,096 |   |   |   | 26,117 |   |
| Construction and Existing Structures:       |   |                                      |    |   |      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| New Structure - Construction in process     |   |                                      | 25,778  |   |      |   | 36,246 |   |   |   | 9,522 |   |   |   | 1,261 |   |   |   | 1,261 |   |
| Existing Structure Held for Investment      |   |                                      | 8,250   |   |      |   | 14,089 |   |   |   | 23,641 |   |   |   | 10,391 |   |   |   | 6,225 |   |
| Existing Structure- Improvements            |   |                                      | -       |   |      |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |
| Total past maturity date                    |   | $                                         | 133,498 |   |      | $      | 210,196 |   |   | $ | 347,134 |   |   | $ | 280,322 |   |   | $ | 209,992 |   |
| Loans past due on interest                  |   |                                      |    |   |      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Pre-entitled Land:                          |   |                                      |    |   |      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Held for Investment                         |   | $                                         | -       |   |      | $      | - |   |   | $ | - |   |   | $ | - |   |   | $ | - |   |
| Processing Entitlements                     |   |                                      | -       |   |      |   | 1,650 |   |   |   | 3,807 |   |   |   | - |   |   |   | - |   |
| Entitled Land:                              |   |                                      |    |   |      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Held for Investment                         |   |                                      | -       |   |      |   | 3,447 |   |   |   | 21,020 |   |   |   | - |   |   |   | - |   |
| Infrastructure under Construction           |   |                                      | -       |   |      |   | - |   |   |   | 41,886 |   |   |   | 30,770 |   |   |   | 31,001 |   |
| Improved and Held for vertical Construction |   |                                      | -       |   |      |   | 10,461 |   |   |   | 30,120 |   |   |   | - |   |   |   | - |   |
| Construction and Existing Structures:       |   |                                      |    |   |      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| New Structure - Construction in process     |   |                                      | -       |   |      |   | 875 |   |   |   | 31,998 |   |   |   | 43,153 |   |   |   | 43,392 |   |
| Existing Structure Held for Investment      |   |                                      | -       |   |      |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |
| Existing Structure- Improvements            |   |                                      | -       |   |      |   | - |   |   |   | 56,033 |   |   |   | 53,183 |   |   |   | 51,657 |   |
| Total past due on interest                  |   |                                      | -       |   |      |   | 16,433 |   |   |   | 184,864 |   |   |   | 127,106 |   |   |   | 126,050 |   |
| Total loans in default by basis of default  |   | $                                         | 133,498 |   |      | $      | 226,629 |   |   | $ | 531,998 |   |   | $ | 407,428 |   |   | $ | 336,042 |   |

----

|                                        |   | December 31,                         |   |         | March 31,                            |   |
|---------------------------------------------|--------|-------------------------------------------|--------|--------------|-------------------------------------------|--------|
|                                        |   | 2010 Compared to 2009      |   |         | 2011 Compared to 2010      |   |
|                                        |   | Increase (Decrease) due to |   |         | Increase (Decrease) due to |   |
|                                        |   | Volume                                    |   |         | Rate                                      |   |   | Net |   |   | Volume |   |   | Rate |   |   | Net |   |
| Pre-entitled Land:                          |   |                                      |   |         |                                      |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Held for Investment                         |   | $                                         | 91     |         |                                      | $      | (151 | ) |   | $ | (60 | ) |   | $ | (751 | ) |   | $ | 751 |   |   | $ | - |   |
| Processing Entitlements                     |   |                                      | (732   | )            |                                      |   | (6,159 | ) |   |   | (6,891 | ) |   |   | (5,606 | ) |   |   | 5,616 |   |   |   | 10 |   |
|                                        |   |                                      | -      |         |                                      |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |
| Entitled Land:                              |   |                                      |   |         |                                      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Held for Investment                         |   |                                      | (2,429 | )            |                                      |   | 217 |   |   |   | (2,212 | ) |   |   | (5,428 | ) |   |   | 5,470 |   |   |   | 42 |   |
| Infrastructure under Construction           |   |                                      | 380    |         |                                      |   | (2,217 | ) |   |   | (1,837 | ) |   |   | (1,509 | ) |   |   | 1,295 |   |   |   | (214 | ) |
| Improved and Held for vertical Construction |   |                                      | (77    | )            |                                      |   | (1,307 | ) |   |   | (1,384 | ) |   |   | (2,603 | ) |   |   | 2,464 |   |   |   | (139 | ) |
|                                        |   |                                      | -      |         |                                      |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |
| Construction and Existing Structures:       |   |                                      |   |    |                                      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| New Structure - Construction in process     |   |                                      | 550    |         |                                      |   | (1,107 | ) |   |   | (557 | ) |   |   | 117 |   |   |   | (172 | ) |   |   | (55 | ) |
| Existing Structure Held for Investment      |   |                                      | (1,028 | )            |                                      |   | (135 | ) |   |   | (1,163 | ) |   |   | (849 | ) |   |   | 886 |   |   |   | 37 |   |
| Existing Structure- Improvements            |   |                                      | (3,128 | )            |                                      |   | (2,653 | ) |   |   | (5,781 | ) |   |   | 24 |   |   |   | 126 |   |   |   | 150 |   |
| Total change in mortgage loan income        |   | $                                         | (6,373 | )            |                                      | $      | (13,512 | ) |   | $ | (19,885 | ) |   | $ | (16,606 | ) |   | $ | 16,436 |   |   | $ | (169 | ) |

----

| Revenues (amounts in thousands) |   |                                             |   |   |   |   |   |     |   |   |     |   |
|------------------------------------------------|--------|--------------------------------------------------|--------|--------|--------|--------|--------|----------|--------|--------|----------|--------|
|                                           |   | Three Months Ended March 31, |   |
| Revenues                                       |   | 2010                                             |   |   | 2011   |   |   | $ Change |   |   | % Change |   |
|                                           |   |                                             |   |   |   |   |   |     |   |   |     |   |
| Mortgage Loan Income                           |   | $                                                | 522    |   |   | $      | 353    |     |   | $      | (169     | )      |   |   | (32.4 | )% |
| Rental Income                                  |   |                                             | 410    |   |   |   | 488    |     |   |   | 78       |   |   |   | 19.0 | % |
| Investment and Other Income                    |   |                                             | 76     |   |   |   | 183    |     |   |   | 107      |   |   |   | 140.8 | % |
| Total Revenue                                  |   | $                                                | 1,008  |   |   | $      | 1,024  |     |   | $      | 16       |   |   |   | 1.6 | % |

----

|                                     |   | Three Months Ended March 31, |   |
|------------------------------------------|--------|--------------------------------------------------|--------|
| Expenses:                                |   | 2010                                             |   |   | 2011 |   |   | $ Change |   |   | % Change |   |
|                                     |   |                                             |   |   |   |   |   |   |   |   |   |   |
| Operating Expenses for Real Estate Owned |   | $                                                | 1,528  |   |   | $ | 1,669 |   |   | $ | 141 |   |   |   | 9.2 | % |
| Professional Fees                        |   |                                             | 1,399  |   |   |   | 1,214 |   |   |   | (185 | ) |   |   | (13.2 | )% |
| Management Fees                          |   |                                             | 64     |   |   |   | - |   |   |   | (64 | ) |   |   | (100.0 | )% |
| Default and Related Expenses             |   |                                             | 206    |   |   |   | 238 |   |   |   | 32 |   |   |   | 15.5 | % |
| General and Administrative Expenses      |   |                                             | -      |   |   |   | 1,614 |   |   |   | 1,614 |   |   |   | N/A |   |
| Loss/(Gain) on Disposal of Real Estate   |   |                                             | -      |   |   |   | (74 | ) |   |   | (74 | ) |   |   | N/A |   |
| Organizational Costs                     |   |                                             | -      |   |   |   | 190 |   |   |   | 190 |   |   |   | N/A |   |
| Offering Costs                           |   |                                             | -      |   |   |   | 347 |   |   |   | 347 |   |   |   | N/A |   |
| Interest Expense                         |   |                                             | 244    |   |   |   | 778 |   |   |   | 534 |   |   |   | 218.9 | % |
| Depreciation and Amortization Expense    |   |                                             | 419    |   |   |   | 453 |   |   |   | 34 |   |   |   | 8.1 | % |
|                                     |   |                                             |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Total Costs and Expenses                 |   | $                                                | 3,860  |   |   | $ | 6,429 |   |   | $ | 2,569 |   |   |   | 66.6 | % |

----

----

|   | · | Fixed Interest Rate:  At March 31, 2011, 55.8% of our portfolio consisted of fixed rate loans, as compared with 54.0% at December 31, 2010. The increase in the percentage of fixed rate loans in the portfolio is attributed to the foreclosure of loans during the three months ended March 31, 2011. The average interest rate on fixed rate loans as of March 31, 2011 and December 31, 2010 was 9.39% and 9.51%, respectively. The increase in weighted average interest in rates between these periods is attributed to the foreclosure of certain lower yielding fixed rate loans. |
|--------|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | Variable Interest Rate:  All variable interest rate loans are indexed to the Prime rate with interest rate floors. At December 31, 2010 and March 31, 2011, the Prime rate was 3.25% per annum, respectively.  As of December 31, 2010 and March 31, 2011, the weighted average contractual interest rates on our variable rate loans (including loans in non-accrual status) was Prime plus 10.07% and Prime plus 9.85%, respectively. At March 31, 2011, 44.2% of our portfolio consisted of variable rate loans, as compared to 46.0% at December 31, 2010. The decrease in the percentage of variable rate loans in the portfolio is primarily attributed to the foreclosure of such loans during the three months ended March 31, 2011. The weighted average interest rate on variable rate loans was 13.32% per annum and 13.10% per annum at March 31, 2011 and December 31, 2010, respectively. The slight decrease in the average variable rate at March 31, 2011 as compared to December 31, 2010 is attributed to the foreclosure of higher variable rate loans.  |
|--------|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

----

| March 31, 2011        |   |
|---------------------------------|--------|
|                            |   |
| Quarter                         |   | Amount |   |   | Percent |   |   | # |   |
| Matured                         |   | $ | 209,992 |   |   |   | 60.9 | % |   |   | 22 |   |
| Q2 2011                         |   |   | 1,201 |   |   |   | 0.3 | % |   |   | 2 |   |
| Q4 2011                         |   |   | 36,358 |   |   |   | 10.6 | % |   |   | 4 |   |
| Q1 2012                         |   |   | 3,019 |   |   |   | 0.9 | % |   |   | 2 |   |
| Q3 2012                         |   |   | 93,373 |   |   |   | 27.1 | % |   |   | 2 |   |
| Q3 2013                         |   |   | 434 |   |   |   | 0.1 | % |   |   | 2 |   |
| Q1 2014                         |   |   | 202 |   |   |   | 0.1 | % |   |   | 1 |   |
| Total                           |   |   | 344,579 |   |   |   | 100.0 | % |   |   | 35 |   |
| Less:  Valuation Allowance |   |   | (230,286 | ) |   |   |   |   |   |   |   |   |
|                            |   |   |   |   |   |   |   |   |   |   |   |   |
| Net Carrying Value              |   | $ | 114,293 |   |   |   |   |   |   |   |   |   |

|                                     |                     | March 31, 2011 |    |
|------------------------------------------|--------------------------|--------------------------|---------|
|                                     |                     | Amount                   |    |   |   |   |   |   |   |
|                                     |                     | (in thousands)      |    |   | % |   |   | # |   |
| Loans Not Modified and Currently Matured |      | $                        | 209,992 |   |   |   | 61 | % |   |   | 22 |   |
| Loans Modified to Extend Maturity        |                     |                     | 92,045  |   |   |   | 27 | % |   |   | 6 |   |
| Original Maturity Date Not Reached       |                     |                     | 42,542  |   |   |   | 12 | % |   |   | 7 |   |
| Total Loan Principal                     |                     | $                        | 344,579 |   |   |   | 100 | % |   |   | 35 |   |

----

----

|                                                  |   | Payments due by period |   |
|-------------------------------------------------------|--------|---------------------------------------|--------|
| Contractual Obligations                          |   | Total                                 |   |   | Less than 1year |   |   | 1 - 3 years |   |   | 3 - 5 years |   |   | More than 5years |   |
|                                                  |   |                                  |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Principal Payments for Long-Term Debt Obligations (1) |   | $                                     | 17,782 |   |   | $ | 9,125 |   |   | $ | 8,657 |   |   | $ | - |   |   | $ | - |   |
| Interest Payments (1)                                 |   |                                  | 1,974  |   |   |   | 1,393 |   |   |   | 580 |   |   |   | - |   |   |   | - |   |
| Funding commitments to borrowers                      |   |                                  | 9,103  |   |   |   | 9,103 |   |   |   | - |   |   |   | - |   |   |   | - |   |
| Operating Lease Obligations (2)                       |   |                                  | 4,734  |   |   |   | 588 |   |   |   | 2,272 |   |   |   | 1,525 |   |   |   | 349 |   |
| Consulting fee (3)                                    |   |                                  | 8,794  |   |   |   | 1,759 |   |   |   | 4,690 |   |   |   | 2,345 |   |   |   | - |   |
| Commission liability to broker-dealers (4)            |   |                                  | 23     |   |   |   | 23 |   |   |   | - |   |   |   | - |   |   |   | - |   |
| Total                                                 |   | $                                     | 42,410 |   |   | $ | 21,992 |   |   | $ | 16,199 |   |   | $ | 3,870 |   |   | $ | 349 |   |

|   | (1) | Includes principal and interest on current outstanding notes payable based upon the current applicable interest rates and applicable due dates ranging between 2011 and 2013. |
|--------|-----|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (2) | Includes lease obligations for our office space and equipment. |
|--------|-----|----------------------------------------------------------------|

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|   | (3) | Consulting fee for NWRA at $125,000 per month starting April 1, 2011 for 4 years and consulting fee for ITH at an annual rate of $845,000 per year. |
|--------|-----|-----------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (4) | Contingent commission liability to broker/dealers representing one-half of the amount that would have been paid to the Manager for its share of any gains resulting from the sale of our assets above our original basis. |
|--------|-----|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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| Loan Rates:                |   | Matured        |    |   |   | Q2 2011 |   |   |   | Q4 2011 |   |   |   | Q1 2012 |   |   |   | Q3 2012 |   |   |   | Q3 2013 |   |   |   | Q1 2014 |   |   | Total  |   |
|---------------------------------|--------|----------------|---------|--------|--------|--------------|--------|--------|--------|--------------|--------|--------|--------|--------------|--------|--------|--------|--------------|--------|--------|--------|--------------|--------|--------|--------|--------------|--------|--------|--------|--------|
|                            |   | (in thousands) |    |
| Variable                        |   | $              | 147,696 |   |   | $            | -      |   |   | $            | 3,681  |   |   | $            | 1,019  |   |   | $            | -      |   |   | $            | -      |   |   | $            | -      |   |   | $      | 152,396 |   |
| Fixed                           |   |           | 62,296  |   |   |         | 1,201  |   |   |         | 32,677 |   |   |         | 2,000  |   |   |         | 93,373 |   |   |         | 434    |   |   |         | 202    |   |   |   | 192,183 |   |
|                            |   | $              | 209,992 |   |   | $            | 1,201  |   |   | $            | 36,358 |   |   | $            | 3,019  |   |   | $            | 93,373 |   |   | $            | 434    |   |   | $            | 202    |   |   |   | 344,579 |   |
| Less:  Valuation Allowance |   |           |    |   |   |         |   |   |   |         |   |   |   |         |   |   |   |         |   |   |   |         |   |   |   |         |   |   |   |   | (230,286 | ) |
| Net Carrying Value              |   |           |    |   |   |         |   |   |   |         |   |   |   |         |   |   |   |         |   |   |   |         |   |   |   |         |   |   |   | $      | 114,293 |   |

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| Item 1A. | Risk Factors |
|----------|--------------|

|   | · | uncertainty surrounding the future direction of our business, available alternatives and strategy; |
|--------|--------|----------------------------------------------------------------------------------------------------|

|   | · | the diversion of the attention of our management to the loan agreement instead of to our operations and the pursuit of other opportunities that could have been beneficial to our business; |
|--------|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | our costs related to the loan, such as legal, accounting and some of the fees of our consultants and financial advisors, must be paid even if the loan is not funded and we and our stockholders do not realize any benefits of the loan; and |
|--------|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | we will be required to pay NW Capital a $5 million termination fee in the event we fail to close the loan (or NW Capital fails to close the loan as a result of certain actions or inactions by us) or we terminate the proposed loan transaction and enter into an alternate transaction within 12 months. |
|--------|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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| Item 2. | Unregistered Sales of Equity Securities and Use of Proceeds. |
|---------|--------------------------------------------------------------|

| Item 3. | Default Upon Senior Securities |
|---------|--------------------------------|

| Item 4. | (Removed and Reserved) |
|---------|------------------------|

| Item 5. | Other Information. |
|---------|--------------------|

| Item 6. | Exhibits |
|---------|----------|

----

| No.          |   | Description                                                                                                                                                                                                                                                                                                                                                                 |
|--------------|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|         |   |                                                                                                                                                                                                                                                                                                                                                                        |
| 3.1          |   | Form of Certificate of Designation of Convertible Series A Preferred Stock (filed as Exhibit 3.1 to Current Report on Form 8-K on April 26, 2011 and incorporated herein by reference).                                                                                                                                                                                     |
|         |   |                                                                                                                                                                                                                                                                                                                                                                        |
| 4.1          |   | Registration Rights Agreement (filed as Exhibit 4.1 to Current Report on Form 8-K on April 26, 2011 and incorporated herein by reference).                                                                                                                                                                                                                                  |
|         |   |                                                                                                                                                                                                                                                                                                                                                                        |
| 10.1         |   | Amended and Restated Consulting Agreement by and between IMH Financial Corporation and ITH Partners, LLC (filed as Exhibit 10.6 to Current Report on Form 8-K on April 26, 2011 and incorporated herein by reference).                                                                                                                                                      |
|         |   |                                                                                                                                                                                                                                                                                                                                                                        |
| 10.2         |   | Commitment Letter by and between IMH Financial Corporation and NWRA Ventures I, LLC (filed as Exhibit 10.1 to Current Report on Form 8-K on April 26, 2011 and incorporated herein by reference).                                                                                                                                                                           |
|         |   |                                                                                                                                                                                                                                                                                                                                                                        |
| 10.3         |   | Loan Agreement by and between IMH Financial Corporation and NWRA Ventures I, LLC (filed as Exhibit 10.2 to Current Report on Form 8-K on April 26, 2011 and incorporated herein by reference).                                                                                                                                                                              |
|         |   |                                                                                                                                                                                                                                                                                                                                                                        |
| 10.4         |   | Form of Promissory Note (filed as Exhibit 10.3 to Current Report on Form 8-K on April 26, 2011 and incorporated herein by reference).                                                                                                                                                                                                                                       |
|         |   |                                                                                                                                                                                                                                                                                                                                                                        |
| 10.5         |   | Advisory Services Agreement with New World Realty Advisors, LLC (filed as Exhibit 10.3 to Current Report on Form 8-K on April 26, 2011 and incorporated herein by reference).                                                                                                                                                                                               |
|         |   |                                                                                                                                                                                                                                                                                                                                                                        |
| 10.6         |   | Separation Agreement with Shane Albers (filed as Exhibit 10.6 to Current Report on Form 8-K on April 26, 2011 and incorporated herein by reference).                                                                                                                                                                                                                        |
|         |   |                                                                                                                                                                                                                                                                                                                                                                        |
| 10.7         |   | Employment Agreement with William Meris (filed as Exhibit 10.7 to Current Report on Form 8-K on April 26, 2011 and incorporated herein by reference).                                                                                                                                                                                                                       |
|         |   |                                                                                                                                                                                                                                                                                                                                                                        |
| 10.8         |   | Employment Agreement with Steven Darak (filed as Exhibit 10.8 to Current Report on Form 8-K on April 26, 2011 and incorporated herein by reference).                                                                                                                                                                                                                        |
|         |   |                                                                                                                                                                                                                                                                                                                                                                        |
| 31.1*        |   | Certification of Chief Executive Officer of IMH Financial Corporation pursuant to Section 302 of the Sarbanes-Oxley Act of 2002                                                                                                                                                                                                                                             |
|         |   |                                                                                                                                                                                                                                                                                                                                                                        |
| 31.2*        |   | Certification of Chief Financial Officer of IMH Financial Corporation pursuant to Section 302 of the Sarbanes-Oxley Act of 2002                                                                                                                                                                                                                                             |
|         |   |                                                                                                                                                                                                                                                                                                                                                                        |
| 32.1*† |   | Certification of Chief Executive Officer and the Chief Financial Officer of IMH Financial Corporation 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 Company, whether made before or after the date hereof, regardless of any general incorporation language in such filing. |

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| Date: May 16, 2011 | IMH FINANCIAL CORPORATION |
|--------------------|---------------------------|
|               |                      |   |
|               | By:                       | /s/ Steven Darak |
|               |                      | Steven Darak |
|               |                      | Chief Financial Officer |
|               |                      | (Principal Financial and Accounting Officer andDuly Authorized Officer) |

----

| No.          |   | Description                                                                                                                                                                                                                                                                                                                                                                 |
|--------------|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|         |   |                                                                                                                                                                                                                                                                                                                                                                        |
| 3.1          |   | Form of Certificate of Designation of Convertible Series A Preferred Stock (filed as Exhibit 3.1 to Current Report on Form 8-K on April 26, 2011 and incorporated herein by reference).                                                                                                                                                                                     |
|         |   |                                                                                                                                                                                                                                                                                                                                                                        |
| 4.1          |   | Registration Rights Agreement (filed as Exhibit 4.1 to Current Report on Form 8-K on April 26, 2011 and incorporated herein by reference).                                                                                                                                                                                                                                  |
|         |   |                                                                                                                                                                                                                                                                                                                                                                        |
| 10.1         |   | Amended and Restated Consulting Agreement by and between IMH Financial Corporation and ITH Partners, LLC (filed as Exhibit 10.6 to Current Report on Form 8-K on April 26, 2011 and incorporated herein by reference).                                                                                                                                                      |
|         |   |                                                                                                                                                                                                                                                                                                                                                                        |
| 10.2         |   | Commitment Letter by and between IMH Financial Corporation and NWRA Ventures I, LLC (filed as Exhibit 10.1 to Current Report on Form 8-K on April 26, 2011 and incorporated herein by reference).                                                                                                                                                                           |
|         |   |                                                                                                                                                                                                                                                                                                                                                                        |
| 10.3         |   | Loan Agreement by and between IMH Financial Corporation and NWRA Ventures I, LLC (filed as Exhibit 10.2 to Current Report on Form 8-K on April 26, 2011 and incorporated herein by reference).                                                                                                                                                                              |
|         |   |                                                                                                                                                                                                                                                                                                                                                                        |
| 10.4         |   | Form of Promissory Note (filed as Exhibit 10.3 to Current Report on Form 8-K on April 26, 2011 and incorporated herein by reference).                                                                                                                                                                                                                                       |
|         |   |                                                                                                                                                                                                                                                                                                                                                                        |
| 10.5         |   | Advisory Services Agreement with New World Realty Advisors, LLC (filed as Exhibit 10.3 to Current Report on Form 8-K on April 26, 2011 and incorporated herein by reference).                                                                                                                                                                                               |
|         |   |                                                                                                                                                                                                                                                                                                                                                                        |
| 10.6         |   | Separation Agreement with Shane Albers (filed as Exhibit 10.6 to Current Report on Form 8-K on April 26, 2011 and incorporated herein by reference).                                                                                                                                                                                                                        |
|         |   |                                                                                                                                                                                                                                                                                                                                                                        |
| 10.7         |   | Employment Agreement with William Meris (filed as Exhibit 10.7 to Current Report on Form 8-K on April 26, 2011 and incorporated herein by reference).                                                                                                                                                                                                                       |
|         |   |                                                                                                                                                                                                                                                                                                                                                                        |
| 10.8         |   | Employment Agreement with Steven Darak (filed as Exhibit 10.8 to Current Report on Form 8-K on April 26, 2011 and incorporated herein by reference).                                                                                                                                                                                                                        |
|         |   |                                                                                                                                                                                                                                                                                                                                                                        |
| 31.1*        |   | Certification of Chief Executive Officer of IMH Financial Corporation pursuant to Section 302 of the Sarbanes-Oxley Act of 2002                                                                                                                                                                                                                                             |
|         |   |                                                                                                                                                                                                                                                                                                                                                                        |
| 31.2*        |   | Certification of Chief Financial Officer of IMH Financial Corporation pursuant to Section 302 of the Sarbanes-Oxley Act of 2002                                                                                                                                                                                                                                             |
|         |   |                                                                                                                                                                                                                                                                                                                                                                        |
| 32.1*† |   | Certification of Chief Executive Officer and the Chief Financial Officer of IMH Financial Corporation 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 Company, whether made before or after the date hereof, regardless of any general incorporation language in such filing. |

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