##### Table of Contents



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




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##### 



IMH SECURED LOAN FUND, LLC
QUARTERLY REPORT ON FORM 10-Q
INDEX
 PART I  FINANCIAL INFORMATIONItem 1. Financial StatementsConsolidated Balance Sheets as of June 30, 2009 and December 31, 2008
    
    
    3Consolidated Statements of Net Earnings for the Six and Three months Ended June 30, 2009 and 2008
    
    
    4Consolidated Statement of Members Equity for the Six Months Ended June 30, 2009
    
    
    5Consolidated Statements of Cash Flows for the Six Months Ended June 30, 2009 and 2008
    
    
    6Notes to Consolidated Financial Statements
    
    
    7Item 2. Managements Discussion and Analysis of Financial Condition and Results of Operations
    
    
    25Item 3. Quantitative and Qualitative Disclosures About Market Risk
    
    
    53Item 4T. Controls and Procedures
    
    
    56PART II  OTHER INFORMATIONItem 1. Legal Proceedings
    
    
    56Item 1A. Risk Factors
    
    
    57Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
    
    
    60Item 6. Exhibits
    
    
    61Signatures
    
    
    62Index to Exhibits
    
    
    63Exhibit 31.1Exhibit 31.2Exhibit 32.1
   2




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##### Table of Contents



PART I
FINANCIAL INFORMATION
 
 Item 1.
    
    Financial Statements.
 IMH SECURED LOAN FUND, LLC
 
 Consolidated Balance Sheets
 (In thousands, except unit data)
 June 30,
    
    
    December 31,2009
    
    
    2008(Unaudited)ASSETSCash and Cash Equivalents
    
    $
    3,480
    
    
    $
    23,815Mortgage Loans:Mortgage Loan Note Obligations
    
    
    511,033
    
    
    
    549,686Less Undisbursed Portion of Loans-in-process and Interest Reserves
    
    
    (3,861
    )
    
    
    (26,574
    )Principal Outstanding Held for Investment
    
    
    507,172
    
    
    
    523,112Mortgage Loans Held for Sale, Net
    
    
    100,299
    
    
    
    90,742Mortgage Loan Principal Outstanding
    
    
    607,471
    
    
    
    613,854Less Allowance for Credit Loss
    
    
    (282,910
    )
    
    
    (300,310
    )Mortgage Loans, Net
    
    
    324,561
    
    
    
    313,544Accrued Interest and Other Receivables
    
    
    14,729
    
    
    
    12,014Real Estate Held for Sale
    
    
    4,492
    
    
    
    Real Estate Held for Development, Net:Acquired through Foreclosure
    
    
    62,214
    
    
    
    55,318Purchased for Investment
    
    
    7,554
    
    
    
    7,463Real Estate Held for Development, Net
    
    
    69,768
    
    
    
    62,781Deposits and Other Assets
    
    
    315
    
    
    
    179Advances to Fund Manager
    
    
    1,309
    
    
    
    2,471Total Assets
    
    $
    418,654
    
    
    $
    414,804LIABILITIESPayables to Fund Manager and Other Liabilities
    
    $
    2,002
    
    
    $
    1,751Distributions Payable to Members
    
    
    
    
    
    
    4,963Borrowings From Fund Manager
    
    
    5,834
    
    
    
    Unearned Income and Other Funds Held
    
    
    256
    
    
    
    39Total Liabilities
    
    
    8,092
    
    
    
    6,753MEMBERS EQUITYAccumulated Deficit
    
    
    (319,821
    )
    
    
    (322,332
    )Members Equity  $10,000 per unit stated value,
authorized units set at discretion of the
Manager 
73,038 units issued and outstanding at June 30,
2009 and December 31, 2008, respectively
    
    
    730,383
    
    
    
    730,383Total Members Equity
    
    
    410,562
    
    
    
    408,051Commitments and Contingent LiabilitiesTotal Liabilities and Members Equity
    
    $
    418,654
    
    
    $
    414,804
 The accompanying notes are an integral part of these statements
  3




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IMH SECURED LOAN FUND, LLC
 
 Consolidated Statements of Net Earnings
 (Unaudited)
 (In thousands, except unit and per unit data)
 Six Months Ended June 30,
    
    
    Three Months Ended June 30,2009
    
    
    2008
    
    
    2009
    
    
    2008INTEREST AND FEE INCOMEMortgage Loans
    
    $
    17,559
    
    
    $
    32,350
    
    
    $
    5,621
    
    
    $
    16,525Investments and Money Market Accounts
    
    
    36
    
    
    
    1,322
    
    
    
    
    
    
    
    542Total Interest and Fee Income
    
    
    17,595
    
    
    
    33,672
    
    
    
    5,621
    
    
    
    17,067EXPENSESManagement Fees
    
    
    419
    
    
    
    519
    
    
    
    170
    
    
    
    272Default Related Expenses
    
    
    328
    
    
    
    85
    
    
    
    202
    
    
    
    31Operating Expenses for Real Estate
Owned
    
    
    1,340
    
    
    
    
    
    
    
    1,126
    
    
    
    Professional Fees
    
    
    1,188
    
    
    
    67
    
    
    
    880
    
    
    
    26Interest Expense:Borrowings from Fund Manager
    
    
    103
    
    
    
    
    
    
    
    103
    
    
    
    Borrowings on Note Payable
    
    
    
    
    
    
    78
    
    
    
    
    
    
    
    49Interest Expense
    
    
    103
    
    
    
    78
    
    
    
    103
    
    
    
    49Total Expenses
    
    
    3,378
    
    
    
    749
    
    
    
    2,481
    
    
    
    378Net Earnings
    
    $
    14,217
    
    
    $
    32,923
    
    
    $
    3,140
    
    
    $
    16,689Net Earnings Allocated to Members per
Weighted Average Membership Units
Outstanding
    
    $
    194.64
    
    
    $
    522.98
    
    
    $
    43.00
    
    
    $
    255.09Distributions to Members per Weighted
Average Membership Units Outstanding
    
    $
    160.27
    
    
    $
    516.83
    
    
    $
    27.60
    
    
    $
    252.69Weighted Average Membership Units
Outstanding
    
    
    73,038
    
    
    
    62,953
    
    
    
    73,038
    
    
    
    65,424
 The accompanying notes are an integral part of these statements
  4




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IMH SECURED LOAN FUND, LLC
 
 Consolidated Statement of Members Equity
 Six Months Ended June 30, 2009
 (Unaudited)
 (In thousands, except unit data)
 TotalMembers
    
    
    Members
    
    
    Accumulated
    
    
    MembersUnits
    
    
    Capital
    
    
    Deficit
    
    
    EquityBalances at December 31, 2008
    
    
    73,038
    
    
    $
    730,383
    
    
    $
    (322,332
    )
    
    $
    408,051Net Earnings  Six months
ended June 30, 2009
    
    
    
    
    
    
    
    
    
    
    14,217
    
    
    
    14,217Distributions to Members
    
    
    
    
    
    
    
    
    
    
    (11,706
    )
    
    
    (11,706
    )Net Activity for Period
    
    
    
    
    
    
    
    
    
    
    2,511
    
    
    
    2,511Balances at June 30, 2009
    
    
    73,038
    
    
    $
    730,383
    
    
    $
    (319,821
    )
    
    $
    410,562
 The accompanying notes are an integral part of these statements
  5




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IMH SECURED LOAN FUND, LLC
 
 Consolidated Statements of Cash Flows
 Six Months Ended June 30, 2009 and 2008
 (Unaudited)
 (In thousands)
 Six Months Ended June 30,2009
    
    
    2008CASH FLOWS  Operating Activities:Net Earnings
    
    $
    14,217
    
    
    $
    32,923Adjustments to Reconcile Net Earnings to Net Cash
Provided by Operating Activities:Accretion of Note Discount
    
    
    
    
    
    
    (6,054
    )Increase in Accrued Interest Receivable
    
    
    (3,195
    )
    
    
    (2,586
    )Increase in Deposits and Other Assets
    
    
    (332
    )
    
    
    (93
    )Increase (Decrease) in Due From/To Fund Manager
    
    
    1,413
    
    
    
    (166
    )Increase (Decrease) in Unearned Income
    
    
    217
    
    
    
    (584
    )Net Cash Provided by Operating Activities
    
    
    12,320
    
    
    
    23,440CASH FLOWS  Investing Activities:Mortgage Loans Fundings
    
    
    (21,912
    )
    
    
    (133,930
    )Mortgage Loan Repayments
    
    
    1,481
    
    
    
    32,834Mortgage Loan Repayment from Sale of Whole Loan
    
    
    
    
    
    
    31,325Proceeds from Real Estate Sold
    
    
    459
    
    
    
    Investment in Real Estate Held for Development
    
    
    (1,848
    )
    
    
    (7,881
    )Net Cash Used in Investing Activities
    
    
    (21,820
    )
    
    
    (77,652
    )CASH FLOWS  Financing Activities:Proceeds from Note Payable to Bank
    
    
    
    
    
    
    8,000Repayment of Note Payable to Bank
    
    
    
    
    
    
    (8,000
    )Proceeds from Borrowings from Manager
    
    
    6,000
    
    
    
    Repayments of Borrowings from Manager
    
    
    (166
    )
    
    
    Increase (Decrease) in Member Investments
Pending Activation
    
    
    
    
    
    
    (489
    )Members Capital Investments
    
    
    
    
    
    
    166,871Members Redemptions
    
    
    
    
    
    
    (62,793
    )Members Distributions
    
    
    (16,669
    )
    
    
    (14,921
    )Net Cash Provided (Used) by Financing Activities
    
    
    (10,835
    )
    
    
    88,668Net Increase (Decrease) in Cash and Cash Equivalents
    
    
    (20,335
    )
    
    
    34,456Cash and Cash Equivalents:Beginning of Period
    
    
    23,815
    
    
    
    73,604End of Period
    
    $
    3,480
    
    
    $
    108,060Supplemental Cash Flow Information:Interest Paid
    
    $
    103
    
    
    $
    78Supplemental Disclosure of Non-Cash Financing
and Investing Activities:Real Estate Acquired through Foreclosure
    
    $
    10,090
    
    
    $
    38,180Loans Satisfied with Next-Phase Financing
    
    $
    
    
    
    $
    29,839
 The accompanying notes are an integral part of these statements
  6




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




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IMH SECURED LOAN FUND, LLC
 NOTE 1  FUND DESCRIPTION AND BASIS OF PRESENTATION  CONTINUED
     
    
    Implemented a comprehensive cost reduction program, including a reduction in staff.
The reduction in staff affected nearly 60% of the Managers employees while preserving
core functionality in all operational areas. The Manager has stabilized monthly operating
costs at approximately $400 per month and is evaluating other cost cutting measures.
  8




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IMH SECURED LOAN FUND, LLC
 NOTE 1  FUND DESCRIPTION AND BASIS OF PRESENTATION  CONTINUED
 
    
    On-going collaboration with investment banking firms to close financing and
capital raise alternatives that are in process.
 
    
    Continued to explore mechanisms through which the Manager can continue to
participate in the capital markets, including, without limitation, the use of additional
funding vehicles to capitalize on what the Manager believes are a multitude of
opportunities arising from the disruptions in the capital and credit markets.
 
    
    Is engaged in on-going negotiations with creditors to defer or otherwise
restructure existing liabilities of the Manager.
 
    
    Considered other initiatives, as they arise, to insure the continued
viability of the Manager as an operating entity.
  NOTE 2  SIGNIFICANT ACCOUNTING POLICIES
 Basis of Accounting
    9




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IMH SECURED LOAN FUND, LLC
 NOTE 2  SIGNIFICANT ACCOUNTING POLICIES  CONTINUED
 Real Estate Held for Sale
  Use of Estimates
  Recent Accounting Pronouncements
 The Hierarchy of Generally Accepted Accounting Principles The Meaning of Present Fairly in
Conformity With Generally Accepted Accounting Principles.
 Subsequent Events
 The FASB Accounting Standards Codification and
the Hierarchy of Generally Accepted Accounting Principles  a Replacement of FASB Statement No.
162
  10




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IMH SECURED LOAN FUND, LLC
 NOTE 2  SIGNIFICANT ACCOUNTING POLICIES  CONTINUED
 Recognition and
Presentation of Other-Than-Temporary Impairments
 Determining Fair Value When the
Volume and Level of Activity for the Asset or Liability Have Significantly Decreased and
Identifying Transactions That Are Not Orderly Fair Value Measurements
 Interim Disclosures
about Fair Value of Financial Instruments Disclosures About
Fair Value of Financial Instruments Interim
Financial Reporting
 Reclassifications
  Subsequent Events
   11




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




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IMH SECURED LOAN FUND, LLC
 NOTE 4  MORTGAGE LOANS, LOAN PARTICIPATIONS AND LOAN SALES  CONTINUED
 Loan Interest Rates
  June 30, 2009Fixed Rate
    
    
    Variable Rate
    
    
    TotalOutstanding
    
    
    
    
    
    
    Outstanding
    
    
    
    
    
    
    Outstanding
    
    
    Allowance for
    
    
    Net CarryingCurrent Rate:
    
    #
    
    
    Principal
    
    
    #
    
    
    Principal
    
    
    #
    
    
    Principal
    
    
    Credit Loss
    
    
    Amount
    
    
    %6.00%
    
    
    
    1
    
    
    $
    5,890
    
    
    
    
    
    
    $
    
    
    
    
    1
    
    
    $
    5,890
    
    
    $
    
    
    
    $
    5,890
    
    
    
    1.8
    %8.00%
    
    
    
    2
    
    
    
    3,892
    
    
    
    
    
    
    
    
    
    
    
    2
    
    
    
    3,892
    
    
    
    
    
    
    
    3,892
    
    
    
    1.2
    %8.25%
    
    
    
    1
    
    
    
    55,145
    
    
    
    
    
    
    
    
    
    
    
    1
    
    
    
    55,145
    
    
    
    
    
    
    
    55,145
    
    
    
    17.0
    %9.00%
    
    
    
    1
    
    
    
    1,589
    
    
    
    
    
    
    
    
    
    
    
    1
    
    
    
    1,589
    
    
    
    (783
    )
    
    
    806
    
    
    
    0.2
    %10.00%
    
    
    
    3
    
    
    
    27,886
    
    
    
    
    
    
    
    
    
    
    
    3
    
    
    
    27,886
    
    
    
    (22,809
    )
    
    
    5,077
    
    
    
    1.6
    %11.00%
    
    
    
    
    
    
    
    
    
    
    
    1
    
    
    
    1,982
    
    
    
    1
    
    
    
    1,982
    
    
    
    
    
    
    
    1,982
    
    
    
    0.6
    %11.50%
    
    
    
    2
    
    
    
    2,572
    
    
    
    5
    
    
    
    56,483
    
    
    
    7
    
    
    
    59,055
    
    
    
    (6,813
    )
    
    
    52,242
    
    
    
    16.2
    %11.75%
    
    
    
    1
    
    
    
    5,597
    
    
    
    
    
    
    
    
    
    
    
    1
    
    
    
    5,597
    
    
    
    
    
    
    
    5,597
    
    
    
    1.7
    %12.00%
    
    
    
    9
    
    
    
    102,554
    
    
    
    9
    
    
    
    65,403
    
    
    
    18
    
    
    
    167,957
    
    
    
    (58,191
    )
    
    
    109,766
    
    
    
    33.9
    %12.25%
    
    
    
    
    
    
    
    
    
    
    
    2
    
    
    
    56,495
    
    
    
    2
    
    
    
    56,495
    
    
    
    (51,692
    )
    
    
    4,803
    
    
    
    1.5
    %12.50%
    
    
    
    1
    
    
    
    1,454
    
    
    
    6
    
    
    
    22,441
    
    
    
    7
    
    
    
    23,895
    
    
    
    (18,012
    )
    
    
    5,883
    
    
    
    1.8
    %12.75%
    
    
    
    1
    
    
    
    37,958
    
    
    
    
    
    
    
    
    
    
    
    1
    
    
    
    37,958
    
    
    
    (24,894
    )
    
    
    13,064
    
    
    
    4.0
    %13.00%
    
    
    
    3
    
    
    
    29,537
    
    
    
    9
    
    
    
    54,947
    
    
    
    12
    
    
    
    84,484
    
    
    
    (64,935
    )
    
    
    19,549
    
    
    
    6.0
    %13.75%
    
    
    
    
    
    
    
    
    
    
    
    2
    
    
    
    6,528
    
    
    
    2
    
    
    
    6,528
    
    
    
    (3,781
    )
    
    
    2,747
    
    
    
    0.8
    %14.25%
    
    
    
    
    
    
    
    
    
    
    
    1
    
    
    
    69,118
    
    
    
    1
    
    
    
    69,118
    
    
    
    (31,000
    )
    
    
    38,118
    
    
    
    11.7
    %Total
    
    
    25
    
    
    $
    274,074
    
    
    
    35
    
    
    $
    333,397
    
    
    
    60
    
    
    $
    607,471
    
    
    $
    (282,910
    )
    
    $
    324,561
    
    
    
    100.0
    %% of Portfolio
    
    
    
    
    
    
    45.1
    %
    
    
    
    
    
    
    54.9
    %
    
    
    
    
    
    
    100.0
    %Weighted Average Rate
    
    
    
    
    
    
    10.97
    %
    
    
    
    
    
    
    12.65
    %
    
    
    
    
    
    
    11.89
    %Number of Loans
    
    
    
    
    
    
    25
    
    
    
    
    
    
    
    35
    
    
    
    
    
    
    
    60Average Principal
    
    
    
    
    
    $
    10,963
    
    
    
    
    
    
    $
    9,526
    
    
    
    
    
    
    $
    10,125
 December 31, 2008Fixed Rate
    
    
    Variable Rate
    
    
    TotalOutstanding
    
    
    
    
    
    
    Outstanding
    
    
    
    
    
    
    Outstanding
    
    
    Allowance for
    
    
    Net CarryingCurrent Rate:
    
    #
    
    
    Principal
    
    
    #
    
    
    Principal
    
    
    #
    
    
    Principal
    
    
    Credit Loss
    
    
    Amount
    
    
    %8.00%
    
    
    
    1
    
    
    $
    3,500
    
    
    
    
    
    
    $
    
    
    
    
    1
    
    
    $
    3,500
    
    
    $
    
    
    
    $
    3,500
    
    
    
    1.1
    %9.00%
    
    
    
    1
    
    
    
    10,461
    
    
    
    1
    
    
    
    1,622
    
    
    
    2
    
    
    
    12,083
    
    
    
    (10,175
    )
    
    
    1,908
    
    
    
    0.6
    %10.00%
    
    
    
    1
    
    
    
    26,709
    
    
    
    
    
    
    
    
    
    
    
    1
    
    
    
    26,709
    
    
    
    (23,226
    )
    
    
    3,483
    
    
    
    1.1
    %11.00%
    
    
    
    
    
    
    
    
    
    
    
    1
    
    
    
    1,981
    
    
    
    1
    
    
    
    1,981
    
    
    
    
    
    
    
    1,981
    
    
    
    0.6
    %11.25%
    
    
    
    
    
    
    
    
    
    
    
    1
    
    
    
    46,020
    
    
    
    1
    
    
    
    46,020
    
    
    
    
    
    
    
    46,020
    
    
    
    14.7
    %11.50%
    
    
    
    2
    
    
    
    2,651
    
    
    
    6
    
    
    
    94,283
    
    
    
    8
    
    
    
    96,934
    
    
    
    (15,928
    )
    
    
    81,006
    
    
    
    25.8
    %11.75%
    
    
    
    1
    
    
    
    4,752
    
    
    
    
    
    
    
    
    
    
    
    1
    
    
    
    4,752
    
    
    
    
    
    
    
    4,752
    
    
    
    1.5
    %12.00%
    
    
    
    10
    
    
    
    75,758
    
    
    
    9
    
    
    
    67,683
    
    
    
    19
    
    
    
    143,441
    
    
    
    (54,499
    )
    
    
    88,942
    
    
    
    28.4
    %12.25%
    
    
    
    1
    
    
    
    631
    
    
    
    3
    
    
    
    55,850
    
    
    
    4
    
    
    
    56,481
    
    
    
    (52,775
    )
    
    
    3,706
    
    
    
    1.2
    %12.50%
    
    
    
    1
    
    
    
    1,929
    
    
    
    6
    
    
    
    22,227
    
    
    
    7
    
    
    
    24,156
    
    
    
    (18,026
    )
    
    
    6,130
    
    
    
    2.0
    %12.75%
    
    
    
    1
    
    
    
    37,935
    
    
    
    
    
    
    
    
    
    
    
    1
    
    
    
    37,935
    
    
    
    (25,394
    )
    
    
    12,541
    
    
    
    4.0
    %13.00%
    
    
    
    3
    
    
    
    27,897
    
    
    
    9
    
    
    
    54,947
    
    
    
    12
    
    
    
    82,844
    
    
    
    (64,831
    )
    
    
    18,013
    
    
    
    5.7
    %13.25%
    
    
    
    
    
    
    
    
    
    
    
    1
    
    
    
    2,821
    
    
    
    1
    
    
    
    2,821
    
    
    
    (1,675
    )
    
    
    1,146
    
    
    
    0.4
    %13.75%
    
    
    
    
    
    
    
    
    
    
    
    2
    
    
    
    6,528
    
    
    
    2
    
    
    
    6,528
    
    
    
    (3,781
    )
    
    
    2,747
    
    
    
    0.9
    %14.25%
    
    
    
    
    
    
    
    
    
    
    
    1
    
    
    
    67,669
    
    
    
    1
    
    
    
    67,669
    
    
    
    (30,000
    )
    
    
    37,669
    
    
    
    12.0
    %Total
    
    
    22
    
    
    $
    192,223
    
    
    
    40
    
    
    $
    421,631
    
    
    
    62
    
    
    $
    613,854
    
    
    $
    (300,310
    )
    
    $
    313,544
    
    
    
    100.0
    %% of Portfolio
    
    
    
    
    
    
    31.3
    %
    
    
    
    
    
    
    68.7
    %
    
    
    
    
    
    
    100.0
    %Weighted Average
Rate
    
    
    
    
    
    
    11.71
    %
    
    
    
    
    
    
    12.39
    %
    
    
    
    
    
    
    12.18
    %Number of Loans
    
    
    
    
    
    
    22
    
    
    
    
    
    
    
    40
    
    
    
    
    
    
    
    62Average Principal
    
    
    
    
    
    $
    8,737
    
    
    
    
    
    
    $
    10,541
    
    
    
    
    
    
    $
    9,901
  13




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##### Table of Contents



IMH SECURED LOAN FUND, LLC
 NOTE 4  MORTGAGE LOANS, LOAN PARTICIPATIONS AND LOAN SALES  CONTINUED
  Loan Maturities and Loans in Default
  June 30, 2009Quarter
    
    Amount
    
    
    Percent
    
    
    #Matured
    
    $
    360,963
    
    
    59.4%
    
    
    
    32Q3 2009
    
    
    78,512
    
    
    12.9%
    
    
    
    10Q4 2009
    
    
    11,796
    
    
    1.9%
    
    
    
    2Q1 2010
    
    
    976
    
    
    0.2%
    
    
    
    2Q2 2010
    
    
    94,931
    
    
    15.6%
    
    
    
    2Q3 2010
    
    
    56,401
    
    
    9.3%
    
    
    
    10Q1 2011
    
    
    3,500
    
    
    0.6%
    
    
    
    1Q1 2012
    
    
    392
    
    
    0.1%
    
    
    
    1Total
    
    
    607,471
    
    
    100.0%
    
    
    
    60Less: Allowance
for Credit Loss
    
    
    (282,910
    )Net Carrying Value
    
    $
    324,561
   14




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##### Table of Contents



IMH SECURED LOAN FUND, LLC
 NOTE 4  MORTGAGE LOANS, LOAN PARTICIPATIONS AND LOAN SALES  CONTINUED
    Percent of
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Non-AccruedOutstanding
    
    
    
    
    
    
    Outstanding
    
    
    Allowance for
    
    
    Net Carrying
    
    
    Accrued
    
    
    NotePrincipal
    
    
    #
    
    
    Principal
    
    
    Credit Loss
    
    
    Amount
    
    
    Interest
    
    
    Interest
    
    
    TotalArizona
    
    
    41.9
    %
    
    
    20
    
    
    $
    217,415
    
    
    $
    (110,357
    )
    
    $
    107,058
    
    
    $
    3,949
    
    
    $
    4,337
    
    
    $
    115,344Idaho
    
    
    9.5
    %
    
    
    2
    
    
    
    49,580
    
    
    
    (37,530
    )
    
    
    12,050
    
    
    
    1,948
    
    
    
    2,988
    
    
    
    16,986California
    
    
    32.9
    %
    
    
    17
    
    
    
    170,988
    
    
    
    (123,877
    )
    
    
    47,111
    
    
    
    4,021
    
    
    
    7,351
    
    
    
    58,483Minnesota
    
    
    2.4
    %
    
    
    1
    
    
    
    12,453
    
    
    
    
    
    
    
    12,453
    
    
    
    495
    
    
    
    754
    
    
    
    13,702Texas
    
    
    10.8
    %
    
    
    4
    
    
    
    56,257
    
    
    
    (5,872
    )
    
    
    50,385
    
    
    
    1,558
    
    
    
    529
    
    
    
    52,472Nevada
    
    
    1.5
    %
    
    
    1
    
    
    
    7,969
    
    
    
    (1,876
    )
    
    
    6,093
    
    
    
    319
    
    
    
    474
    
    
    
    6,886New Mexico
    
    
    1.0
    %
    
    
    2
    
    
    
    5,240
    
    
    
    (667
    )
    
    
    4,573
    
    
    
    43
    
    
    
    280
    
    
    
    4,896100.0
    %
    
    
    47
    
    
    $
    519,902
    
    
    $
    (280,179
    )
    
    $
    239,723
    
    
    $
    12,333
    
    
    $
    16,713
    
    
    $
    268,769
  Fair Value Measurement
 Accounting by Creditors for Impairment of a
Loan Fair Value Measurements,
  15




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##### Table of Contents



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




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##### Table of Contents



IMH SECURED LOAN FUND, LLC
 NOTE 4  MORTGAGE LOANS, LOAN PARTICIPATIONS AND LOAN SALES  CONTINUED
     2009Balance at beginning of period
    
    $
    300,310Valuation charge for current fair value
    
    
    Transferred to other accounts
    
    
    (17,400
    )Balance at end of period
    
    $
    282,910
  17




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##### Table of Contents



IMH SECURED LOAN FUND, LLC
 NOTE 4  MORTGAGE LOANS, LOAN PARTICIPATIONS AND LOAN SALES  CONTINUED
 Loan Classifications
  June 30, 2009
    
    
    December 31, 2008Amount
    
    
    %
    
    
    #
    
    
    Amount
    
    
    %
    
    
    #Pre-entitled Land:Held for Investment
    
    $
    7,178
    
    
    
    1.2
    %
    
    
    2
    
    
    $
    7,178
    
    
    
    1.2
    %
    
    
    2Processing Entitlements
    
    
    194,418
    
    
    
    32.0
    %
    
    
    11
    
    
    
    200,902
    
    
    
    32.8
    %
    
    
    12201,596
    
    
    
    33.2
    %
    
    
    13
    
    
    
    208,080
    
    
    
    34.0
    %
    
    
    14Entitled Land:Held for Investment
    
    
    112,104
    
    
    
    18.5
    %
    
    
    17
    
    
    
    114,307
    
    
    
    18.6
    %
    
    
    17Infrastructure under Construction
    
    
    60,080
    
    
    
    9.9
    %
    
    
    4
    
    
    
    57,908
    
    
    
    9.4
    %
    
    
    4Improved and Held for Vertical
Construction
    
    
    46,088
    
    
    
    7.6
    %
    
    
    4
    
    
    
    54,486
    
    
    
    8.9
    %
    
    
    5218,272
    
    
    
    36.0
    %
    
    
    25
    
    
    
    226,701
    
    
    
    36.9
    %
    
    
    26Construction & Existing Structures:New Structure  Construction in-process
    
    
    41,474
    
    
    
    6.8
    %
    
    
    14
    
    
    
    43,814
    
    
    
    7.1
    %
    
    
    14Existing Structure Held for Investment
    
    
    37,890
    
    
    
    6.2
    %
    
    
    5
    
    
    
    37,482
    
    
    
    6.1
    %
    
    
    5Existing Structure  Improvements
    
    
    108,239
    
    
    
    17.8
    %
    
    
    3
    
    
    
    97,777
    
    
    
    15.9
    %
    
    
    3187,603
    
    
    
    30.8
    %
    
    
    22
    
    
    
    179,073
    
    
    
    29.1
    %
    
    
    22Total
    
    
    607,471
    
    
    
    100.0
    %
    
    
    60
    
    
    
    613,854
    
    
    
    100.0
    %
    
    
    62Less: Allowance for Credit Loss
    
    
    (282,910
    )
    
    
    
    
    
    
    
    
    
    
    (300,310
    )Net Carrying Value
    
    $
    324,561
    
    
    
    
    
    
    
    
    
    
    $
    313,544
  June 30, 2009
    
    
    December 31, 2008Amount
    
    
    %
    
    
    #
    
    
    Amount
    
    
    %
    
    
    #Residential
    
    $
    265,774
    
    
    
    43.8
    %
    
    
    36
    
    
    $
    278,644
    
    
    
    45.4
    %
    
    
    37Mixed Use
    
    
    203,953
    
    
    
    33.6
    %
    
    
    10
    
    
    
    206,691
    
    
    
    33.7
    %
    
    
    11Commercial
    
    
    136,674
    
    
    
    22.5
    %
    
    
    13
    
    
    
    127,449
    
    
    
    20.8
    %
    
    
    13Industrial
    
    
    1,070
    
    
    
    0.1
    %
    
    
    1
    
    
    
    1,070
    
    
    
    0.1
    %
    
    
    1Total
    
    
    607,471
    
    
    
    100.0
    %
    
    
    60
    
    
    
    613,854
    
    
    
    100.0
    %
    
    
    62Less: Allowance for
Credit Loss
    
    
    (282,910
    )
    
    
    
    
    
    
    
    
    
    
    (300,310
    )Net Carrying Value
    
    $
    324,561
    
    
    
    
    
    
    
    
    
    
    $
    313,544
   18




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##### Table of Contents



IMH SECURED LOAN FUND, LLC
 NOTE 4  MORTGAGE LOANS, LOAN PARTICIPATIONS AND LOAN SALES  CONTINUED
 Geographic Diversification
  June 30, 2009
    
    
    December 31, 2008Outstanding
    
    
    Allowance for
    
    
    Net Carrying
    
    
    
    
    
    
    
    
    
    
    Outstanding
    
    
    Allowance for
    
    
    Net CarryingPrincipal
    
    
    Credit Loss
    
    
    Amount
    
    
    Percent
    
    
    #
    
    
    Principal
    
    
    Credit Loss
    
    
    Amount
    
    
    Percent
    
    
    #Arizona
    
    $
    287,462
    
    
    $
    (112,451
    )
    
    $
    175,011
    
    
    
    53.9
    %
    
    
    29
    
    
    $
    294,362
    
    
    $
    (128,499
    )
    
    $
    165,863
    
    
    
    52.9
    %
    
    
    31California
    
    
    180,570
    
    
    
    (123,877
    )
    
    
    56,693
    
    
    
    17.5
    %
    
    
    20
    
    
    
    177,255
    
    
    
    (124,422
    )
    
    
    52,833
    
    
    
    16.9
    %
    
    
    20New Mexico
    
    
    5,240
    
    
    
    (667
    )
    
    
    4,573
    
    
    
    1.4
    %
    
    
    2
    
    
    
    5,240
    
    
    
    (637
    )
    
    
    4,603
    
    
    
    1.5
    %
    
    
    2Texas
    
    
    56,257
    
    
    
    (5,872
    )
    
    
    50,385
    
    
    
    15.5
    %
    
    
    4
    
    
    
    55,825
    
    
    
    (5,781
    )
    
    
    50,044
    
    
    
    16.0
    %
    
    
    4Idaho
    
    
    49,580
    
    
    
    (37,530
    )
    
    
    12,050
    
    
    
    3.7
    %
    
    
    2
    
    
    
    49,578
    
    
    
    (38,458
    )
    
    
    11,120
    
    
    
    3.5
    %
    
    
    2Minnesota
    
    
    12,453
    
    
    
    
    
    
    
    12,453
    
    
    
    3.8
    %
    
    
    1
    
    
    
    16,590
    
    
    
    
    
    
    
    16,590
    
    
    
    5.3
    %
    
    
    1Nevada
    
    
    7,969
    
    
    
    (1,876
    )
    
    
    6,093
    
    
    
    1.9
    %
    
    
    1
    
    
    
    7,969
    
    
    
    (1,876
    )
    
    
    6,093
    
    
    
    1.9
    %
    
    
    1Utah
    
    
    7,940
    
    
    
    (637
    )
    
    
    7,303
    
    
    
    2.3
    %
    
    
    1
    
    
    
    7,035
    
    
    
    (637
    )
    
    
    6,398
    
    
    
    2.0
    %
    
    
    1Total
    
    $
    607,471
    
    
    $
    (282,910
    )
    
    $
    324,561
    
    
    
    100.0
    %
    
    
    60
    
    
    $
    613,854
    
    
    $
    (300,310
    )
    
    $
    313,544
    
    
    
    100.0
    %
    
    
    62
 Borrower Concentrations
  Mortgage Loan Participations and Whole Loans Sold
     19




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##### Table of Contents



IMH SECURED LOAN FUND, LLC
 NOTE 5  REAL ESTATE HELD FOR DEVELOPMENT OR SALE
        20




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##### Table of Contents



IMH SECURED LOAN FUND, LLC
 NOTE 6  MEMBER DISTRIBUTIONS AND REDEMPTIONS
 Member Distributions Reinvested and Distributions Payable to Members
   Redemptions
  NOTE 7  MANAGEMENT FEES AND RELATED PARTY ACTIVITY
 Management Fees and Other Amounts Due to Manager
     21




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##### Table of Contents



IMH SECURED LOAN FUND, LLC
 NOTE 7  MANAGEMENT FEES AND RELATED PARTY ACTIVITY  CONTINUED
    Related Party Investments and Borrowings
   22




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##### Table of Contents



IMH SECURED LOAN FUND, LLC
 NOTE 8  COMMITMENTS AND CONTINGENCIES
  June 30, 2009
    
    
    December 31, 2008Loans Held
    
    
    Loans Held
    
    
    
    
    
    
    Loans Held
    
    
    Loans Heldto Maturity
    
    
    for Sale
    
    
    Total
    
    
    to Maturity
    
    
    for Sale
    
    
    TotalUndispersed
Loans-in-process per Note Agreement
    
    $
    52,798
    
    
    $
    23,488
    
    
    $
    76,286
    
    
    $
    66,035
    
    
    $
    32,633
    
    
    $
    98,668Less: amounts not to be
funded
    
    
    (48,937
    )
    
    
    (21,038
    )
    
    
    (69,975
    )
    
    
    (39,461
    )
    
    
    (13,767
    )
    
    
    (53,228
    )Undispersed Loans-in-process perFinancial Statements
    
    $
    3,861
    
    
    $
    2,450
    
    
    $
    6,311
    
    
    $
    26,574
    
    
    $
    18,866
    
    
    $
    45,440
       23




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##### Table of Contents



IMH SECURED LOAN FUND, LLC
 NOTE 8  COMMITMENTS AND CONTINGENCIES  CONTINUED
      24




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##### Table of Contents



Item 2.
    
    Managements Discussion and Analysis of Financial Condition and Results
of Operations.
  Forward-Looking Statements
   
    
    As a result of the suspension of the Funds activities, the Manager believes that both
the Funds and the Managers ability to continue as a going concern for the next 12
months is predicated on the successful completion of one or more initiatives that are being
evaluated. Despite the cost-savings initiatives undertaken, the Manager can provide no
assurance that its liquidity situation will improve in 2009 or that the Manager will be
able to continue as a going concern. If IMH is unable to continue in its capacity as
Manager of the Fund, a replacement manager will need to be identified as discussed in
Article 11 of the Operating Agreement, which could result in a significantly different
management fee and expense structure.
 
    
    The Fund has been and will continue to be adversely affected by the general economic
slowdown and recession in the U.S. and abroad.
 
    
    We are subject to the risk that, despite recent actions and proposals by the U.S.
government and governments around the world, the economy and real estate and other markets
will not improve, which could continue to adversely affect our ability to sell or dispose
of properties we own and the ability of our borrowers to repay our loans or obtain take-out
financing in a timely manner, on reasonable terms, or at all, which would adversely affect
our liquidity and operating results.
  25




---



##### Table of Contents




    
    As allowed by the Operating Agreement of the Fund, effective October 1, 2008, IMH has
elected to suspend certain activities of the Fund, including the acceptance of any
additional investments in the Fund, the payment of redemptions requests, the acceptance of
new redemption requests, and the identification and funding of new loans (although the Fund
may finance new loans in connection with the sale of collateral under existing loans or the
sale of real estate owned). This election was made in order to preserve the Funds capital
and to stabilize the Funds operating activities and liquid assets in order to meet future
obligations, including those pursuant to the current loan commitments. There can be no
assurance that the activities of the Fund will resume in the foreseeable future, if ever.
 
    
    If the Funds liquidity continues to dissipate and the Fund is unable to meet its
obligations, the Fund may be forced to sell certain assets of the Fund for a price at or
below their current book value, which could result in a loss.
 
    
    IMH and its affiliates are subject to oversight by various state and federal regulatory
authorities, including, but not limited to, the ACC, the Arizona Department of Revenue, the
Arizona Department of Financial Institutions (Banking), the SEC and the Internal Revenue
Service, and there is a risk that examinations or enforcement or related activities by any
such agency could have a material adverse effect on the Fund.
 
    
    Our units lack liquidity and marketability and our Members cannot sell their units or
have their units redeemed. As a result, our Members may lose their entire investment or
may not be able to sell their units or have them redeemed in a timely manner, or at all, or
at the price they paid.
 
    
    We are subject to risks generally associated with the ownership of real estate-related
assets, including changing economic conditions, environmental risks, unforeseen statutory
and regulatory changes, the cost of and ability to obtain insurance and risks related to
developing and leasing of properties.
 
    
    As a mortgage lender, we are subject to a variety of external forces that could have a
material adverse effect our operations and results, including, without limitation,
fluctuations in interest rates, fluctuations in economic conditions (which are exacerbated
by our limited geographic diversity), and the effect that regulators or bankruptcy courts
could have on our operations and rights as a secured lender.
 
    
    Our loans, which are not guaranteed by any government agency, are risky and are not sold
on any secondary market, and the underwriting standards that we previously utilized may not
have been sufficient to protect Members from loan defaults or ensure that sufficient
collateral, including collateral pledged by guarantors, will exist to protect Members from
any such defaults.
 
    
    Our borrowers are exposed to various risks associated with owning real estate, and
expected and unexpected costs or liabilities, including costs of holding such real estate,
could reduce the likelihood that our borrowers will be able to develop or sell the real
estate, which could increase the likelihood that our borrowers will default on the loans or
may require us to advance additional amounts to preserve and protect our interest in the
related assets.
 
    
    Real estate assets acquired in foreclosure or through other means are generally
non-earning assets that reduce the distributable yield to investors, if any. Moreover, the
ultimate disposition and liquidation of such assets may not occur for an extended period of
time, which would adversely affect our liquidity.
  26




---



##### Table of Contents




    
    We rely exclusively on our Manager to manage our investments and conduct our operations.
Our Members have no right to participate in decisions relating to the activities of our
Manager or, in general, the Fund.
 
    
    We are obligated to pay certain fees to our Manager, which may materially and adversely
impact our operating results and reduce cash available for other purposes.
 
    
    Our Manager faces conflicts of interest, including, without limitation, competing
demands upon its time and its involvement with other activities, all of which could have a
material adverse effect on us.
 
    
    As a publicly reporting company, we are required to divert considerable resources to new
compliance initiatives, including refining, maintaining, testing and reporting on our
disclosure controls and procedures and internal control over financial reporting, as well
as compliance with accounting and reporting initiatives relating to valuation of our
assets.
 
    
    The suspension of the Fund activities may persist for an extended period of time, and
the Fund may not resume historical activities at all.
 
    
    There are material income tax and retirement plan risks associated with ownership of our
units.
 
    
    There is a risk that we may modify and refinance existing loans which currently have
interest rate floors to loans with lower rates which could reduce mortgage income.
   27




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##### Table of Contents



Overview of the Business
  Recent Events and Response
       28




---



##### Table of Contents



Insure that the Fund maintains sufficient cash to cover all construction obligations.
 Retain sufficient cash reserves in the Fund to complete improvements to portfolio assets
and take appropriate actions to preserve and enhance value.
 Resume periodic distributions and the return of investor capital.
  
    
    suspend accepting any additional capital contributions;
 
    
    suspend reinvesting monthly distributions, if any, and cause all future
monthly distributions, if any, to be paid in cash;
 
    
    cancel all pending redemption requests, and suspend the acceptance of any
new redemption requests;
 
    
    suspend accepting any new loan requests (excluding financing of new loans
in connection
with the sale of collateral under existing loans or the sale of real estate owned); and
 
    
    effective May 2009, the Fund suspended monthly distributions to Members.
  29




---



##### Table of Contents



30




---



##### Table of Contents



Going Concern
   
    
    Implemented a comprehensive cost reduction program, including a reduction
in staff. The reduction in staff affected nearly 60% of the Managers employees while
preserving core functionality in all operational areas. The Manager has stabilized
monthly operating costs at approximately $400 per month.
 
    
    On-going collaboration with investment banking firms to close financing
and capital raise alternatives that are in process.
  31




---



##### Table of Contents




    
    Continued to explore mechanisms through which the Manager can continue to
participate in the capital markets, including, without limitation, the use of
additional funding vehicles to
capitalize on what the Manager believes are a multitude of opportunities arising from
the disruptions in the capital and credit markets.
 
    
    Is engaged in on-going negotiations with creditors to defer or otherwise
restructure existing liabilities of the Manager.
 
    
    Considered other initiatives, as they arise, to insure the continued
viability of the Manager as an operating entity.
   32




---



##### Table of Contents



Selected Financial Data
  (Unaudited)
    
    
    (Unaudited)
    
    
    As of and forAs of and for the Six
    
    
    As of and for the Three
    
    
    the Year EndedMonths Ended June 30,
    
    
    Months Ended June 30,
    
    
    December 31,2009
    
    
    2008
    
    
    2009
    
    
    2008
    
    
    2008Cash and cash equivalents
    
    $
    3,480
    
    
    $
    108,060
    
    
    $
    3,480
    
    
    $
    108,060
    
    
    $
    23,815Total assets
    
    $
    418,654
    
    
    $
    711,400
    
    
    $
    418,654
    
    
    $
    711,400
    
    
    $
    414,804Interest income and fees
    
    $
    17,595
    
    
    $
    33,672
    
    
    $
    5,621
    
    
    $
    17,067
    
    
    $
    67,420Management fees
    
    $
    419
    
    
    $
    519
    
    
    $
    170
    
    
    $
    272
    
    
    $
    1,139Interest expense
    
    $
    103
    
    
    $
    78
    
    
    $
    103
    
    
    $
    49
    
    
    $
    78Net earnings (loss)
    
    $
    14,217
    
    
    $
    32,923
    
    
    $
    3,140
    
    
    $
    16,689
    
    
    $
    (258,287
    )Net distributions to Members
    
    $
    11,706
    
    
    $
    32,536
    
    
    $
    2,015
    
    
    $
    16,532
    
    
    $
    64,051Net Member distributions as a % of net earnings
    
    
    82.3
    %
    
    
    98.8
    %
    
    
    64.2
    %
    
    
    99.1
    %
    
    
    (24.8
    %)Net earnings (loss) allocated to Members per weighted
average membership units outstanding
    
    $
    194.64
    
    
    $
    522.98
    
    
    $
    43.00
    
    
    $
    255.09
    
    
    $
    (3,835.96
    )Net distributions to Members per weighted average
membership units
    
    $
    160.27
    
    
    $
    516.83
    
    
    $
    27.60
    
    
    $
    252.69
    
    
    $
    951.27Average annualized yield to Members
    
    
    3.23
    %
    
    
    10.29
    %
    
    
    1.11
    %
    
    
    10.02
    %
    
    
    9.45
    %Member Equity Related:Retained earnings (Accumulated deficit)
    
    $
    (319,821
    )
    
    $
    405
    
    
    $
    (319,821
    )
    
    $
    405
    
    
    $
    (322,332
    )Total Members equity
    
    $
    410,562
    
    
    $
    677,230
    
    
    $
    410,562
    
    
    $
    677,230
    
    
    $
    408,051Number of Member accounts
    
    
    4,735
    
    
    
    4,335
    
    
    
    4,735
    
    
    
    4,335
    
    
    
    4,735Average Member account balance
    
    $
    87
    
    
    $
    156
    
    
    $
    87
    
    
    $
    156
    
    
    $
    86States in which the Fund has Members
    
    
    49
    
    
    
    49
    
    
    
    49
    
    
    
    49
    
    
    
    49Member investments (excluding reinvestments)
    
    $
    
    
    
    $
    166,871
    
    
    $
    
    
    
    $
    90,715
    
    
    $
    250,871Distributions to Members
    
    $
    11,706
    
    
    $
    15,472
    
    
    $
    2,016
    
    
    $
    7,889
    
    
    $
    40,860Member distributions reinvested
    
    $
    
    
    
    $
    17,064
    
    
    $
    
    
    
    $
    8,643
    
    
    $
    23,191Retained earnings additions (distributed)
    
    $
    2,511
    
    
    $
    387
    
    
    $
    1,124
    
    
    $
    157
    
    
    $
    (322,338
    )% of total distributions reinvested
    
    
    N/A
    
    
    
    51.83
    %
    
    
    N/A
    
    
    
    51.79
    %
    
    
    36.21
    %Redemptions
    
    $
    
    
    
    $
    83,894
    
    
    $
    
    
    
    $
    41,458
    
    
    $
    120,506Redemptions as % of new investment (incl. reinvestments)
    
    
    N/A
    
    
    
    45.61
    %
    
    
    N/A
    
    
    
    41.73
    %
    
    
    43.97
    %Loan
Related:Note balances originated
    
    $
    392
    
    
    $
    235,268
    
    
    $
    
    
    
    $
    141,848
    
    
    $
    329,952Number of notes originated
    
    
    1
    
    
    
    11
    
    
    
    
    
    
    
    6
    
    
    
    23Average note balance originated
    
    $
    392
    
    
    $
    21,388
    
    
    $
    
    
    
    $
    23,641
    
    
    $
    14,346Net loan carrying values
    
    $
    324,561
    
    
    $
    547,785
    
    
    $
    324,561
    
    
    $
    547,785
    
    
    $
    313,544Number of loans outstanding
    
    
    60
    
    
    
    57
    
    
    
    60
    
    
    
    57
    
    
    
    62Average loan carrying value
    
    $
    5,409
    
    
    $
    9,610
    
    
    $
    5,409
    
    
    $
    9,610
    
    
    $
    5,057% of Portfolio Principal  Fixed interest rate
    
    
    45.1
    %
    
    
    35.7
    %
    
    
    45.1
    %
    
    
    35.7
    %
    
    
    31.3
    %Number of fixed rate loans
    
    
    25
    
    
    
    22
    
    
    
    25
    
    
    
    22
    
    
    
    22Weighted average interest rate  Fixed
    
    
    10.97
    %
    
    
    11.37
    %
    
    
    10.97
    %
    
    
    11.37
    %
    
    
    11.71
    %% of portfolio  Variable interest rate
    
    
    54.9
    %
    
    
    64.3
    %
    
    
    54.9
    %
    
    
    64.3
    %
    
    
    68.7
    %Number of variable rate loans
    
    
    35
    
    
    
    35
    
    
    
    35
    
    
    
    35
    
    
    
    40Weighted average interest rate  Variable
    
    
    12.65
    %
    
    
    12.36
    %
    
    
    12.65
    %
    
    
    12.36
    %
    
    
    12.39
    %Principal balance % by state:Arizona
    
    
    53.9
    %
    
    
    56.0
    %
    
    
    53.9
    %
    
    
    56.0
    %
    
    
    47.9
    %California
    
    
    17.5
    %
    
    
    26.6
    %
    
    
    17.5
    %
    
    
    26.6
    %
    
    
    28.9
    %New Mexico
    
    
    1.4
    %
    
    
    1.0
    %
    
    
    1.4
    %
    
    
    1.0
    %
    
    
    0.9
    %Texas
    
    
    15.5
    %
    
    
    3.1
    %
    
    
    15.5
    %
    
    
    3.1
    %
    
    
    9.1
    %Idaho
    
    
    3.7
    %
    
    
    9.0
    %
    
    
    3.7
    %
    
    
    9.0
    %
    
    
    8.1
    %Minnesota
    
    
    3.8
    %
    
    
    2.8
    %
    
    
    3.8
    %
    
    
    2.8
    %
    
    
    2.7
    %Nevada
    
    
    1.9
    %
    
    
    1.5
    %
    
    
    1.9
    %
    
    
    1.5
    %
    
    
    1.3
    %Utah
    
    
    2.3
    %
    
    
    
    
    
    
    2.3
    %
    
    
    
    
    
    
    1.1
    %Interest payments over 30 days delinquent
    
    $
    7,913
    
    
    $
    1,088
    
    
    $
    7,913
    
    
    $
    1,088
    
    
    $
    1,134Loans past scheduled maturity
    
    
    32
    
    
    
    12
    
    
    
    32
    
    
    
    12
    
    
    
    24Principal balance of loans past scheduled maturity
    
    $
    360,963
    
    
    $
    127,656
    
    
    $
    360,963
    
    
    $
    127,656
    
    
    $
    210,198Number of loans in non accrual status
    
    
    40
    
    
    
    6
    
    
    
    40
    
    
    
    6
    
    
    
    11Principal balance of loans in non accrual status
    
    $
    420,876
    
    
    $
    80,341
    
    
    $
    420,876
    
    
    $
    80,341
    
    
    $
    95,624Allowance for credit losses
    
    $
    282,910
    
    
    $
    1,900
    
    
    $
    282,910
    
    
    $
    1,900
    
    
    $
    300,310Allowance for credit losses as % of loan principal
outstanding
    
    
    46.6
    %
    
    
    0.3
    %
    
    
    46.6
    %
    
    
    0.3
    %
    
    
    48.9
    %
 *
    
    Where applicable, quarterly results are annualized to allow for compatability with annual
results.  33




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##### Table of Contents



Results of Operations for the Six and Three Months Ended June 30, 2009 and 2008
   Revenues
 Six Months Ended June 30,
    
    
    Three Months Ended June 30,Interest and Fee Income:
    
    2009
    
    
    2008
    
    
    $ Change
    
    
    % Change
    
    
    2009
    
    
    2008
    
    
    $ Change
    
    
    % ChangeMortgage Loans
    
    $
    17,559
    
    
    $
    32,350
    
    
    $
    (14,791
    )
    
    
    (45.7
    %)
    
    $
    5,621
    
    
    $
    16,525
    
    
    $
    (10,904
    )
    
    
    (66.0
    %)Investments and Money Market Accounts
    
    
    36
    
    
    
    1,322
    
    
    
    (1,286
    )
    
    
    (97.3
    %)
    
    
    
    
    
    
    542
    
    
    
    (542
    )
    
    
    (100.0
    %)Total Interest and Fee
Income
    
    $
    17,595
    
    
    $
    33,672
    
    
    $
    (16,077
    )
    
    
    (47.7
    %)
    
    $
    5,621
    
    
    $
    17,067
    
    
    $
    (11,446
    )
    
    
    (67.1
    %)
    34




---



##### Table of Contents



Expenses
 Six Months Ended June 30,
    
    
    Three Months Ended June 30,Expenses:
    
    2009
    
    
    2008
    
    
    $ Change
    
    
    % Change
    
    
    2009
    
    
    2008
    
    
    $ Change
    
    
    % ChangeManagement Fees
    
    $
    419
    
    
    $
    519
    
    
    $
    (100
    )
    
    
    (19.3
    %)
    
    $
    170
    
    
    $
    272
    
    
    $
    (102
    )
    
    
    (37.5
    %)Default Related Expenses
    
    
    328
    
    
    
    85
    
    
    
    243
    
    
    
    285.9
    %
    
    
    202
    
    
    
    31
    
    
    
    171
    
    
    
    551.6
    %Operating Expenses for Real
Estate Owned
    
    
    1,340
    
    
    
    
    
    
    
    1,340
    
    
    
    N/A
    
    
    
    1,126
    
    
    
    
    
    
    
    1,126
    
    
    
    N/AProfessional Fees
    
    
    1,188
    
    
    
    67
    
    
    
    1,121
    
    
    
    1,673.1
    %
    
    
    880
    
    
    
    26
    
    
    
    854
    
    
    
    3,284.6
    %Interest Expense:Borrowings from Fund Manager
    
    
    103
    
    
    
    
    
    
    
    103
    
    
    
    N/A
    
    
    
    103
    
    
    
    
    
    
    
    103
    
    
    
    N/ABorrowings on Note Payable
    
    
    
    
    
    
    78
    
    
    
    (78
    )
    
    
    (100.0
    %)
    
    
    
    
    
    
    49
    
    
    
    (49
    )
    
    
    (100.0
    %)Interest Expense
    
    
    103
    
    
    
    78
    
    
    
    25
    
    
    
    32.1
    %
    
    
    103
    
    
    
    49
    
    
    
    54
    
    
    
    110.2
    %Total Expenses
    
    $
    3,378
    
    
    $
    749
    
    
    $
    2,629
    
    
    
    351.0
    %
    
    $
    2,481
    
    
    $
    378
    
    
    $
    2,103
    
    
    
    556.3
    %
    35




---



##### Table of Contents



Net Earnings
 Six Months Ended June 30,
    
    
    Three Months Ended June 30,2009
    
    
    2008
    
    
    $ Change
    
    
    % Change
    
    
    2009
    
    
    2008
    
    
    $ Change
    
    
    % ChangeNet Earnings
    
    $
    14,217
    
    
    $
    32,923
    
    
    $
    (18,706
    )
    
    
    (56.8
    %)
    
    $
    3,140
    
    
    $
    16,689
    
    
    $
    (13,549
    )
    
    
    (81.2
    %)
   36




---



##### Table of Contents



Fund Manager Fund-Related Income and Expense
   Six months ended June 30,
    
    
    Three months ended June 30,Fund-related Expenses Paid by Manager:
    
    2009
    
    
    2008
    
    
    2009
    
    
    2008Operations-related expenses
    
    $
    2,595
    
    
    $
    6,932
    
    
    $
    1,023
    
    
    $
    4,041Origination-related expenses
    
    $
    1,472
    
    
    $
    3,933
    
    
    $
    580
    
    
    
    2,293Total
    
    $
    4,067
    
    
    $
    10,865
    
    
    $
    1,603
    
    
    $
    6,334
  Changes in the Loan Portfolio Profile
  Average Loan Size
   37




---



##### Table of Contents



Geographic Diversification
  June 30, 2009
    
    
    December 31, 2008Outstanding
    
    
    Allowance for
    
    
    Net Carrying
    
    
    
    
    
    
    
    
    
    
    Outstanding
    
    
    Allowance for
    
    
    Net CarryingPrincipal
    
    
    Credit Loss
    
    
    Amount
    
    
    Percent
    
    
    #
    
    
    Principal
    
    
    Credit Loss
    
    
    Amount
    
    
    Percent
    
    
    #Arizona
    
    $
    287,462
    
    
    $
    (112,451
    )
    
    $
    175,011
    
    
    
    53.9
    %
    
    
    29
    
    
    $
    294,362
    
    
    $
    (128,499
    )
    
    $
    165,863
    
    
    
    52.9
    %
    
    
    31California
    
    
    180,570
    
    
    
    (123,877
    )
    
    
    56,693
    
    
    
    17.5
    %
    
    
    20
    
    
    
    177,255
    
    
    
    (124,422
    )
    
    
    52,833
    
    
    
    16.9
    %
    
    
    20New Mexico
    
    
    5,240
    
    
    
    (667
    )
    
    
    4,573
    
    
    
    1.4
    %
    
    
    2
    
    
    
    5,240
    
    
    
    (637
    )
    
    
    4,603
    
    
    
    1.5
    %
    
    
    2Texas
    
    
    56,257
    
    
    
    (5,872
    )
    
    
    50,385
    
    
    
    15.5
    %
    
    
    4
    
    
    
    55,825
    
    
    
    (5,781
    )
    
    
    50,044
    
    
    
    16.0
    %
    
    
    4Idaho
    
    
    49,580
    
    
    
    (37,530
    )
    
    
    12,050
    
    
    
    3.7
    %
    
    
    2
    
    
    
    49,578
    
    
    
    (38,458
    )
    
    
    11,120
    
    
    
    3.5
    %
    
    
    2Minnesota
    
    
    12,453
    
    
    
    
    
    
    
    12,453
    
    
    
    3.8
    %
    
    
    1
    
    
    
    16,590
    
    
    
    
    
    
    
    16,590
    
    
    
    5.3
    %
    
    
    1Nevada
    
    
    7,969
    
    
    
    (1,876
    )
    
    
    6,093
    
    
    
    1.9
    %
    
    
    1
    
    
    
    7,969
    
    
    
    (1,876
    )
    
    
    6,093
    
    
    
    1.9
    %
    
    
    1Utah
    
    
    7,940
    
    
    
    (637
    )
    
    
    7,303
    
    
    
    2.3
    %
    
    
    1
    
    
    
    7,035
    
    
    
    (637
    )
    
    
    6,398
    
    
    
    2.0
    %
    
    
    1Total
    
    $
    607,471
    
    
    $
    (282,910
    )
    
    $
    324,561
    
    
    
    100.0
    %
    
    
    60
    
    
    $
    613,854
    
    
    $
    (300,310
    )
    
    $
    313,544
    
    
    
    100.0
    %
    
    
    62
  Interest Rate Information
     38




---



##### Table of Contents



June 30, 2009Fixed Rate
    
    
    Variable Rate
    
    
    TotalOutstanding
    
    
    
    
    
    
    Outstanding
    
    
    
    
    
    
    Outstanding
    
    
    Allowance for
    
    
    Net CarryingCurrent Rate:
    
    #
    
    
    Principal
    
    
    #
    
    
    Principal
    
    
    #
    
    
    Principal
    
    
    Credit Loss
    
    
    Amount
    
    
    %6.00%
    
    
    
    1
    
    
    $
    5,890
    
    
    
    
    
    
    $
    
    
    
    
    1
    
    
    $
    5,890
    
    
    $
    
    
    
    $
    5,890
    
    
    
    1.8
    %8.00%
    
    
    
    2
    
    
    
    3,892
    
    
    
    
    
    
    
    
    
    
    
    2
    
    
    
    3,892
    
    
    
    
    
    
    
    3,892
    
    
    
    1.2
    %8.25%
    
    
    
    1
    
    
    
    55,145
    
    
    
    
    
    
    
    
    
    
    
    1
    
    
    
    55,145
    
    
    
    
    
    
    
    55,145
    
    
    
    17.0
    %9.00%
    
    
    
    1
    
    
    
    1,589
    
    
    
    
    
    
    
    
    
    
    
    1
    
    
    
    1,589
    
    
    
    (783
    )
    
    
    806
    
    
    
    0.2
    %10.00%
    
    
    
    3
    
    
    
    27,886
    
    
    
    
    
    
    
    
    
    
    
    3
    
    
    
    27,886
    
    
    
    (22,809
    )
    
    
    5,077
    
    
    
    1.6
    %11.00%
    
    
    
    
    
    
    
    
    
    
    
    1
    
    
    
    1,982
    
    
    
    1
    
    
    
    1,982
    
    
    
    
    
    
    
    1,982
    
    
    
    0.6
    %11.50%
    
    
    
    2
    
    
    
    2,572
    
    
    
    5
    
    
    
    56,483
    
    
    
    7
    
    
    
    59,055
    
    
    
    (6,813
    )
    
    
    52,242
    
    
    
    16.2
    %11.75%
    
    
    
    1
    
    
    
    5,597
    
    
    
    
    
    
    
    
    
    
    
    1
    
    
    
    5,597
    
    
    
    
    
    
    
    5,597
    
    
    
    1.7
    %12.00%
    
    
    
    9
    
    
    
    102,554
    
    
    
    9
    
    
    
    65,403
    
    
    
    18
    
    
    
    167,957
    
    
    
    (58,191
    )
    
    
    109,766
    
    
    
    33.9
    %12.25%
    
    
    
    
    
    
    
    
    
    
    
    2
    
    
    
    56,495
    
    
    
    2
    
    
    
    56,495
    
    
    
    (51,692
    )
    
    
    4,803
    
    
    
    1.5
    %12.50%
    
    
    
    1
    
    
    
    1,454
    
    
    
    6
    
    
    
    22,441
    
    
    
    7
    
    
    
    23,895
    
    
    
    (18,012
    )
    
    
    5,883
    
    
    
    1.8
    %12.75%
    
    
    
    1
    
    
    
    37,958
    
    
    
    
    
    
    
    
    
    
    
    1
    
    
    
    37,958
    
    
    
    (24,894
    )
    
    
    13,064
    
    
    
    4.0
    %13.00%
    
    
    
    3
    
    
    
    29,537
    
    
    
    9
    
    
    
    54,947
    
    
    
    12
    
    
    
    84,484
    
    
    
    (64,935
    )
    
    
    19,549
    
    
    
    6.0
    %13.75%
    
    
    
    
    
    
    
    
    
    
    
    2
    
    
    
    6,528
    
    
    
    2
    
    
    
    6,528
    
    
    
    (3,781
    )
    
    
    2,747
    
    
    
    0.8
    %14.25%
    
    
    
    
    
    
    
    
    
    
    
    1
    
    
    
    69,118
    
    
    
    1
    
    
    
    69,118
    
    
    
    (31,000
    )
    
    
    38,118
    
    
    
    11.7
    %Total
    
    
    
    25
    
    
    $
    274,074
    
    
    
    35
    
    
    $
    333,397
    
    
    
    60
    
    
    $
    607,471
    
    
    $
    (282,910
    )
    
    $
    324,561
    
    
    
    100.0
    %% of Portfolio
    
    
    
    
    
    
    45.1
    %
    
    
    
    
    
    
    54.9
    %
    
    
    
    
    
    
    100.0
    %Weighted Average Rate
    
    
    
    
    
    
    10.97
    %
    
    
    
    
    
    
    12.65
    %
    
    
    
    
    
    
    11.89
    %Number of Loans
    
    
    
    
    
    
    25
    
    
    
    
    
    
    
    35
    
    
    
    
    
    
    
    60Average Principal
    
    
    
    
    
    $
    10,963
    
    
    
    
    
    
    $
    9,526
    
    
    
    
    
    
    $
    10,125
 December 31, 2008Fixed Rate
    
    
    Variable Rate
    
    
    TotalOutstanding
    
    
    
    
    
    
    Outstanding
    
    
    
    
    
    
    Outstanding
    
    
    Allowance for
    
    
    Net CarryingCurrent Rate:
    
    #
    
    
    Principal
    
    
    #
    
    
    Principal
    
    
    #
    
    
    Principal
    
    
    Credit Loss
    
    
    Amount
    
    
    %8.00%
    
    
    
    1
    
    
    $
    3,500
    
    
    
    
    
    
    $
    
    
    
    
    1
    
    
    $
    3,500
    
    
    $
    
    
    
    $
    3,500
    
    
    
    1.1
    %9.00%
    
    
    
    1
    
    
    
    10,461
    
    
    
    1
    
    
    
    1,622
    
    
    
    2
    
    
    
    12,083
    
    
    
    (10,175
    )
    
    
    1,908
    
    
    
    0.6
    %10.00%
    
    
    
    1
    
    
    
    26,709
    
    
    
    
    
    
    
    
    
    
    
    1
    
    
    
    26,709
    
    
    
    (23,226
    )
    
    
    3,483
    
    
    
    1.1
    %11.00%
    
    
    
    
    
    
    
    
    
    
    
    1
    
    
    
    1,981
    
    
    
    1
    
    
    
    1,981
    
    
    
    
    
    
    
    1,981
    
    
    
    0.6
    %11.25%
    
    
    
    
    
    
    
    
    
    
    
    1
    
    
    
    46,020
    
    
    
    1
    
    
    
    46,020
    
    
    
    
    
    
    
    46,020
    
    
    
    14.7
    %11.50%
    
    
    
    2
    
    
    
    2,651
    
    
    
    6
    
    
    
    94,283
    
    
    
    8
    
    
    
    96,934
    
    
    
    (15,928
    )
    
    
    81,006
    
    
    
    25.8
    %11.75%
    
    
    
    1
    
    
    
    4,752
    
    
    
    
    
    
    
    
    
    
    
    1
    
    
    
    4,752
    
    
    
    
    
    
    
    4,752
    
    
    
    1.5
    %12.00%
    
    
    
    10
    
    
    
    75,758
    
    
    
    9
    
    
    
    67,683
    
    
    
    19
    
    
    
    143,441
    
    
    
    (54,499
    )
    
    
    88,942
    
    
    
    28.4
    %12.25%
    
    
    
    1
    
    
    
    631
    
    
    
    3
    
    
    
    55,850
    
    
    
    4
    
    
    
    56,481
    
    
    
    (52,775
    )
    
    
    3,706
    
    
    
    1.2
    %12.50%
    
    
    
    1
    
    
    
    1,929
    
    
    
    6
    
    
    
    22,227
    
    
    
    7
    
    
    
    24,156
    
    
    
    (18,026
    )
    
    
    6,130
    
    
    
    2.0
    %12.75%
    
    
    
    1
    
    
    
    37,935
    
    
    
    
    
    
    
    
    
    
    
    1
    
    
    
    37,935
    
    
    
    (25,394
    )
    
    
    12,541
    
    
    
    4.0
    %13.00%
    
    
    
    3
    
    
    
    27,897
    
    
    
    9
    
    
    
    54,947
    
    
    
    12
    
    
    
    82,844
    
    
    
    (64,831
    )
    
    
    18,013
    
    
    
    5.7
    %13.25%
    
    
    
    
    
    
    
    
    
    
    
    1
    
    
    
    2,821
    
    
    
    1
    
    
    
    2,821
    
    
    
    (1,675
    )
    
    
    1,146
    
    
    
    0.4
    %13.75%
    
    
    
    
    
    
    
    
    
    
    
    2
    
    
    
    6,528
    
    
    
    2
    
    
    
    6,528
    
    
    
    (3,781
    )
    
    
    2,747
    
    
    
    0.9
    %14.25%
    
    
    
    
    
    
    
    
    
    
    
    1
    
    
    
    67,669
    
    
    
    1
    
    
    
    67,669
    
    
    
    (30,000
    )
    
    
    37,669
    
    
    
    12.0
    %Total
    
    
    22
    
    
    $
    192,223
    
    
    
    40
    
    
    $
    421,631
    
    
    
    62
    
    
    $
    613,854
    
    
    $
    (300,310
    )
    
    $
    313,544
    
    
    
    100.0
    %% of Portfolio
    
    
    
    
    
    
    31.3
    %
    
    
    
    
    
    
    68.7
    %
    
    
    
    
    
    
    100.0
    %Weighted Average Rate
    
    
    
    
    
    
    11.71
    %
    
    
    
    
    
    
    12.39
    %
    
    
    
    
    
    
    12.18
    %Number of Loans
    
    
    
    
    
    
    22
    
    
    
    
    
    
    
    40
    
    
    
    
    
    
    
    62Average Principal
    
    
    
    
    
    $
    8,737
    
    
    
    
    
    
    $
    10,541
    
    
    
    
    
    
    $
    9,901
  39




---



##### Table of Contents



Concentration by Category based on Collaterals Development Status
  June 30, 2009
    
    
    December 31, 2008Amount
    
    
    %
    
    
    #
    
    
    Amount
    
    
    %
    
    
    #Pre-entitled Land:Held for Investment
    
    $
    7,178
    
    
    
    1.2
    %
    
    
    2
    
    
    $
    7,178
    
    
    
    1.2
    %
    
    
    2Processing Entitlements
    
    
    194,418
    
    
    
    32.0
    %
    
    
    11
    
    
    
    200,902
    
    
    
    32.8
    %
    
    
    12201,596
    
    
    
    33.2
    %
    
    
    13
    
    
    
    208,080
    
    
    
    34.0
    %
    
    
    14Entitled Land:Held for Investment
    
    
    112,104
    
    
    
    18.5
    %
    
    
    17
    
    
    
    114,307
    
    
    
    18.6
    %
    
    
    17Infrastructure under Construction
    
    
    60,080
    
    
    
    9.9
    %
    
    
    4
    
    
    
    57,908
    
    
    
    9.4
    %
    
    
    4Improved and Held for Vertical
Construction
    
    
    46,088
    
    
    
    7.6
    %
    
    
    4
    
    
    
    54,486
    
    
    
    8.9
    %
    
    
    5218,272
    
    
    
    36.0
    %
    
    
    25
    
    
    
    226,701
    
    
    
    36.9
    %
    
    
    26Construction & Existing Structures:New Structure  Construction in-process
    
    
    41,474
    
    
    
    6.8
    %
    
    
    14
    
    
    
    43,814
    
    
    
    7.1
    %
    
    
    14Existing Structure Held for Investment
    
    
    37,890
    
    
    
    6.2
    %
    
    
    5
    
    
    
    37,482
    
    
    
    6.1
    %
    
    
    5Existing Structure  Improvements
    
    
    108,239
    
    
    
    17.8
    %
    
    
    3
    
    
    
    97,777
    
    
    
    15.9
    %
    
    
    3187,603
    
    
    
    30.8
    %
    
    
    22
    
    
    
    179,073
    
    
    
    29.1
    %
    
    
    22Total
    
    
    607,471
    
    
    
    100.0
    %
    
    
    60
    
    
    
    613,854
    
    
    
    100.0
    %
    
    
    62Less: Allowance for Credit Loss
    
    
    (282,910
    )
    
    
    
    
    
    
    
    
    
    
    (300,310
    )Net Carrying Value
    
    $
    324,561
    
    
    
    
    
    
    
    
    
    
    $
    313,544
  June 30, 2009
    
    
    December 31, 2008Amount
    
    
    %
    
    
    #
    
    
    Amount
    
    
    %
    
    
    #Residential
    
    $
    265,774
    
    
    
    43.8
    %
    
    
    36
    
    
    $
    278,644
    
    
    
    45.4
    %
    
    
    37Mixed Use
    
    
    203,953
    
    
    
    33.6
    %
    
    
    10
    
    
    
    206,691
    
    
    
    33.7
    %
    
    
    11Commercial
    
    
    136,674
    
    
    
    22.5
    %
    
    
    13
    
    
    
    127,449
    
    
    
    20.8
    %
    
    
    13Industrial
    
    
    1,070
    
    
    
    0.1
    %
    
    
    1
    
    
    
    1,070
    
    
    
    0.1
    %
    
    
    1Total
    
    
    607,471
    
    
    
    100.0
    %
    
    
    60
    
    
    
    613,854
    
    
    
    100.0
    %
    
    
    62Less: Allowance for
Credit Loss
    
    
    (282,910
    )
    
    
    
    
    
    
    
    
    
    
    (300,310
    )Net Carrying Value
    
    $
    324,561
    
    
    
    
    
    
    
    
    
    
    $
    313,544
    40




---



##### Table of Contents



Borrower and Borrower Groups
  Changes in the Portfolio Profile  Scheduled Maturities
  June 30, 2009Quarter
    
    Amount
    
    
    Percent
    
    
    #Matured
    
    $
    360,963
    
    
    59.4%
    
    
    
    32Q3 2009
    
    
    78,512
    
    
    12.9%
    
    
    
    10Q4 2009
    
    
    11,796
    
    
    1.9%
    
    
    
    2Q1 2010
    
    
    976
    
    
    0.2%
    
    
    
    2Q2 2010
    
    
    94,931
    
    
    15.6%
    
    
    
    2Q3 2010
    
    
    56,401
    
    
    9.3%
    
    
    
    10Q1 2011
    
    
    3,500
    
    
    0.6%
    
    
    
    1Q1 2012
    
    
    392
    
    
    0.1%
    
    
    
    1Total
    
    
    607,471
    
    
    100.0%
    
    
    
    60Less: Allowance
for Credit Loss
    
    
    (282,910
    )Net Carrying Value
    
    $
    324,561
  Real Estate Held for Development or Sale
    41




---



##### Table of Contents



# of
    
    
    Aggregate NetState
    
    Projects
    
    
    Book ValueCalifornia
    
    
    3
    
    
    
    $
    14,104Texas
    
    
    2
    
    
    
    
    14,315Arizona
    
    
    7
    
    
    
    
    37,108Minnesota
    
    
    1
    
    
    
    
    4,241Total
    
    
    13
    
    
    
    $
    69,768
    42




---



##### Table of Contents



Important Relationships Between Capital Resources and Results of Operations
 Loan Loss Reserve
  Mortgage Loans, Participations and Loan Sales
    43




---



##### Table of Contents



Distributions to Members
  Annualized Rate of Return to Members on Distributions
  Redemptions
  Prospective Trends
 Loan Demand, Selection and Quality
   44




---



##### Table of Contents



Summary of Existing Loans in Default
     Percent of
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Non-AccruedOutstanding
    
    
    
    
    
    
    Outstanding
    
    
    Allowance for
    
    
    Net Carrying
    
    
    Accrued
    
    
    NotePrincipal
    
    
    #
    
    
    Principal
    
    
    Credit Loss
    
    
    Amount
    
    
    Interest
    
    
    Interest
    
    
    TotalArizona
    
    
    41.9
    %
    
    
    20
    
    
    $
    217,415
    
    
    $
    (110,357
    )
    
    $
    107,058
    
    
    $
    3,949
    
    
    $
    4,337
    
    
    $
    115,344Idaho
    
    
    9.5
    %
    
    
    2
    
    
    
    49,580
    
    
    
    (37,530
    )
    
    
    12,050
    
    
    
    1,948
    
    
    
    2,988
    
    
    
    16,986California
    
    
    32.9
    %
    
    
    17
    
    
    
    170,988
    
    
    
    (123,877
    )
    
    
    47,111
    
    
    
    4,021
    
    
    
    7,351
    
    
    
    58,483Minnesota
    
    
    2.4
    %
    
    
    1
    
    
    
    12,453
    
    
    
    
    
    
    
    12,453
    
    
    
    495
    
    
    
    754
    
    
    
    13,702Texas
    
    
    10.8
    %
    
    
    4
    
    
    
    56,257
    
    
    
    (5,872
    )
    
    
    50,385
    
    
    
    1,558
    
    
    
    529
    
    
    
    52,472Nevada
    
    
    1.5
    %
    
    
    1
    
    
    
    7,969
    
    
    
    (1,876
    )
    
    
    6,093
    
    
    
    319
    
    
    
    474
    
    
    
    6,886New Mexico
    
    
    1.0
    %
    
    
    2
    
    
    
    5,240
    
    
    
    (667
    )
    
    
    4,573
    
    
    
    43
    
    
    
    280
    
    
    
    4,896100.0
    %
    
    
    47
    
    
    $
    519,902
    
    
    $
    (280,179
    )
    
    $
    239,723
    
    
    $
    12,333
    
    
    $
    16,713
    
    
    $
    268,769
    45




---



##### Table of Contents



Loan Portfolio Valuation Analysis
  
    
    Estimated net realizable value of any underlying collateral in relation to the
outstanding mortgage balance, including accrued interest and related costs;
 
    
    Recency and reliability of valuation;
 
    
    The financial condition of the borrower and any adverse factors that may affect its
ability to pay;
 
    
    Prevailing economic conditions;
 
    
    Historical experience by market and in general; and
 
    
    Evaluation of industry trends.
     46




---



##### Table of Contents



Level 1 
    
    Valuations based on unadjusted quoted prices in active markets for identical
assets or liabilities that we have the ability to access at the measurement date;
 Level 2 
    
    Valuations based on quoted market prices for similar instruments in active
markets, quoted prices for identical or similar instruments in markets that are not active
or models for which all significant inputs are observable in the market either directly or
indirectly; and
 Level 3 
    
    Valuations based on models that use inputs that are unobservable in the market and
significant to the fair value measurement.
       47




---



##### Table of Contents



2009Balance at beginning of period
    
    $
    300,310Valuation charge for current fair value
    
    
    Transferred to other accounts
    
    
    (17,400
    )Balance at end of period
    
    $
    282,910
 Trends in Interest Income and Effective Portfolio Yield
   48




---



##### Table of Contents



Interest Earning Assets Deployment Ratio
   
    
    pending fundings of loans that have completed the underwriting process;
 
    
    anticipated loan fundings;
 
    
    average size of loans in the underwriting process;
 
    
    expected loan reductions or payoffs;
 
    
    pending Member redemptions;
 
    
    direct expenses, and
 
    
    other anticipated liquidity needs.
  Leverage to Enhance Portfolio Yields
   49




---



##### Table of Contents



Off-Balance Sheet Arrangements
  Contractual Obligations
  Liquidity and Capital Resources
   Requirements for Liquidity
 Loan Fundings
   50




---



##### Table of Contents



June 30, 2009
    
    
    December 31, 2008Loans Held
    
    
    Loans Held
    
    
    
    
    
    
    Loans Held
    
    
    Loans Heldto Maturity
    
    
    for Sale
    
    
    Total
    
    
    to Maturity
    
    
    for Sale
    
    
    TotalUndispersed
Loans-in-process per Note Agreement
    
    $
    52,798
    
    
    $
    23,488
    
    
    $
    76,286
    
    
    $
    66,035
    
    
    $
    32,633
    
    
    $
    98,668Less: amounts not to be
funded
    
    
    (48,937
    )
    
    
    (21,038
    )
    
    
    (69,975
    )
    
    
    (39,461
    )
    
    
    (13,767
    )
    
    
    (53,228
    )Undispersed Loans-in-process perFinancial Statements
    
    $
    3,861
    
    
    $
    2,450
    
    
    $
    6,311
    
    
    $
    26,574
    
    
    $
    18,866
    
    
    $
    45,440
   Maintenance and Development Costs for Real Estate Owned
   51




---



##### Table of Contents



Sources of Liquidity
 Loan Payments
   Disposition of Real Estate Owned
  Supplemental Liquidity
  Cash Flows
   52




---



##### Table of Contents



Critical Accounting Policies
  Recent Accounting Pronouncements
  
 Item 3.
    
    Quantitative and Qualitative Disclosures about Market Risk.
    53




---



##### Table of Contents



June 30, 2009 Portfolio InformationFixed Rate
    
    
    Variable Rate
    
    
    TotalOutstanding Balance
    
    $
    274,074
    
    
    $
    333,397
    
    
    $
    607,471Current Weighted Average Yield
    
    
    10.97
    %
    
    
    12.65
    %
    
    
    11.89
    %Annualized Interest Income
    
    $
    30,072
    
    
    $
    42,178
    
    
    $
    72,250
  54




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##### Table of Contents



Change in Annual Interest Income
    
    
    Pro-forma
    
    
    ChangeFixed Rate
    
    
    Variable Rate
    
    
    Total
    
    
    Yield
    
    
    In YieldIncrease in Prime Rate:0.5% or 50 basis points
    
    $
    
    
    
    $
    307
    
    
    $
    307
    
    
    
    11.94
    %
    
    
    0.05
    %1.0% or 100 basis points
    
    $
    
    
    
    $
    614
    
    
    $
    614
    
    
    
    11.99
    %
    
    
    0.10
    %2.0% or 200 basis points
    
    $
    
    
    
    $
    1,229
    
    
    $
    1,229
    
    
    
    12.10
    %
    
    
    0.20
    %Decrease in Prime Rate:0.5% or 50 basis points
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    
    11.89
    %
    
    
    0.00
    %1.0% or 100 basis points
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    
    11.89
    %
    
    
    0.00
    %2.0% or 200 basis points
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    
    11.89
    %
    
    
    0.00
    %
  Loan Rates:
    
    Matured
    
    
    Q3 2009
    
    
    Q4 2009
    
    
    Q1 2010
    
    
    Q2 2010
    
    
    Q3 2010
    
    
    Q1 2011
    
    
    Q1 2012
    
    
    TotalVariable
    
    $
    224,888
    
    
    $
    47,362
    
    
    $
    6,200
    
    
    $
    
    
    
    $
    
    
    
    $
    54,947
    
    
    $
    
    
    
    $
    
    
    
    $
    333,397Fixed
    
    
    136,075
    
    
    
    31,150
    
    
    
    5,596
    
    
    
    976
    
    
    
    94,931
    
    
    
    1,454
    
    
    
    3,500
    
    
    
    392
    
    
    
    274,074$
    360,963
    
    
    $
    78,512
    
    
    $
    11,796
    
    
    $
    976
    
    
    $
    94,931
    
    
    $
    56,401
    
    
    $
    3,500
    
    
    $
    392
    
    
    $
    607,471Less: Allowance for Credit Loss
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (282,910
    )Net Carrying Value
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    $
    324,561
   55




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##### Table of Contents



Item 4T.
    
    Controls and Procedures.
 Controls and Procedures
   Changes to Internal Control over Financial Reporting
   
 PART II
 OTHER INFORMATION
 
 Item 1.
    
    Legal Proceedings.
    56




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##### Table of Contents



Item 1A.
    
    Risk Factors.
  Defaults on our mortgage loans will decrease our revenue and distributions.
    57




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##### Table of Contents



Our business is subject to regulation by several government agencies and a disciplinary or civil
action that occurs as a result of an actual or alleged violation of any rules or regulations to
which we are subject could have a material adverse effect on our business.
    We may refinance existing loans at rates lower than those currently recognized by the Fund.
  IMH, on behalf of the Fund, has taken various actions to manage the Fund through the recession, but
there can be no assurance that these or future actions will be successful, in part or at all, and a
failure of any one or more of these actions could have a material adverse effect on the Fund.
   58




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##### Table of Contents



Our Manager may, but is not required to, pay for the Funds expenses and the Fund could experience
a material adverse effect if it is required to pay such expenses.
  Any borrowing by us will increase risk and may reduce the amount we have available to distribute to
Members.
    59




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##### Table of Contents



Item 2.
    
    Unregistered Sales of Equity Securities and Use of Proceeds.
   60




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##### Table of Contents



Item 6.
    
    Exhibits.
 ExhibitNo.
    
    Description3.1
    
    
    IMH Secured Loan Fund, LLC Certificate of Formation
(incorporated by reference to Exhibit 3.1 of the Annual
Report on Form 10-K, File No. 000-52611, filed on March
31, 2008)4.1
    
    
    IMH Secured Loan Fund, LLC Restated Limited Liability
Company Operating Agreement (incorporated by reference to
Exhibit 4.1 of the Registration Statement on Form 10,
File No. 000-52611, filed by IMH Secured Loan Fund, LLC
on April 30, 2007)4.2
    
    
    Form Subscription Agreement (incorporated by reference to
Exhibit 4.2 of the Registration Statement on Form 10,
File No. 000-52611, filed by IMH Secured Loan Fund, LLC
on April 30, 2007)31.1
    *
    
    Certification of Chief Executive Officer of Investors
Mortgage Holdings, Inc., manager of IMH Secured Loan
Fund, LLC pursuant to Section 302 of the Sarbanes-Oxley
Act of 200231.2
    *
    
    Certification of Chief Financial Officer of Investors
Mortgage Holdings, Inc., manager of IMH Secured Loan
Fund, LLC pursuant to Section 302 of the Sarbanes-Oxley
Act of 200232.1
    *
    
    Certification of Chief Executive Officer and the Chief
Financial Officer of Investors Mortgage Holdings, Inc.,
manager of IMH Secured Loan Fund, LLC pursuant to Section
906 of the Sarbanes-Oxley Act of 2002
 *
    
    Filed herewith.
    
    This certification is being furnished solely to accompany this report pursuant to 18
U.S.C. Section 1350, and is not being filed for purposes of Section 18 of the Exchange Act,
and is not to be incorporated by reference into any filings of the Fund, whether made before
or after the date hereof, regardless of any general incorporation language in such filing.  61




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##### Table of Contents



SIGNATURES
  Date: August 14, 2009
    
    IMH SECURED LOAN FUND, LLCBy:
    
    Investors Mortgage Holdings, Inc.Its:
    
    ManagerBy:
    
    /s/ Steven Darak

Steven DarakChief Financial Officer(Principal Financial and Accounting Officer andDuly Authorized Officer)
 
  62




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##### Table of Contents



INDEX TO EXHIBITS
 ExhibitNo.
    
    Description3.1
    
    
    IMH Secured Loan Fund, LLC Certificate of Formation
(incorporated by reference to Exhibit 3.1 of the Annual
Report on Form 10-K, File No. 000-52611, filed on March
31, 2008)4.1
    
    
    IMH Secured Loan Fund, LLC Restated Limited Liability
Company Operating Agreement (incorporated by reference to
Exhibit 4.1 of the Registration Statement on Form 10,
File No. 000-52611, filed by IMH Secured Loan Fund, LLC
on April 30, 2007)4.2
    
    
    Form Subscription Agreement (incorporated by reference to
Exhibit 4.2 of the Registration Statement on Form 10,
File No. 000-52611, filed by IMH Secured Loan Fund, LLC
on April 30, 2007)31.1
    *
    
    Certification of Chief Executive Officer of Investors
Mortgage Holdings, Inc., manager of IMH Secured Loan
Fund, LLC pursuant to Section 302 of the Sarbanes-Oxley
Act of 200231.2
    *
    
    Certification of Chief Financial Officer of Investors
Mortgage Holdings, Inc., manager of IMH Secured Loan
Fund, LLC pursuant to Section 302 of the Sarbanes-Oxley
Act of 200232.1
    *
    
    Certification of Chief Executive Officer and the Chief
Financial Officer of Investors Mortgage Holdings, Inc.,
manager of IMH Secured Loan Fund, LLC pursuant to Section
906 of the Sarbanes-Oxley Act of 2002
 *
    
    Filed herewith.
    
    This certification is being furnished solely to accompany this report pursuant to 18
U.S.C. Section 1350, and is not being filed for purposes of Section 18 of the Exchange Act,
and is not to be incorporated by reference into any filings of the Fund, whether made before
or after the date hereof, regardless of any general incorporation language in such filing.  63