| x | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
|---|-----------------------------------------------------------------------------------------|

|  ̈ | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
|--------|------------------------------------------------------------------------------------------|

| Delaware(State or other jurisdiction of incorporation or organization) | 52-1449733(I.R.S. Employer Identification No.)       |
|------------------------------------------------------------------------|------------------------------------------------------|
|                                                                   |                                                 |
| 621 East Pratt Street, Suite 600                                       | (443) 263-2900                                       |
| Baltimore, Maryland                                                    | (Registrant's telephone number, including area code) |
| (Address of principal executive offices)                               |                                                 |
| 21202                                                                  |                                                 |
|  (Zip Code)                                                       |                                                 |

| Large accelerated filer o | Accelerated filer o              |
|---------------------------|----------------------------------|
|                      |                             |
| Non-accelerated filer o   | Smaller reporting company þ |

----

| CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS | 3                                                                                                    |
|-----------------------------------------------------------|------------------------------------------------------------------------------------------------------|
| PART I – FINANCIAL INFORMATION                      | 4                                                                                                    |
| Item 1.                                                   | Financial Statements                                                                                 | 4 |
|                                                      | (a) Consolidated Balance Sheets as of March 31, 2011 and December 31, 2010                           | 4 |
|                                                      | (b) Consolidated Statements of Operations for the three months ended March 31, 2011 and 2010         | 5 |
|                                                      | (c) Consolidated Statements of Comprehensive Loss for the three months ended March 31, 2011 and 2010 | 6 |
|                                                      | (d) Consolidated Statement of Equity for the three months ended March 31, 2011                       | 7 |
|                                                      | (e) Consolidated Statements of Cash Flows for the three months ended March 31, 2011 and 2010         | 8 |
|                                                      | (f) Notes to the Condensed Consolidated Financial Statements                                         | 10 |
| Item 2.                                                   | Management’s Discussion and Analysis of Financial Condition and Results of Operations          | 36 |
|                                                      | (a) Liquidity and Capital Resources                                                                  | 36 |
|                                                      | (b) Critical Accounting Policies and New Accounting Standards                                        | 41 |
|                                                      | (c) Results of Operations                                                                            | 42 |
| Item 3.                                                   | Quantitative and Qualitative Disclosures About Market Risk                                           | 47 |
| Item 4.                                                   | Controls and Procedures                                                                              | 48 |
| PART II – OTHER INFORMATION                         | 49                                                                                                   |
| Item 1.                                                   | Legal Proceedings                                                                                    | 49 |
|     Item 1A.   Risk Factors | 49                                                                                                   |
| Item 2.                                                   | Unregistered Sales and Equity Securities and Use of Proceeds                                         | 49 |
| Item 3.                                                   | Defaults Upon Senior Securities                                                                      | 49 |
| Item 4.                                                   | Removed and Reserved                                                                                 | 49 |
| Item 5.                                                   | Other Information                                                                                    | 49 |
| Item 6.                                                   | Exhibits                                                                                             | 49 |
| SIGNATURES                                                | S-1                                                                                                  |
| EXHIBIT INDEX                                             | E-1                                                                                                  |

----

----

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

|                                                                                                                                                                                                                                  |   | March 31,2011(Unaudited) |      |   | December 31,2010 |   |
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|-------------------------------|-----------|--------|-----------------------|--------|
| ASSETS                                                                                                                                                                                                                                |   |                          |      |   |                  |   |
| Cash and cash equivalents                                                                                                                                                                                                             |   | $                             | 34,026    |   |                  | $      | 32,544 |   |
| Restricted cash                                                                                                                                                                                                                       |   |                          | 25,850    |   |                  |   | 24,987 |   |
| Bonds available-for-sale (includes $1,172,932 and $1,197,180 pledged as collateral)                                                                                                                                                   |   |                          | 1,199,912 |   |                  |   | 1,231,036 |   |
| Loans held for investment, net of allowance for loan losses (includes $20,672 and $53,096 pledged as collateral)                                                                                                                      |   |                          | 21,458    |   |                  |   | 53,933 |   |
| Loans held for sale (includes $4,340 and $18,024 pledged as collateral)                                                                                                                                                               |   |                          | 5,284     |   |                  |   | 18,989 |   |
| Investment in preferred stock (includes $2,000 and $2,000 pledged as collateral)                                                                                                                                                      |   |                          | 36,371    |   |                  |   | 36,371 |   |
| Investments in unconsolidated ventures (includes $6,779 and $6,779 pledged as collateral)                                                                                                                                             |   |                          | 6,837     |   |                  |   | 6,842 |   |
| Derivative assets                                                                                                                                                                                                                     |   |                          | 6,088     |   |                  |   | 6,812 |   |
| Other assets (includes $13,155 and $12,527 pledged as collateral)                                                                                                                                                                     |   |                          | 42,038    |   |                  |   | 46,027 |   |
| Assets of consolidated funds and ventures:                                                                                                                                                                                            |   |                          |      |   |                  |   |   |   |
| Investments in Lower Tier Property Partnerships                                                                                                                                                                                       |   |                          | 424,311   |   |                  |   | 436,971 |   |
| Other assets                                                                                                                                                                                                                          |   |                          | 169,398   |   |                  |   | 165,024 |   |
| Total assets of consolidated funds and ventures                                                                                                                                                                                       |   |                          | 593,709   |   |                  |   | 601,995 |   |
| Total assets                                                                                                                                                                                                                          |   | $                             | 1,971,573 |   |                  | $      | 2,059,536 |   |
|                                                                                                                                                                                                                                  |   |                          |      |   |                  |   |   |   |
| LIABILITIES AND EQUITY                                                                                                                                                                                                                |   |                          |      |   |                  |   |   |   |
| Debt                                                                                                                                                                                                                                  |   | $                             | 1,210,055 |   |                  | $      | 1,277,415 |   |
| Guarantee obligations                                                                                                                                                                                                                 |   |                          | 7,248     |   |                  |   | 7,235 |   |
| Accounts payable and accrued expenses                                                                                                                                                                                                 |   |                          | 17,975    |   |                  |   | 18,890 |   |
| Derivative liabilities                                                                                                                                                                                                                |   |                          | 18,059    |   |                  |   | 20,153 |   |
| Deferred revenue                                                                                                                                                                                                                      |   |                          | 1,274     |   |                  |   | 1,290 |   |
| Other liabilities                                                                                                                                                                                                                     |   |                          | 6,762     |   |                  |   | 6,333 |   |
| Liabilities of consolidated funds and ventures:                                                                                                                                                                                       |   |                          |      |   |                  |   |   |   |
| Debt                                                                                                                                                                                                                                  |   |                          | 3,677     |   |                  |   | 3,709 |   |
| Unfunded equity commitments to Lower Tier Property Partnerships                                                                                                                                                                       |   |                          | 20,199    |   |                  |   | 20,970 |   |
| Other liabilities                                                                                                                                                                                                                     |   |                          | 3,055     |   |                  |   | 3,136 |   |
| Total liabilities of consolidated funds and ventures                                                                                                                                                                                  |   |                          | 26,931    |   |                  |   | 27,815 |   |
| Total liabilities                                                                                                                                                                                                                     |   | $                             | 1,288,304 |   |                  | $      | 1,359,131 |   |
|                                                                                                                                                                                                                                  |   |                          |      |   |                  |   |   |   |
| Commitments and contingencies                                                                                                                                                                                                         |   |                          |      |   |                  |   |   |   |
|                                                                                                                                                                                                                                  |   |                          |      |   |                  |   |   |   |
| Equity:                                                                                                                                                                                                                               |   |                          |      |   |                  |   |   |   |
| Perpetual preferred shareholders’ equity in a subsidiary company, liquidation  preference of $169,000 at March 31, 2011 and $173,000 at December 31, 2010                                                             |   | $                             | 164,803   |   |                  | $      | 168,686 |   |
| Noncontrolling interests in consolidated funds and ventures (net of $1,533 and $1,922 of subscriptions receivable)                                                                                                               |   |                          | 561,990   |   |                  |   | 569,556 |   |
| Common shareholders’ equity:                                                                                                                                                                                                    |   |                          |      |   |                  |   |   |   |
| Common shares, no par value (40,204,892 and 40,204,049 shares issued and outstanding and 862,558 and 647,782 non-employee directors’ and employee deferred shares issued at March 31, 2011 and December 31, 2010, respectively) |   |                          | (134,433  | )      |                  |   | (130,466 | ) |
| Accumulated other comprehensive income                                                                                                                                                                                                |   |                          | 90,909    |   |                  |   | 92,629 |   |
| Total common shareholders’ equity (deficit)                                                                                                                                                                                     |   |                          | (43,524   | )      |                  |   | (37,837 | ) |
| Total equity                                                                                                                                                                                                                          |   |                          | 683,269   |   |                  |   | 700,405 |   |
| Total liabilities and equity                                                                                                                                                                                                          |   | $                             | 1,971,573 |   |                  | $      | 2,059,536 |   |

----

|                                                                                      |   | For the three months ended March 31, |    |
|-------------------------------------------------------------------------------------------|--------|--------------------------------------------------------------------|---------|
|                                                                                      |   | 2011                                                               |    |   | 2010 |   |
| REVENUE                                                                                   |   |                                                               |    |   |   |   |
| Interest income:                                                                          |   |                                                               |    |   |   |   |
| Interest on bonds                                                                         |   | $                                                                  | 20,822  |   |   | $ | 21,120 |   |
| Interest on loans                                                                         |   |                                                               | 1,011   |   |   |   | 2,111 |   |
| Interest on short-term investments                                                        |   |                                                               | 30      |   |   |   | 33 |   |
| Total interest income                                                                     |   |                                                               | 21,863  |   |   |   | 23,264 |   |
|                                                                                      |   |                                                               |    |   |   |   |   |   |
| Fee and other income:                                                                     |   |                                                               |    |   |   |   |   |   |
| Syndication fees                                                                          |   |                                                               | 16      |   |   |   | 490 |   |
| Asset management and advisory fees                                                        |   |                                                               | 283     |   |   |   | 335 |   |
| Income on preferred stock investment                                                      |   |                                                               | 1,557   |   |   |   | 1,671 |   |
| Other income                                                                              |   |                                                               | 488     |   |   |   | 1,134 |   |
| Total fee and other income                                                                |   |                                                               | 2,344   |   |   |   | 3,630 |   |
|                                                                                      |   |                                                               |    |   |   |   |   |   |
| Revenue from consolidated funds and ventures                                              |   |                                                               | 560     |   |   |   | 591 |   |
| Total revenue                                                                             |   |                                                               | 24,767  |   |   |   | 27,485 |   |
|                                                                                      |   |                                                               |    |   |   |   |   |   |
| EXPENSES                                                                                  |   |                                                               |    |   |   |   |   |   |
| Interest expense                                                                          |   |                                                               | 15,098  |   |   |   | 18,077 |   |
| Salaries and benefits                                                                     |   |                                                               | 3,069   |   |   |   | 3,416 |   |
| General and administrative                                                                |   |                                                               | 1,353   |   |   |   | 2,619 |   |
| Professional fees                                                                         |   |                                                               | 3,181   |   |   |   | 3,711 |   |
| Impairment on bonds                                                                       |   |                                                               | 3,510   |   |   |   | 6,434 |   |
| Provision for loan losses                                                                 |   |                                                               | 565     |   |   |   | 3,467 |   |
| Other expenses                                                                            |   |                                                               | 802     |   |   |   | 2,182 |   |
| Expenses from consolidated funds and ventures                                             |   |                                                               | 5,339   |   |   |   | 5,114 |   |
| Total expenses                                                                            |   |                                                               | 32,917  |   |   |   | 45,020 |   |
|                                                                                      |   |                                                               |    |   |   |   |   |   |
| Net (losses) gains on sale of bonds                                                       |   |                                                               | (321    | ) |   |   | 366 |   |
| Net (losses) gains on loans                                                               |   |                                                               | (170    | ) |   |   | 3,017 |   |
| Net losses on derivatives                                                                 |   |                                                               | (71     | ) |   |   | (1,867 | ) |
| Net gains on early extinguishments of liabilities                                         |   |                                                               | 293     |   |   |   | 6,866 |   |
| Equity in (losses) earnings from unconsolidated ventures                                  |   |                                                               | (6      | ) |   |   | 1 |   |
| Equity in losses from Lower Tier Property Partnerships of consolidated funds and ventures |   |                                                               | (7,873  | ) |   |   | (12,291 | ) |
| Loss from continuing operations before income taxes                                       |   |                                                               | (16,298 | ) |   |   | (21,443 | ) |
| Income tax (expense) benefit                                                              |   |                                                               | (112    | ) |   |   | 16 |   |
| (Loss) income from discontinued operations, net of tax                                    |   |                                                               | (110    | ) |   |   | 29 |   |
| Net loss                                                                                  |   |                                                               | (16,520 | ) |   |   | (21,398 | ) |
| (Income) loss allocable to noncontrolling interests:                                      |   |                                                               |    |   |   |   |   |   |
| Income allocable to perpetual preferred shareholders of a subsidiary company              |   |                                                               | (2,442  | ) |   |   | (2,466 | ) |
| Net losses allocable to noncontrolling interests in consolidated funds and ventures:      |   |                                                               |    |   |   |   |   |   |
| Related to continuing operations                                                          |   |                                                               | 14,266  |   |   |   | 13,779 |   |
| Related to discontinued operations                                                        |   |                                                               | − |   |   |   | 51 |   |
| Net loss to common shareholders                                                           |   | $                                                                  | (4,696  | ) |   | $ | (10,034 | ) |
|                                                                                      |   |                                                               |    |   |   |   |   |   |
| Basic and diluted loss per common share:                                                  |   |                                                               |    |   |   |   |   |   |
| Loss per common share                                                                     |   | $                                                                  | (0.11   | ) |   | $ | (0.25 | ) |
| Weighted-average common shares outstanding                                                |   |                                                               | 40,855  |   |   |   | 40,369 |   |

----

|                                                                     |   | For the three months ended March 31, |    |
|--------------------------------------------------------------------------|--------|--------------------------------------------------------------------|---------|
|                                                                     |   | 2011                                                               |    |   | 2010 |   |
|                                                                     |   |                                                               |    |   |   |   |
| Net loss                                                                 |   | $                                                                  | (16,520 | ) |   | $ | (21,398 | ) |
|                                                                     |   |                                                               |    |   |   |   |   |   |
| Other comprehensive income (loss) allocable to common shareholders:      |   |                                                               |    |   |   |   |   |   |
| Unrealized gains (losses) on bonds available-for-sale:                   |   |                                                               |    |   |   |   |   |   |
| Unrealized net holding losses arising during the period                  |   |                                                               | (4,067  | ) |   |   | (2,415 | ) |
| Reversal of unrealized gains on sold/redeemed bonds                      |   |                                                               | (888    | ) |   |   | (417 | ) |
| Reclassification of unrealized losses to operations                      |   |                                                               | 3,510   |   |   |   | 6,434 |   |
| Total unrealized (losses) gains on bonds available-for-sale         |   |                                                               | (1,445  | ) |   |   | 3,602 |   |
| Currency translation adjustment                                          |   |                                                               | (275    | ) |   |   | 506 |   |
| Other comprehensive (loss) income allocable to common shareholders       |   |                                                               | (1,720  | ) |   |   | 4,108 |   |
|                                                                     |   |                                                               |    |   |   |   |   |   |
| Other comprehensive (loss) income allocable to noncontrolling interests: |   |                                                               |    |   |   |   |   |   |
| Currency translation adjustment                                          |   |                                                               | (2,361  | ) |   |   | 16 |   |
|                                                                     |   |                                                               |    |   |   |   |   |   |
| Comprehensive loss                                                       |   | $                                                                  | (20,601 | ) |   | $ | (17,274 | ) |

----

|                                                                                               | Common Shares |    |   | AccumulatedOtherComprehensiveIncome (Loss) |   |     | CommonShareholders’Equity(Deficit) |   |   | PerpetualPreferredShareholders’ Equity |   |   | NoncontrollingInterest inConsolidatedFunds andVentures |    |   | TotalEquity |   |
|----------------------------------------------------------------------------------------------------|--------------------|---------|--------|-------------------------------------------------|--------|----------|------------------------------------------|--------|--------|---------------------------------------------------|--------|--------|------------------------------------------------------------------|---------|--------|-------------|--------|
|                                                                                               | Number             |    |   | Amount                                          |   |     |                                     |   |   |                                              |   |   |                                                             |    |   |        |   |   |   |   |
|                                                                                               |               |    |   |                                            |   |     |                                     |   |   |                                              |   |   |                                                             |    |   |        |   |   |   |   |
| Balance, December 31, 2010                                                                         |               | 40,851  |   |                                            | $      | (130,466 | )                                        |   | $      | 92,629                                            |   |   | $                                                                | (37,837 | )      |        | $      | 168,686 |   |   | $ | 569,556 |   |   | $ | 700,405 |   |
| Net (loss) income                                                                                  |               | − |   |                                            |   | (4,696   | )                                        |   |   | −                                           |   |   |                                                             | (4,696  | )      |        |   | 2,442 |   |   |   | (14,266 | ) |   |   | (16,520 | ) |
| Other comprehensive loss                                                                           |               | − |   |                                            |   | −  |                                     |   |   | (1,720                                            | )      |   |                                                             | (1,720  | )      |        |   | − |   |   |   | (2,361 | ) |   |   | (4,081 | ) |
| Distributions                                                                                      |               | − |   |                                            |   | −  |                                     |   |   | −                                           |   |   |                                                             | − |   |        |   | (2,442 | ) |   |   | − |   |   |   | (2,442 | ) |
| Common, restricted and deferred shares issued under employee and non-employee director share plans |               | 216     |   |                                            |   | 26       |                                     |   |   | −                                           |   |   |                                                             | 26      |   |        |   | − |   |   |   | − |   |   |   | 26 |   |
| Preferred share repurchases                                                                        |               | − |   |                                            |   | 703      |                                     |   |   | −                                           |   |   |                                                             | 703     |   |        |   | (3,883 | ) |   |   | − |   |   |   | (3,180 | ) |
| Contributions                                                                                      |               | − |   |                                            |   | −  |                                     |   |   | −                                           |   |   |                                                             | − |   |        |   | − |   |   |   | 9,061 |   |   |   | 9,061 |   |
| Balance, March 31, 2011                                                                            |               | 41,067  |   |                                            | $      | (134,433 | )                                        |   | $      | 90,909                                            |   |   | $                                                                | (43,524 | )      |        | $      | 164,803 |   |   | $ | 561,990 |   |   | $ | 683,269 |   |

----

|                                                                                                   |   | For the three months endedMarch 31, |    |
|--------------------------------------------------------------------------------------------------------|--------|--------------------------------------------------------------|---------|
|                                                                                                   |   | 2011                                                         |    |   | 2010 |   |
| CASH FLOWS FROM OPERATING ACTIVITIES:                                                                  |   |                                                         |    |   |   |   |
| Net loss                                                                                               |   | $                                                            | (16,520 | ) |   | $ | (21,398 | ) |
| Less net loss attributable to noncontrolling interests                                                 |   |                                                         | (11,824 | ) |   |   | (11,364 | ) |
| Net loss to common shareholders                                                                        |   |                                                         | (4,696  | ) |   |   | (10,034 | ) |
| Adjustments to reconcile net loss to common shareholders to net cash provided by operating activities: |   |                                                         |    |   |   |   |   |   |
| Net losses (gains) on sales of bonds and loans                                                         |   |                                                         | 491     |   |   |   | (3,384 | ) |
| Net gains on sales of real estate                                                                      |   |                                                         | (2      | ) |   |   | (205 | ) |
| Provisions for credit losses and impairment                                                            |   |                                                         | 7,802   |   |   |   | 12,643 |   |
| Equity in losses, net from equity investments                                                          |   |                                                         | 7,870   |   |   |   | 12,290 |   |
| Net losses allocable to noncontrolling interests from consolidated funds and ventures                  |   |                                                         | (14,266 | ) |   |   | (13,830 | ) |
| Income allocable to perpetual preferred shareholders of a subsidiary company                           |   |                                                         | 2,442   |   |   |   | 2,466 |   |
| Purchases, advances on and originations of loans held for sale                                         |   |                                                         | (106    | ) |   |   | (12 | ) |
| Principal payments and sales proceeds received on loans held for sale                                  |   |                                                         | 152     |   |   |   | 4,499 |   |
| Federal income tax refund                                                                              |   |                                                         | − |   |   |   | 7,694 |   |
| Other                                                                                                  |   |                                                         | 4,938   |   |   |   | 4,479 |   |
| Net cash provided by operating activities                                                              |   |                                                         | 4,625   |   |   |   | 16,606 |   |
| CASH FLOWS FROM INVESTING ACTIVITIES:                                                                  |   |                                                         |    |   |   |   |   |   |
| Principal payments and sales proceeds received on bonds                                                |   |                                                         | 24,931  |   |   |   | 9,463 |   |
| Principal payments received on loans held for investment                                               |   |                                                         | 45,495  |   |   |   | 1,318 |   |
| Investments in property partnerships                                                                   |   |                                                         | (5,200  | ) |   |   | (14,622 | ) |
| Increase in restricted cash and cash of consolidated funds and ventures                                |   |                                                         | (2,526  | ) |   |   | (10,297 | ) |
| Other                                                                                                  |   |                                                         | 75      |   |   |   | 293 |   |
| Net cash provided by (used in) investing activities                                                    |   |                                                         | 62,775  |   |   |   | (13,845 | ) |
| CASH FLOWS FROM FINANCING ACTIVITIES:                                                                  |   |                                                         |    |   |   |   |   |   |
| Net proceeds from borrowing activity                                                                   |   |                                                         | 35      |   |   |   | 10,374 |   |
| Repayment of borrowings                                                                                |   |                                                         | (69,387 | ) |   |   | (24,399 | ) |
| Payment of debt issue costs                                                                            |   |                                                         | (5      | ) |   |   | (544 | ) |
| Contributions from holders of noncontrolling interests                                                 |   |                                                         | 9,061   |   |   |   | 12,781 |   |
| Distributions paid to perpetual preferred shareholders of a subsidiary company                         |   |                                                         | (2,442  | ) |   |   | (2,466 | ) |
| Repurchase and retirement of perpetual preferred shares                                                |   |                                                         | (3,180  | ) |   |   | − |   |
| Net cash used in financing activities                                                                  |   |                                                         | (65,918 | ) |   |   | (4,254 | ) |
|                                                                                                   |   |                                                         |    |   |   |   |   |   |
| Net increase (decrease) in cash and cash equivalents                                                   |   |                                                         | 1,482   |   |   |   | (1,493 | ) |
| Unrestricted cash and cash equivalents at beginning of period                                          |   |                                                         | 32,544  |   |   |   | 18,084 |   |
| Unrestricted cash and cash equivalents at end of period                                                |   | $                                                            | 34,026  |   |   | $ | 16,591 |   |

----

|                                                                                                    |   | For the three months endedMarch 31, |    |
|---------------------------------------------------------------------------------------------------------|--------|--------------------------------------------------------------|---------|
|                                                                                                    |   | 2011                                                         |    |   | 2010 |   |
| SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION                                                        |   |                                                         |    |   |   |   |
| Interest paid                                                                                           |   | $                                                            | 12,546  |   |   | $ | 14,277 |   |
| Income taxes paid                                                                                       |   |                                                         | 18      |   |   |   | 22 |   |
|                                                                                                    |   |                                                         |    |   |   |   |   |   |
| Non-cash investing and financing activities:                                                            |   |                                                         |    |   |   |   |   |   |
| Unrealized (losses) gains included in other comprehensive income                                        |   |                                                         | (4,081  | ) |   |   | 4,124 |   |
| Debt and liabilities extinguished through sales and collections on bonds                                |   |                                                         | 925     |   |   |   | 26,035 |   |
| Decrease in unfunded commitments for equity investments                                                 |   |                                                         | 771     |   |   |   | 12,481 |   |
| Debt assumed upon acquisition of interests in securitization trusts                                     |   |                                                         | − |   |   |   | 634 |   |
| Assets received in troubled debt restructuring                                                          |   |                                                         | − |   |   |   | 9,450 |   |
| Increase in assets due to initial consolidation of funds and ventures                                   |   |                                                         | − |   |   |   | 45,692 |   |
| Increase in liabilities and noncontrolling interests due to initial consolidation of funds and ventures |   |                                                         | − |   |   |   | 45,692 |   |
| Decrease in assets due to deconsolidation of funds and ventures                                         |   |                                                         | − |   |   |   | 29,141 |   |
| Decrease in liabilities and noncontrolling interests due to deconsolidation of funds and ventures       |   |                                                         | − |   |   |   | 25,107 |   |

----

|   | · | TEB’s leverage ratio was 59.3%, which was effectively at the incurrence limit of 60%; |
|--------|--------|---------------------------------------------------------------------------------------------|

|   | · | TEB’s liquidation preference ratios were at amounts that would restrict it from raising additional preferred equity on parity with the existing preferred shares outstanding; and |
|--------|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | TEB’s ability to distribute cash to MuniMae was and continues to be limited to Distributable Cash Flows (TEB’s net income adjusted to exclude the impact of non-cash items) and TEB does not have the ability to make redemptions of common stock or distributions to MuniMae other than Distributable Cash Flows (“Restricted Payments”) because the current liquidation preference ratios prohibit it. |
|--------|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

|   | · | Forbearance from the minimum net asset value requirement and the financial reporting requirement contained in the interest rate swap agreements until the earlier of June 30, 2012 or when TEB regains compliance with the leverage and liquidation incurrence ratios. |
|--------|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | The Company must post a portion of the distributions it receives on TEB’s common stock as follows: |
|--------|--------|----------------------------------------------------------------------------------------------------------|

|   | o | For quarterly distributions beginning in the fourth quarter of 2010 and continuing through to the third quarter of 2011, the Company will post restricted distributions equal to 50% of common distributions, less $0.8 million. |
|--------|---|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | o | For quarterly distributions beginning in the fourth quarter of 2011 and continuing until TEB is in compliance with both its leverage ratio and liquidation preference ratio, the Company will post restricted distributions equal to 50% of common distributions.  Once TEB is in compliance with its leverage ratio and liquidation preference ratios there will be no restrictions on common distributions. |
|--------|---|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

|                   |   | March 31, 2011 |      |
|------------------------|--------|--------------------------|-----------|
| (in thousands)    |   | UnpaidPrincipalBalance   |      |   | BasisAdjustments (1) |   |   | UnrealizedLosses |   |   | UnrealizedGains |   |   | Fair Value |   |
| Mortgage revenue bonds |   | $                        | 1,154,839 |   |   | $ | (8,020 | ) |   | $ | (147,590 | ) |   | $ | 69,903 |   |   | $ | 1,069,132 |   |
| Other bonds            |   |                     | 163,156   |   |   |   | (13,190 | ) |   |   | (39,882 | ) |   |   | 20,696 |   |   |   | 130,780 |   |
| Total                  |   | $                        | 1,317,995 |   |   | $ | (21,210 | ) |   | $ | (187,472 | ) |   | $ | 90,599 |   |   | $ | 1,199,912 |   |

|                   |   | December 31, 2010 |      |
|------------------------|--------|-----------------------------|-----------|
| (in thousands)    |   | UnpaidPrincipalBalance      |      |   | BasisAdjustments (1) |   |   | UnrealizedLosses |   |   | UnrealizedGains |   |   | Fair Value |   |
| Mortgage revenue bonds |   | $                           | 1,196,695 |   |   | $ | (7,852 | ) |   | $ | (145,684 | ) |   | $ | 69,883 |   |   | $ | 1,113,042 |   |
| Other bonds            |   |                        | 148,793   |   |   |   | (13,369 | ) |   |   | (39,590 | ) |   |   | 22,160 |   |   |   | 117,994 |   |
| Total                  |   | $                           | 1,345,488 |   |   | $ | (21,221 | ) |   | $ | (185,274 | ) |   | $ | 92,043 |   |   | $ | 1,231,036 |   |

|   | (1) | Includes premiums, discounts and deferred costs. |
|--------|-----|--------------------------------------------------|

----

|                                                             |   | March 31, 2011 |      |
|------------------------------------------------------------------|--------|--------------------------|-----------|
| (in thousands)                                              |   | Amortized Cost      |      |   | Fair Value |   |
| Non-Amortizing:                                                  |   |                     |      |   |   |   |
| Due in less than one year                                        |   | $                        | −   |   |   | $ | − |   |
| Due between one and five years                                   |   |                     | −   |   |   |   | − |   |
| Due between five and ten years                                   |   |                     | −   |   |   |   | − |   |
| Due after ten years                                              |   |                     | 20,152    |   |   |   | 41,747 |   |
| Amortizing:                                                      |   |                     |      |   |   |   |   |   |
| Due at stated maturity dates between December 2013 and June 2056 |   |                     | 1,089,161 |   |   |   | 1,158,165 |   |
|                                                             |   | $                        | 1,109,313 |   |   | $ | 1,199,912 |   |

|                                                                          |   | March 31, 2011 |      |
|-------------------------------------------------------------------------------|--------|--------------------------|-----------|
| (in thousands)                                                                |   | UnpaidPrincipalBalance   |      |   | AmortizedCost |   |   | Fair Value |   |
| Bonds that may be prepaid without restrictions or penalties at March 31, 2011 |   | $                        | 153,222   |   |   | $ | 120,439 |   |   | $ | 143,188 |   |
| April 1 through December 31, 2011                                             |   |                     | 8,550     |   |   |   | 7,257 |   |   |   | 7,413 |   |
| 2012                                                                          |   |                     | 31,219    |   |   |   | 25,598 |   |   |   | 26,609 |   |
| 2013                                                                          |   |                     | 16,797    |   |   |   | 14,905 |   |   |   | 15,788 |   |
| 2014                                                                          |   |                     | 29,138    |   |   |   | 28,792 |   |   |   | 30,048 |   |
| Thereafter                                                                    |   |                     | 979,562   |   |   |   | 828,205 |   |   |   | 881,651 |   |
| Bonds that may not be prepaid                                                 |   |                     | 99,507    |   |   |   | 84,117 |   |   |   | 95,215 |   |
| Total                                                                         |   | $                        | 1,317,995 |   |   | $ | 1,109,313 |   |   | $ | 1,199,912 |   |

|                                                        |   | For the three monthsended March 31, |   |
|-------------------------------------------------------------|--------|-------------------------------------|--------|
| (in thousands)                                              |   | 2011                                |   |   | 2010 |   |
| Bond impairment recognized on bonds held at each period-end |   | $                                   | (3,510 | ) |   | $ | (6,434 | ) |
| Losses recognized at time of sale/redemption                |   |                                | (1,036 | ) |   |   | (2 | ) |
| Gains recognized at time of sale/redemption                 |   |                                | 715    |   |   |   | 368 |   |
| Total net losses on bonds                                   |   | $                                   | (3,831 | ) |   | $ | (6,068 | ) |

----

| (in thousands)      |   | March 31,2011 |    |   | December 31,2010 |   |
|--------------------------|--------|--------------------|---------|--------|-----------------------|--------|
| Construction             |   | $                  | − |   |                  | $      | 5,601 |   |
| Permanent                |   |               | 12,663  |   |                  |   | 20,647 |   |
| Bridge                   |   |               | 1,793   |   |                  |   | 1,793 |   |
| Other                    |   |               | 714     |   |                  |   | 640 |   |
|                     |   |               | 15,170  |   |                  |   | 28,681 |   |
| LOCOM Adjustment         |   |               | (9,886  | )      |                  |   | (9,692 | ) |
| Loans held for sale, net |   | $                  | 5,284   |   |                  | $      | 18,989 |   |

|                              |   | For the three months endedMarch 31, |    |
|-----------------------------------|--------|--------------------------------------------------------------|---------|
| (in thousands)                    |   | 2011                                                         |    |   | 2010 |   |
| Balance-January 1,                |   | $                                                            | 9,692   |   |   | $ | 32,582 |   |
| LOCOM adjustments                 |   |                                                         | 194     |   |   |   | (208 | ) |
| Recoveries and (charge-offs), net |   |                                                         | − |   |   |   | (18,356 | ) |
| Balance-March 31,                 |   | $                                                            | 9,886   |   |   | $ | 14,018 |   |

----

| (in thousands)            |   | March 31,2011 |    |   | December 31,2010 |   |
|--------------------------------|--------|--------------------|---------|--------|-----------------------|--------|
| Construction                   |   | $                  | − |   |                  | $      | 31,776 |   |
| Permanent                      |   |               | 8,980   |   |                  |   | 9,048 |   |
| Bridge                         |   |               | 27,154  |   |                  |   | 27,177 |   |
| Other                          |   |               | 19,602  |   |                  |   | 19,645 |   |
|                           |   |               | 55,736  |   |                  |   | 87,646 |   |
| Allowance for loan losses      |   |               | (34,278 | )      |                  |   | (33,713 | ) |
| Loans held for investment, net |   | $                  | 21,458  |   |                  | $      | 53,933 |   |

| (in thousands)  |   | March 31,2011 |    |   | December 31,2010 |   |
|----------------------|--------|--------------------|---------|--------|-----------------------|--------|
| Total current        |   | $                  | 13,997  |   |                  | $      | 46,472 |   |
| 30-59 days past due  |   |               | − |   |                  |   | − |   |
| 60-89 days past due  |   |               | − |   |                  |   | − |   |
| Greater than 90 days |   |               | 7,461   |   |                  |   | 7,461 |   |

| (in thousands)                           |   | March 31,2011 |    |   | December 31,2010 |   |
|-----------------------------------------------|--------|--------------------|---------|--------|-----------------------|--------|
| Impaired loans with a specific reserve        |   | $                  | 15,509  |   |                  | $      | 9,450 |   |
| Impaired loans without a specific reserve (1) |   |               | − |   |                  |   | − |   |
| Total impaired loans                          |   | $                  | 15,509  |   |                  | $      | 9,450 |   |
|                                          |   |               |    |   |                  |   |   |   |
| Average carrying value of impaired loans      |   | $                  | 15,820  |   |                  | $      | 9,847 |   |

|   | (1) | A loan is impaired when it is probable that a creditor will be unable to collect all amounts due according to the contractual terms of the loan agreement; however, when the discounted cash flows, collateral value or market price equals or exceeds the carrying value of the loan, the loan does not require a specific reserve. |
|--------|-----|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|                              |   | For the three months endedMarch 31, |    |
|-----------------------------------|--------|-------------------------------------|---------|
| (in thousands)                    |   | 2011                                |    |   | 2010 |   |
| Balance-January 1,                |   | $                                   | 33,713  |   |   | $ | 29,238 |   |
| Provision for loan losses         |   |                                | 565     |   |   |   | 3,467 |   |
| (Charge-offs) and recoveries, net |   |                                | − |   |   |   | 35 |   |
| Balance-March 31,                 |   | $                                   | 34,278  |   |   | $ | 32,740 |   |

----

| (in thousands)                              |   | March 31,2011 |   |   | December 31,2010 |   |
|---------------------------------------------|--------|---------------|--------|--------|------------------|--------|
| Investments in Real Estate Related Entities |   | $             | 6,837  |   |             | $      | 6,842 |   |

----

| (in thousands)                          |   | March 31,2011 |   |   | December 31,2010 |   |
|-----------------------------------------|--------|---------------|--------|--------|------------------|--------|
| Investments in unconsolidated ventures: |   |          |   |   |             |   |
| Total assets (primarily real estate)    |   | $             | 57,370 |   |             | $      | 66,601 |   |
| Total liabilities (primarily debt)      |   |          | 22,707 |   |             |   | 22,600 |   |

|           |   | For the three months ended March 31, |   |
|----------------|--------|--------------------------------------|--------|
| (in thousands) |   | 2011                                 |   |   | 2010 |   |
| Net income     |   | $                                    | 122    |   |   | $ | 168 |   |

| (in thousands)                    |   | March 31,2011 |   |   | December 31,2010 |   |
|-----------------------------------|--------|---------------|--------|--------|------------------|--------|
| Other assets:                     |   |          |   |   |             |   |
| Accrued interest receivable       |   | $             | 8,924  |   |             | $      | 10,793 |   |
| Property and equipment, net       |   |          | 1,313  |   |             |   | 1,453 |   |
| Federal and state tax receivables |   |          | 5,157  |   |             |   | 5,539 |   |
| Debt issue costs, net             |   |          | 10,123 |   |             |   | 10,349 |   |
| Real estate owned                 |   |          | 13,155 |   |             |   | 13,231 |   |
| Other assets                      |   |          | 3,366  |   |             |   | 4,662 |   |
| Total other assets                |   | $             | 42,038 |   |             | $      | 46,027 |   |

|                                   |   | Fair Value     |   |
|----------------------------------------|--------|----------------|--------|
|                                   |   | March 31, 2011 |   |   | December 31, 2010 |   |
| (in thousands)                         |   | Assets         |   |   | Liabilities |   |   | Assets |   |   | Liabilities |   |
|                                   |   |           |   |   |   |   |   |   |   |   |   |   |
| Interest rate swaps                    |   | $              | 6,071  |   |   | $ | 17,488 |   |   | $ | 6,812 |   |   | $ | 19,561 |   |
| Other                                  |   |           | 17     |   |   |   | 571 |   |   |   | − |   |   |   | 592 |   |
| Total derivative financial instruments |   | $              | 6,088  |   |   | $ | 18,059 |   |   | $ | 6,812 |   |   | $ | 20,153 |   |

|                |   | Notional      |    |
|---------------------|--------|---------------|---------|
| (in thousands)      |   | March 31,2011 |    |   | December 31,2010 |   |
|                |   |          |    |   |   |   |
| Interest rate swaps |   | $             | 303,735 |   |   | $ | 303,735 |   |
| Other               |   |          | 19,960  |   |   |   | 23,974 |   |

----

|                    |   | Realized/Unrealized Gains(Losses) Reported ThroughContinuing OperationsFor the three months endedMarch 31, |    |
|-------------------------|--------|------------------------------------------------------------------------------------------------------------|---------|
| (in thousands)          |   | 2011                                                                                                       |    |   | 2010 |   |
|                    |   |                                                                                                       |    |   |   |   |
| Interest rate swaps (1) |   | $                                                                                                          | − |   |   | $ | (2,499 | ) |
| Other                   |   |                                                                                                       | (71     | ) |   |   | 632 |   |
| Total                   |   | $                                                                                                          | (71     | ) |   | $ | (1,867 | ) |

|   | (1) | The cash paid and received on both interest rate swaps and total return swaps is settled on a net basis and recorded through “Net losses on derivatives.”  Net cash paid was $1.4 million and $1.8 million for the three months ended March 31, 2011 and 2010, respectively. |
|--------|-----|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

| (in thousands)                                           |   | March 31,2011 |          |   | Weighted-AverageInterest Rate atPeriod-End |   |    | December 31,2010 |   |   | Weighted-AverageInterest Rate atPeriod-End |   |
|----------------------------------------------------------|--------|---------------|---------------|--------|--------------------------------------------|--------|---------|------------------|--------|--------|--------------------------------------------|--------|
|                                                     |   |          |          |   |                                       |   |    |             |   |   |                                       |   |
| Debt related to bond investing activities (1):           |   |          |          |   |                                       |   |    |             |   |   |                                       |   |
| Senior interests and debt owed to securitization trusts: |   |          |          |   |                                       |   |    |             |   |   |                                       |   |
| Due within one year (2)                                  |   | $             | −       |   |                                       |   | − |             |   | $      | 15,985                                     |   |   |   | 0.4 | % |
| Due after one year (2)                                   |   |          | 729,910       |   |                                       |   | 0.7     | %                |   |   | 732,115                                    |   |   |   | 0.7 |   |
| Mandatorily redeemable preferred shares (3):             |   |          |          |   |                                       |   |    |             |   |   |                                       |   |   |   |   |   |
| Due within one year                                      |   |          | 5,662         |   |                                       |   | 7.5     |             |   |   | 5,558                                      |   |   |   | 7.5 |   |
| Due after one year                                       |   |          | 122,744       |   |                                       |   | 8.5     |             |   |   | 127,971                                    |   |   |   | 8.6 |   |
| Notes payable and other debt (4):                        |   |          |          |   |                                       |   |    |             |   |   |                                       |   |   |   |   |   |
| Due within one year                                      |   |          | 5,654         |   |                                       |   | 6.0     |             |   |   | 5,654                                      |   |   |   | 6.0 |   |
| Due after one year                                       |   |          | 66,859        |   |                                       |   | 6.7     |             |   |   | 68,444                                     |   |   |   | 6.7 |   |
| Total bond related debt                                  |   |          | 930,829       |   |                                       |   |    |             |   |   | 955,727                                    |   |   |   |   |   |
|                                                     |   |          |          |   |                                       |   |    |             |   |   |                                       |   |   |   |   |   |
| Non-bond related debt:                                   |   |          |          |   |                                       |   |    |             |   |   |                                       |   |   |   |   |   |
| Notes payable and other debt:                            |   |          |          |   |                                       |   |    |             |   |   |                                       |   |   |   |   |   |
| Due within one year                                      |   |          | 59,588        |   |                                       |   | 7.4     |             |   |   | 106,520                                    |   |   |   | 7.4 |   |
| Due after one year                                       |   |          | 33,021        |   |                                       |   | 10.9    |             |   |   | 27,267                                     |   |   |   | 12.1 |   |
| Subordinated debentures (5)                              |   |          |          |   |                                       |   |    |             |   |   |                                       |   |   |   |   |   |
| Due after one year                                       |   |          | 186,617       |   |                                       |   | 8.8     |             |   |   | 183,711                                    |   |   |   | 8.8 |   |
| Line of credit facilities:                               |   |          |          |   |                                       |   |    |             |   |   |                                       |   |   |   |   |   |
| Due within one year                                      |   |          | −       |   |                                       |   | − |             |   |   | 4,190                                      |   |   |   | 6.0 |   |
| Total non-bond related debt                              |   |          | 279,226       |   |                                       |   |    |             |   |   | 321,688                                    |   |   |   |   |   |
|                                                     |   |          |     |   |                                       |   |    |             |   |   |                                  |   |   |   |   |   |
| Total debt                                               |   | $             | 1,210,055     |   |                                       |   |    |             |   | $      | 1,277,415                                  |   |   |   |   |   |

|   | (1) | Debt related to bond investing activities is debt that is either collateralized or securitized by bonds or other debt obligations of TEB and TEI. |
|--------|-----|---------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (2) | The Company also incurs on-going fees related to credit enhancement, liquidity, custodian, trustee and remarketing as well as upfront debt issuance costs, which when added to the weighted average interest rate brings the overall weighted average interest expense (due within one year) to 1.9% December 31, 2010.  These additional fees bring the weighted average interest rate (due after one year) to 1.9% and 2.0% at March 31, 2011 and December 31, 2010, respectively. |
|--------|-----|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (3) | Included in mandatorily redeemable preferred shares are unamortized discounts of $4.2 million and $4.4 million at March 31, 2011 and December 31, 2010, respectively. |
|--------|-----|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (4) | Included in notes payable and other debt are unamortized discounts of $1.8 million at March 31, 2011 and December 31, 2010. |
|--------|-----|-----------------------------------------------------------------------------------------------------------------------------|

|   | (5) | Included in subordinated debentures are unamortized discounts of $10.1 million and $13.0 million at March 31, 2011 and December 31, 2010, respectively. |
|--------|-----|---------------------------------------------------------------------------------------------------------------------------------------------------------|

----

|                                                    |   | Issue Date           |   | Numberof Shares |   |   | LiquidationAmountPer Share |   |      | AnnualDistributionRate |   |   | AnnualAggregateDistribution andRedemption Rate |   | Next Remarketing/ Mandatory Tender Date |   | Mandatory RedemptionDate |
|---------------------------------------------------------|--------|----------------------|--------|-----------------|--------|--------|----------------------------|--------|-----------|------------------------|--------|--------|------------------------------------------------|--------|-----------------------------------------|--------|--------------------------|
|                                                    |   |                 |   |            |   |   |                       |   |      |                   |   |   |                                           |   |                                    |   |                     |   |   |   |   |
| Series A Mandatorily Redeemable Preferred Shares   |   | May 27, 1999    |   |            | 37.5   |   |                       | $      | 1,829,523 |                   |   |   | 7.50                                           | %      |                                    |   | 12.68                    | %  | June 30, 2011 |   | June 30, 2049 |
|                                                    |   |                 |   |            |   |   |                       |   |      |                   |   |   |                                           |   |                                    |   |                     |   |   |   |   |
| Series B Mandatorily Redeemable Preferred Shares   |   | June 2, 2000    |   |            | 30     |   |                       |   | 2,000,000 |                   |   |   | 9.56                                           |   |                                    |   | N/A                      |   | November 1, 2011 |   | June 30, 2050 |
|                                                    |   |                 |   |            |   |   |                       |   |      |                   |   |   |                                           |   |                                    |   |                     |   |   |   |   |
| Series B-1 Mandatorily Redeemable Preferred Shares |   | October 9, 2001 |   |            | 2      |   |                       |   | 2,000,000 |                   |   |   | 9.56                                           |   |                                    |   | N/A                      |   | November 1, 2011 |   | June 30, 2050 |

|   | · | The Series B and B-1 shares were subject to remarketing on November 1, 2010.  The holders of a majority of the outstanding Series B and B-1 shares, voting separately, elected to waive the November 1, 2010 remarketing requirement, effective November 1, 2010, and to increase the distribution rate on the Series B and B-1 shares from 7.75% and 6.8%, respectively, to 9.56% for one year.  The next mandatory remarketing date for the Series B Preferred Shares will occur on November 1, 2011. |
|--------|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | Effective June 30, 2009, the Series Exhibit for Series A was amended and restated.  The amendment increased the distribution rate from 6.88% to 7.50% effective July 1, 2009, on the outstanding mandatorily redeemable preferred shares and provided for redemptions of shares beginning in October 31, 2009 and continuing through October 31, 2021, for an annual aggregate distribution and redemption rate of 12.68%.  The holders of a majority of the outstanding Series A shares, voting separately, elected to waive the June 30, 2010 remarketing requirement.  As a result, the next mandatory remarketing date for the Series A Preferred Shares will occur on June 30, 2011. |
|--------|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

| (dollars in thousands) |   |               |    |   |            |   |    |                   |   |                   |    |                     |           |                    |
|------------------------|--------|--------------------|---------|--------|-----------------|--------|---------|------------------------|--------|------------------------|---------|--------------------------|----------------|-------------------------|
| Issuer                 |   | DebenturePrincipal |    |   | NetDiscount (1) |   |    | DebentureCarryingValue |   | OptionalRedemptionDate |    | InterimPrincipalPayments |           | DebenturesMaturity Date |   | Coupon Interest Rate |
| MMIC                   |   | $                  | 30,000  |   |            | $      | − |                   |   | $                      | 30,000  |                     | May 5, 2014    |                    | − |   | May 5, 2034 |   | 9.5% to May 2014, then greater of 9.5% or 6.0% plus 10 year Treasury |
| MFH                    |   |               | 58,420  |   |            |   | (3,247  | )                      |   |                   | 55,173  |                     | May 5, 2014    |                    | − |   | May 5, 2034 |   | 0.75% to January 2012, 9.5% to May 2014,  then greater of 9.5% or 6.0% plus 10 year Treasury |
| MFH                    |   |               | 61,000  |   |            |   | (3,616  | )                      |   |                   | 57,384  |                     | March 30, 2010 |                    | $8,900 due June 2014 |   | March 30, 2035 |   | 0.75% to May 2012, 8.05% to May 2015, then 3 month LIBOR plus 3.3% |
| MFH                    |   |               | 47,275  |   |            |   | (3,215  | )                      |   |                   | 44,060  |                     | July 30, 2010  |                    | $6,500 due July 2014 |   | July 30, 2035 |   |  0.75% to May 2012, 7.62% to May 2015, then 3 month LIBOR plus 3.3% |
|                   |   | $                  | 196,695 |   |            | $      | (10,078 | )                      |   | $                      | 186,617 |                     |           |                    |   |   |   |   |   |

| (1) | The discount represents additional principal owed for which no cash proceeds were received less the amount of cumulative discount that has been amortized through March 31, 2011. |
|-----|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (in thousands) |   |   |      |
|----------------|--------|--------|-----------|
| 2011 (1)       |   | $      | 68,850    |   |
| 2012           |   |   | 72,896    |   |
| 2013           |   |   | 47,039    |   |
| 2014           |   |   | 32,898    |   |
| 2015           |   |   | 39,745    |   |
| Thereafter     |   |   | 948,627   |   |
| Total          |   | $      | 1,210,055 |   |

| (1) | Of this amount, $54.6 million represents proceeds from the legal transfer of assets that failed to receive sale accounting and are therefore accounted for as a secured borrowing, all of which is subject to the above mentioned forbearance agreements. |
|-----|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

|                                                    |   | March 31, 2011 |    |   | December 31, 2010 |   |
|---------------------------------------------------------|--------|--------------------------|---------|--------|-----------------------------|--------|
| (in thousands)                                     |   | CarryingAmount           |    |   | EstimatedFair Value    |   |   | CarryingAmount |   |   | EstimatedFair Value |   |
| Assets:                                                 |   |                     |    |   |                        |   |   |   |   |   |   |   |
| Loans held for investment                               |   | $                        | 21,458  |   |                        | $      | 19,734 |   |   | $ | 53,933 |   |   | $ | 52,045 |   |
| Loans held for sale                                     |   |                     | 5,284   |   |                        |   | 5,732 |   |   |   | 18,989 |   |   |   | 20,156 |   |
| Investment in preferred stock                           |   |                     | 36,371  |   |                        |   | 37,845 |   |   |   | 36,371 |   |   |   | 37,487 |   |
|                                                    |   |                     |    |   |                        |   |   |   |   |   |   |   |   |   |   |   |
| Liabilities:                                            |   |                     |    |   |                        |   |   |   |   |   |   |   |   |   |   |   |
| Line of credit facilities                               |   |                     | − |   |                        |   | − |   |   |   | 4,190 |   |   |   | 4,190 |   |
| Senior interests and debt owed to securitization trusts |   |                     | 729,910 |   |                        |   | 730,449 |   |   |   | 748,100 |   |   |   | 748,665 |   |
| Notes payable and other debt                            |   |                     | 165,122 |   |                        |   | 118,299 |   |   |   | 207,885 |   |   |   | 162,024 |   |
| Subordinated debentures                                 |   |                     | 186,617 |   |                        |   | 27,537 |   |   |   | 183,711 |   |   |   | 27,537 |   |
| Mandatorily redeemable preferred shares                 |   |                     | 128,406 |   |                        |   | 118,189 |   |   |   | 133,529 |   |   |   | 123,444 |   |
| Liabilities of consolidated funds and ventures:         |   |                     |    |   |                        |   |   |   |   |   |   |   |   |   |   |   |
| Notes payable                                           |   |                     | 3,677   |   |                        |   | 3,677 |   |   |   | 3,709 |   |   |   | 3,709 |   |
|                                                    |   |                     |    |   |                        |   |   |   |   |   |   |   |   |   |   |   |
|                                                    |   | NotionalAmount           |    |   | EstimatedFair Value         |   |   | NotionalAmount |   |   | EstimatedFair Value |   |
| Off-Balance Sheet Financial Instruments:                |   |                     |    |   |                        |   |   |   |   |   |   |   |   |   |   |   |
| Lending Commitments                                     |   | $                        | 283     |   |                        | $      | 283 |   |   | $ | 315 |   |   | $ | 315 |   |

----

|   | · | Level 1:  Quoted prices in active markets for identical instruments. |
|--------|--------|--------------------------------------------------------------------------------|

|   | · | Level 2:  Quoted prices for similar instruments in active markets; quoted prices for identical or similar instruments in markets that are not active; and model-derived valuations in which significant inputs or significant value drivers are observable in active markets. |
|--------|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | Level 3:  Valuations derived from valuation techniques in which significant inputs or significant value drivers are unobservable. |
|--------|--------|---------------------------------------------------------------------------------------------------------------------------------------------|

|                     |   |               | Fair Value Measurement Levels at March 31, 2011 |   |
|--------------------------|--------|--------------------|------------------------------------------------------------------------------------|--------|
| (in thousands)      |   | March 31,2011 |                                                                               |   | Level 1 |   |   | Level 2 |   |   | Level 3 |   |
| Assets:                  |   |               |                                                                               |   |   |   |   |   |   |   |   |   |
| Bonds available-for-sale |   | $                  | 1,199,912                                                                          |   |   | $ | − |   |   | $ | − |   |   | $ | 1,199,912 |   |
| Derivative assets        |   |               | 6,088                                                                              |   |   |   | − |   |   |   | 6,088 |   |   |   | − |   |
|                     |   |               |                                                                               |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Liabilities:             |   |               |                                                                               |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Derivative liabilities   |   | $                  | 18,059                                                                             |   |   | $ | − |   |   | $ | 17,488 |   |   | $ | 571 |   |

|                     |   |                  | Fair Value Measurement Levels at December 31, 2010 |   |
|--------------------------|--------|-----------------------|---------------------------------------------------------------------------------------|--------|
| (in thousands)      |   | December 31,2010 |                                                                                  |   | Level 1 |   |   | Level 2 |   |   | Level 3 |   |
| Assets:                  |   |                  |                                                                                  |   |   |   |   |   |   |   |   |   |
| Bonds available-for-sale |   | $                     | 1,231,036                                                                             |   |   | $ | − |   |   | $ | − |   |   | $ | 1,231,036 |   |
| Derivative assets        |   |                  | 6,812                                                                                 |   |   |   | − |   |   |   | 6,812 |   |   |   | − |   |
|                     |   |                  |                                                                                  |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Liabilities:             |   |                  |                                                                                  |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Derivative liabilities   |   | $                     | 20,153                                                                                |   |   | $ | − |   |   | $ | 19,603 |   |   | $ | 550 |   |

| (in thousands)                                 |   | BondsAvailable-for-Sale |      |   | DerivativeLiabilities |   |
|-----------------------------------------------------|--------|-------------------------|-----------|--------|-----------------------|--------|
| Balance, January 1, 2011                            |   | $                       | 1,231,036 |   |                  | $      | (550 | ) |
| Total losses included in earnings                   |   |                    | (4,260    | )      |                  |   | (21 | ) |
| Total losses included in other comprehensive income |   |                    | (1,445    | )      |                  |   | − |   |
| Impact from sales                                   |   |                    | (21,123   | )      |                  |   | − |   |
| Impact from settlements                             |   |                    | (4,296    | )      |                  |   | − |   |
| Balance, March 31, 2011                             |   | $                       | 1,199,912 |   |                  | $      | (571 | ) |

----

| (in thousands)                                                                                         |   | Net losses onbonds (1) |    |   | Equity in Lossesfrom Lower TierPropertyPartnerships |   |    | Net gains(losses) onderivatives |   |
|-------------------------------------------------------------------------------------------------------------|--------|---------------------------------------|---------|--------|-------------------------------------------------------------------------|--------|---------|-------------------------------------------|--------|
|                                                                                                        |   |                                  |    |   |                                                                    |   |    |                                      |   |
| Change in realized gains related to assets and liabilities held at January 1, 2011, but settled during 2011 |   | $                                     | − |   |                                                                    | $      | − |                                      |   | $ | 9 |   |
| Change in unrealized losses related to assets and liabilities still held at March 31, 2011                  |   |                                  | (3,510  | )      |                                                                    |   | (750    | )                                         |   |   | (30 | ) |
| Additional realized losses recognized at settlement                                                         |   |                                  | (321    | )      |                                                                    |   | − |                                      |   |   | – |   |
| Total losses reported in earnings                                                                           |   | $                                     | (3,831  | )      |                                                                    | $      | (750    | )                                         |   | $ | (21 | ) |

|   | (1) | Amounts are reflected through “Impairment on bonds” and “Net (losses) gains on sale of bonds” in the consolidated statements of operations. |
|--------|-----|---------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (in thousands)                                     |   | BondsAvailable-for-Sale |      |   | DerivativeLiabilities |   |
|---------------------------------------------------------|--------|-------------------------|-----------|--------|-----------------------|--------|
| Balance, January 1, 2010                                |   | $                       | 1,348,133 |   |                  | $      | (919 | ) |
| Total (losses) gains included in earnings               |   |                    | (6,988    | )      |                  |   | 447 |   |
| Total gains included in other comprehensive income      |   |                    | 3,602     |   |                  |   | − |   |
| Impact from purchases                                   |   |                    | 635       |   |                  |   | − |   |
| Impact from sales                                       |   |                    | (14,793   | )      |                  |   | − |   |
| Impact from deconsolidation of GP Take Back partnership |   |                    | 6,422     |   |                  |   | − |   |
| Impact from settlements                                 |   |                    | (19,393   | )      |                  |   | − |   |
| Balance, March 31, 2010                                 |   | $                       | 1,317,618 |   |                  | $      | (472 | ) |

| (in thousands)                                                                                         |   | Net (losses) gains onbonds (1) |    |   | Equity in Lossesfrom Lower TierPropertyPartnerships |   |    | Net gains onderivatives |   |
|-------------------------------------------------------------------------------------------------------------|--------|----------------------------------------------------|---------|--------|-------------------------------------------------------------------------|--------|---------|-----------------------------------|--------|
|                                                                                                        |   |                                               |    |   |                                                                    |   |    |                              |   |
| Change in realized gains related to assets and liabilities held at January 1, 2010, but settled during 2010 |   | $                                                  | − |   |                                                                    | $      | − |                              |   | $ | 403 |   |
| Change in unrealized (losses) gains related to assets and liabilities still held at March 31, 2010          |   |                                               | (6,434  | )      |                                                                    |   | (554    | )                                 |   |   | 44 |   |
| Additional realized gains recognized at settlement                                                          |   |                                               | 366     |   |                                                                    |   | − |                              |   |   | − |   |
| Total (losses) gains reported in earnings                                                                   |   | $                                                  | (6,068  | )      |                                                                    | $      | (554    | )                                 |   | $ | 447 |   |

|   | (1) | Amounts are reflected through “Impairment on bonds” and “Net (losses) gains on sale of bonds” in the consolidated statements of operations. |
|--------|-----|---------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

|                |   |          | Fair Value Measurement Levels at March 31, 2011 |   |    | Total Losses Reported Through: |    |
|---------------------|--------|---------------|------------------------------------------------------|--------|---------|--------------------------------|---------|
| (in thousands)      |   | March 31,2011 |                                                 |   | Level 1 |                           |    | Level 2 |   |   | Level 3 |   |   | ContinuingOperations |   |   | DiscontinuedOperations |   |
| Assets:             |   |          |                                                 |   |    |                           |    |   |   |   |   |   |   |   |   |   |   |   |
| Loans held for sale |   | $             | 1,591                                                |   |    | $                              | − |   |   | $ | − |   |   | $ | 1,591 |   |   | $ | (195 | ) |   | $ | − |   |

|                                   |   |             | Fair Value Measurement Levels at December 31, 2010 |   |    | Total Gains (Losses) Reported Through: |    |
|----------------------------------------|--------|------------------|---------------------------------------------------------|--------|---------|----------------------------------------|---------|
|  (in thousands)                   |   | December 31,2010 |                                                    |   | Level 1 |                                   |    | Level 2 |   |   | Level 3 |   |   | ContinuingOperations |   |   | DiscontinuedOperations |   |
| Assets:                                |   |             |                                                    |   |    |                                   |    |   |   |   |   |   |   |   |   |   |   |   |
| Loans held for sale                    |   | $                | 7,352                                                   |   |    | $                                      | − |   |   | $ | − |   |   | $ | 7,352 |   |   | $ | 19 |   |   | $ | − |   |
| Investments in unconsolidated ventures |   |             | 6,779                                                   |   |    |                                   | − |   |   |   | − |   |   |   | 6,779 |   |   |   | (2,652 | ) |   |   | − |   |

|                                     |   | March 31, 2011 |    |   | December 31, 2010 |   |
|------------------------------------------|--------|--------------------------|---------|--------|-----------------------------|--------|
| (in thousands)                      |   | MaximumExposure          |    |   | CarryingAmount              |   |   | MaximumExposure |   |   | CarryingAmount |   |
| Mortgage banking loss-sharing agreements |   | $                        | 806     |   |                        | $      | 463 |   |   | $ | 430 |   |   | $ | 379 |   |
| Indemnification contracts                |   |                     | 112,404 |   |                        |   | 2,116 |   |   |   | 112,404 |   |   |   | 2,198 |   |
| Other financial/payment guarantees       |   |                     | 8,284   |   |                        |   | 4,669 |   |   |   | 8,284 |   |   |   | 4,658 |   |
| Total                                    |   | $                        | 121,494 |   |                        | $      | 7,248 |   |   | $ | 121,118 |   |   | $ | 7,235 |   |

----

|                                                                |   |     |   | March 31, 2011 |   |
|---------------------------------------------------------------------|--------|----------|--------|----------------|--------|
| (in thousands)                                                      |   | NoteRef. |   | RestrictedCash |   |   | BondsAvailable-for-Sale |   |   | LoansReceivable |   |   | Investments inUnconsolidatedVentures andOther Assets |   |   | Investmentin PreferredStock |   |   | Total |   |
| Bonds held in securitization trusts and for securitization programs |   | A        |   | $              | 7,960  |   |   | $ | 1,086,249 |   |   | $ | − |   |   | $ | − |   |   | $ | − |   |   | $ | 1,094,209 |   |
| Notes payable, warehouse lending and lines of credit                |   | B        |   |           | 14,549 |   |   |   | 54,225 |   |   |   | 25,012 |   |   |   | 6,779 |   |   |   | 2,000 |   |   |   | 102,565 |   |
| Other                                                               |   | C        |   |           | 3,341  |   |   |   | 32,458 |   |   |   | − |   |   |   | 13,155 |   |   |   | − |   |   |   | 48,954 |   |
| Total                                                               |   |     |   | $              | 25,850 |   |   | $ | 1,172,932 |   |   | $ | 25,012 |   |   | $ | 19,934 |   |   | $ | 2,000 |   |   | $ | 1,245,728 |   |

|                                                                |   |     |   | December 31, 2010 |   |
|---------------------------------------------------------------------|--------|----------|--------|-----------------------------|--------|
| (in thousands)                                                 |   | NoteRef. |   | RestrictedCash              |   |   | Bonds Available-for-Sale |   |   | LoansReceivable |   |   | Investments inUnconsolidatedVentures andOther Assets |   |   | Investmentin PreferredStock |   |   | Total |   |
| Bonds held in securitization trusts and for securitization programs |   | A        |   | $                           | 7,577  |   |   | $ | 1,107,705 |   |   | $ | − |   |   | $ | − |   |   | $ | − |   |   | $ | 1,115,282 |   |
| Notes payable, warehouse lending and lines of credit                |   | B        |   |                        | 14,155 |   |   |   | 55,590 |   |   |   | 71,120 |   |   |   | 6,779 |   |   |   | 2,000 |   |   |   | 149,644 |   |
| Other                                                               |   | C        |   |                        | 3,255  |   |   |   | 33,885 |   |   |   | − |   |   |   | 12,527 |   |   |   | − |   |   |   | 49,667 |   |
| Total                                                               |   |     |   | $                           | 24,987 |   |   | $ | 1,197,180 |   |   | $ | 71,120 |   |   | $ | 19,306 |   |   | $ | 2,000 |   |   | $ | 1,314,593 |   |

| A.  | This represents assets held by bond securitization trusts as well as assets pledged as collateral for bond securitizations. |
|----------|-----------------------------------------------------------------------------------------------------------------------------|

| B.  | The Company pledges bonds, loans, investments in preferred stock and investments in affordable housing properties as collateral for notes payable, warehouse lending arrangements and line of credit borrowings. |
|----------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| C.  | The Company pledges collateral in connection with other liabilities, guarantees, derivative transactions, first loss positions and leases.  The Company may elect to pledge collateral on behalf of the Company’s customers in order to facilitate credit and other collateral requirements.  In addition, cash may be restricted for funding obligations. |
|----------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

| (in thousands)                          |   |   |   |
|-----------------------------------------|--------|--------|--------|
| 2011                                    |   | $      | 2,915  |   |
| 2012                                    |   |   | 3,859  |   |
| 2013                                    |   |   | 3,768  |   |
| 2014                                    |   |   | 2,626  |   |
| 2015                                    |   |   | 1,202  |   |
| Thereafter                              |   |   | 363    |   |
| Total minimum future rental commitments |   | $      | 14,733 |   |

----

|                                           |   | For the three months ended March 31, |    |
|------------------------------------------------|--------|--------------------------------------------------------------------|---------|
| (in thousands)                            |   | 2011                                                               |    |   | 2010 |   |
|                                           |   |                                                               |    |   |   |   |
| Net loss from continuing operations            |   | $                                                                  | (4,586  | ) |   | $ | (10,114 | ) |
| Net (loss) income from discontinued operations |   |                                                               | (110    | ) |   |   | 80 |   |
| Net loss to common shareholder                 |   | $                                                                  | (4,696  | ) |   | $ | (10,034 | ) |
|                                           |   |                                                               |    |   |   |   |   |   |
| Basic weighted-average shares (1)              |   |                                                               | 40,855  |   |   |   | 40,369 |   |
| Common stock equivalents                       |   |                                                               | − |   |   |   | − |   |
| Diluted weighted-average shares                |   |                                                               | 40,855  |   |   |   | 40,369 |   |

|   | (1) | Includes common shares issued and outstanding, as well as non-employee directors’ and employee deferred shares that have vested, but are not issued and outstanding. |
|--------|-----|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|            |   | Issue Date       |   | Number ofShares |   |   | LiquidationPreferencePer Share |   |      | DistributionRate |   | Next RemarketingDate |   | OptionalRedemption Date |
|-----------------|--------|-----------------------|--------|----------------------|--------|--------|-------------------------------------|--------|-----------|------------------|--------|---------------------------|--------|------------------------------|
| Series A-2 |   | October 19, 2004 |   |                 | 8      |   |                                | $      | 2,000,000 |             |   |                      | 4.90   | %                            | September 30, 2014 |   | September 30, 2014 |
| Series A-3      |   | November 4, 2005      |   |                 | 9      |   |                                |   | 2,000,000 |             |   |                      | 4.95   |                         | September 30, 2012 |   | September 30, 2012 |
| Series A-4      |   | November 4, 2005      |   |                 | 8      |   |                                |   | 2,000,000 |             |   |                      | 5.13   |                         | September 30, 2015 |   | September 30, 2015 |
| Series B-2 |   | October 19, 2004 |   |                 | 7      |   |                                |   | 2,000,000 |             |   |                      | 5.20   |                         | September 30, 2014 |   | September 30, 2014 |
| Series B-3      |   | November 4, 2005      |   |                 | 11     |   |                                |   | 2,000,000 |             |   |                      | 5.30   |                         | September 30, 2015 |   | September 30, 2015 |
| Series C   |   | October 19, 2004 |   |                 | 13     |   |                                |   | 1,000,000 |             |   |                      | 9.75   |                         | September 30, 2012 |   | September 30, 2012 |
| Series C-1 |   | October 19, 2004 |   |                 | 13     |   |                                |   | 1,000,000 |             |   |                      | 5.40   |                         | September 30, 2014 |   | September 30, 2014 |
| Series C-2 |   | October 19, 2004 |   |                 | 13     |   |                                |   | 1,000,000 |             |   |                      | 5.80   |                         | September 30, 2019 |   | September 30, 2019 |
| Series C-3      |   | November 4, 2005      |   |                 | 10     |   |                                |   | 1,000,000 |             |   |                      | 5.50   |                         | September 30, 2015 |   | September 30, 2015 |
| Series D        |   | November 4, 2005      |   |                 | 17     |   |                                |   | 2,000,000 |             |   |                      | 5.90   |                         | September 30, 2015 |   | September 30, 2020 |

----

| (in thousands)             |   | March 31,2011 |    |   | December 31,2010 |   |
|---------------------------------|--------|--------------------|---------|--------|-----------------------|--------|
| Noncontrolling interests in:    |   |               |    |   |                  |   |
| LIHTC Funds                     |   | $                  | 467,949 |   |                  | $      | 479,174 |   |
| Lower Tier Property Partnership |   |               | 3,486   |   |                  |   | 3,915 |   |
| South African Workforce Fund    |   |               | 84,526  |   |                  |   | 80,322 |   |
| Other consolidated entities     |   |               | 6,029   |   |                  |   | 6,145 |   |
| Total                           |   | $                  | 561,990 |   |                  | $      | 569,556 |   |

|                                                        |   | For the three months ended March 31, |   |
|-------------------------------------------------------------|--------|--------------------------------------|--------|
| (in thousands)                                              |   | 2011                                 |   |   | 2010 |   |
| Employees’ Stock-based Compensation plan              |   | $                                    | 16     |   |   | $ | 13 |   |
| Non-employee Directors’ Stock-based Compensation plan |   |                                 | 50     |   |   |   | 50 |   |
| Total                                                       |   | $                                    | 66     |   |   | $ | 63 |   |

----

| (in thousands, except per option data) |   | Number ofOptions |    |   | Weighted-averageExercisePrice perOption |   |    | Weighted-averageRemainingContractual Lifeper Option (in years) |   |   | AggregateIntrinsicValue |   |   |  PeriodEndLiability |    |
|-----------------------------------------------------------------|--------|-----------------------|---------|--------|----------------------------------------------|--------|---------|------------------------------------------------------------------------------------|--------|--------|-------------------------|--------|--------|--------------------------|---------|
| Outstanding at January 1, 2011                                  |   |                  | 1,145.0 |   |                                         | $      | 7.01    |                                                                               |   |   | 8.2                     |   |   | $                        | − |   |   | $ | 116 |   |
| Granted.                                                        |   |                  | − |   |                                         |   | − |                                                                               |   |   |                    |   |   |                     |    |   |   |   |   |   |
| Exercised                                                       |   |                  | − |   |                                         |   | − |                                                                               |   |   |                    |   |   |                     |    |   |   |   |   |   |
| Forfeited/Expired                                               |   |                  | − |   |                                         |   | − |                                                                               |   |   |                    |   |   |                     |    |   |   |   |   |   |
| Outstanding at March 31, 2011                                   |   |                  | 1,145.0 |   |                                         |   | 7.01    |                                                                               |   |   | 8.0                     |   |   |                     | − |   |   |   | 132 |   |
|                                                            |   |                  |    |   |                                         |   |    |                                                                               |   |   |                    |   |   |                     |    |   |   |   |   |   |
| Options Exercisable at:                                         |   |                  |    |   |                                         |   |    |                                                                               |   |   |                    |   |   |                     |    |   |   |   |   |   |
| March 31, 2011                                                  |   |                  | 695.0   |   |                                         | $      | 11.39   |                                                                               |   |   | 7.3                     |   |   | $                        | − |   |   |   |   |   |

| (in thousands)                 |   | Number of Shares |    |
|-------------------------------------|--------|----------------------------|---------|
| Unvested shares at January 1, 2011  |   |                       | 1.9     |   |
| Granted                             |   |                       | − |   |
| Forfeited                           |   |                       | − |   |
| Rescinded                           |   |                       | − |   |
| Vested                              |   |                       | (1.9    | ) |
| Unvested shares at March 31, 2011   |   |                       | − |   |
|                                |   |                       |    |   |
| Shares vested and expected to vest: |   |                       |    |   |
| March 31, 2011                      |   |                       | − |   |

----

| (in thousands, except per option data) |   | Number ofOptions |    |   | Weighted-averageExercisePrice perOption |   |    | Weighted-averageRemainingContractual Lifeper Option(in years) |   |   | AggregateIntrinsicValue |   |
|-----------------------------------------------------------------|--------|-----------------------|---------|--------|----------------------------------------------|--------|---------|------------------------------------------------------------------------------|--------|--------|-------------------------|--------|
| Outstanding at January 1, 2011                                  |   |                  | 59.0    |   |                                         | $      | 24.44   |                                                                         |   |   | 1.5                     |   |   | $ | − |   |
| Exercised                                                       |   |                  | − |   |                                         |   | – |                                                                         |   |   |                    |   |   |   |   |   |
| Expired/Forfeited                                               |   |                  | (15.0   | )      |                                         |   | – |                                                                         |   |   |                    |   |   |   |   |   |
| Outstanding at March 31, 2011 (1)                               |   |                  | 44.0    |   |                                         |   | 24.56   |                                                                         |   |   | 1.7                     |   |   |   | − |   |
|                                                            |   |                  |    |   |                                         |   |    |                                                                         |   |   |                    |   |   |   |   |   |
| Options Exercisable at:                                         |   |                  |    |   |                                         |   |    |                                                                         |   |   |                    |   |   |   |   |   |
| March 31, 2011                                                  |   |                  | 44.0    |   |                                         | $      | 24.56   |                                                                         |   |   | 1.7                     |   |   | $ | − |   |

| (1) | Includes options vested and expected to vest. |
|-----|-----------------------------------------------|

| (in thousands, except per share data) |   | RestrictedShare Grants |    |   | Weighted-average GrantDate Share Price |   |    | Deferred ShareGrants |   |   | Weighted-average GrantDate Share Price |   |   | Directors’ FeesExpense |   |
|----------------------------------------------------------------|--------|-----------------------------|---------|--------|-------------------------------------------------------|--------|---------|---------------------------|--------|--------|-------------------------------------------------------|--------|--------|-----------------------------------|--------|
| March 31, 2011                                                 |   |                        | 53,419  |   |                                                  | $      | 0.12    |                      |   |   | 160,256                                               |   |   | $                                 | 0.12   |   |   | $ | 50 |   |
| March 31 , 2010                                                |   |                        | − |   |                                                  |   | − |                      |   |   | 115,741                                               |   |   |                              | 0.22   |   |   |   | 50 |   |

----

|                                                                  |   | For the three months ended March 31, |    |
|-----------------------------------------------------------------------|--------|--------------------------------------------------------------------|---------|
| (in thousands)                                                   |   | 2011                                                               |    |   | 2010 |   |
|                                                                  |   |                                                               |    |   |   |   |
| Operations:                                                           |   |                                                               |    |   |   |   |
| Sublease income                                                       |   | $                                                                  | 369     |   |   | $ | 359 |   |
| Other income                                                          |   |                                                               | 83      |   |   |   | 294 |   |
| Rent expense                                                          |   |                                                               | (369    | ) |   |   | (596 | ) |
| Other expenses                                                        |   |                                                               | (202    | ) |   |   | (233 | ) |
| Other gains                                                           |   |                                                               | − |   |   |   | 240 |   |
| Equity in earnings from Lower Tier Property Partnerships              |   |                                                               | 9       |   |   |   | − |   |
| (Loss) income from operations                                         |   |                                                               | (110    | )  |   |   | 64 |   |
| Disposal:                                                             |   |                                                               |    |   |   |   |   |   |
| Net loss on discontinued operations                                   |   |                                                               | − |   |   |   | (35 | ) |
| Net loss on sale                                                      |   |                                                               | − |   |   |   | (35 | ) |
| Net (loss) income from discontinued operations                        |   |                                                               | (110    | )  |   |   | 29 |   |
|                                                                  |   |                                                               |    |   |   |   |   |   |
| Net loss allocable to noncontrolling interests                        |   |                                                               | − |   |   |   | 51 |   |
| Net (loss) income to common shareholders from discontinued operations |   | $                                                                  | (110    | )  |   | $ | 80 |   |

| (in thousands)                             |   | March 31,2011 |    |   | December 31,2010 |   |
|-------------------------------------------------|--------|--------------------|---------|--------|-----------------------|--------|
| LIHTC Funds                                     |   | $                  | 474,310 |   |                  | $      | 485,998 |   |
| Consolidated Lower Tier Property Partnerships   |   |               | 20,454  |   |                  |   | 20,763 |   |
| South African Workforce Fund                    |   |               | 87,283  |   |                  |   | 83,274 |   |
| Other                                           |   |               | 11,662  |   |                  |   | 11,960 |   |
| Total assets of consolidated funds and ventures |   | $                  | 593,709 |   |                  | $      | 601,995 |   |

----

| (in thousands)                                            |   | March 31,2011 |    |   | December 31,2010 |   |
|----------------------------------------------------------------|--------|--------------------|---------|--------|-----------------------|--------|
| Investments in unconsolidated Lower Tier Property Partnerships |   | $                  | 424,311 |   |                  | $      | 436,971 |   |
| Other assets of consolidated funds and ventures:               |   |               |    |   |                  |   |   |   |
| Cash, cash equivalents and restricted cash                     |   |               | 37,700  |   |                  |   | 36,082 |   |
| Real estate, net                                               |   |               | 20,024  |   |                  |   | 20,368 |   |
| South African Fund investments                                 |   |               | 81,993  |   |                  |   | 78,222 |   |
| Solar projects                                                 |   |               | 10,578  |   |                  |   | 10,719 |   |
| Other assets                                                   |   |               | 19,103  |   |                  |   | 19,633 |   |
| Total assets of consolidated funds and ventures                |   | $                  | 593,709 |   |                  | $      | 601,995 |   |

| (in thousands)                                         |   | March 31,2011 |      |   | December 31,2010 |   |
|-------------------------------------------------------------|--------|--------------------|-----------|--------|-----------------------|--------|
| LIHTC Funds:                                                |   |               |      |   |                  |   |
| Funds’ investment in Lower Tier Property Partnerships |   | $                  | 424,311   |   |                  | $      | 436,971 |   |
| Total assets of Lower Tier Property Partnerships (1)        |   | $                  | 1,460,628 |   |                  | $      | 1,461,505 |   |
| Total liabilities of Lower Tier Property Partnerships (1)   |   |               | 1,054,979 |   |                  |   | 1,049,244 |   |

|   | (1) | The assets of the Lower Tier Property Partnerships primarily represent real estate and the liabilities are predominantly mortgage debt. |
|--------|-----|-----------------------------------------------------------------------------------------------------------------------------------------|

----

| (in thousands)              |   | March 31,2011 |   |   | December 31,2010 |   |
|----------------------------------|--------|--------------------|--------|--------|-----------------------|--------|
| Building, furniture and fixtures |   | $                  | 26,274 |   |                  | $      | 26,272 |   |
| Accumulated depreciation         |   |               | (7,273 | )      |                  |   | (6,927 | ) |
| Land                             |   |               | 1,023  |   |                  |   | 1,023 |   |
| Total                            |   | $                  | 20,024 |   |                  | $      | 20,368 |   |

| (in thousands)                                                            |   | March 31,2011 |   |   | December 31,2010 |   |
|--------------------------------------------------------------------------------|--------|--------------------|--------|--------|-----------------------|--------|
| Liabilities of consolidated funds and ventures:                                |   |               |   |   |                  |   |
| Debt                                                                           |   | $                  | 3,677  |   |                  | $      | 3,709 |   |
| Unfunded equity commitments to unconsolidated Lower Tier Property Partnerships |   |               | 20,199 |   |                  |   | 20,970 |   |
| Other liabilities                                                              |   |               | 3,055  |   |                  |   | 3,136 |   |
| Total liabilities of consolidated funds and ventures                           |   | $                  | 26,931 |   |                  | $      | 27,815 |   |

|                |   | March 31, 2011 |
|---------------------|--------|--------------------------|
| (in thousands) |   | CarryingAmount           |   |   | Face Amount |   |   | Weighted-average Interest Rates |   | Maturity Dates |
| Solar Fund debt     |   | $                        | 3,677 |   |   | $ | 3,677 |   |   |   | 8.3 | %(1) | Various dates through December 2022 |

|   | (1) | This debt is also entitled to a portion of the Company’s development and other fees as contingent interest.  Since inception, $0.1 million of contingent interest has been paid. |
|--------|-----|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|                |   | December 31, 2010 |
|---------------------|--------|-----------------------------|
| (in thousands) |   | CarryingAmount              |   |   | Face Amount |   |   | Weighted-average Interest Rates |   | Maturity Dates |
| Solar Fund debt     |   | $                           | 3,709 |   |   | $ | 3,709 |   |   |   | 8.3 | % (1) | Various dates through December 2022 |

|   | (1) | This debt is also entitled to a portion of the Company’s development and other fees as contingent interest.  Since inception, $0.1 million of contingent interest has been paid. |
|--------|-----|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

|                                                                                                               |   | For the three months endedMarch 31, |   |
|--------------------------------------------------------------------------------------------------------------------|--------|--------------------------------------------------------------|--------|
| (in thousands)                                                                                                     |   | 2011                                                         |   |   | 2010 |   |
| Revenue:                                                                                                           |   |                                                         |   |   |   |   |
| Solar fund revenue                                                                                                 |   | $                                                            | 142    |   |   | $ | 169 |   |
| Rental and other income from real estate                                                                           |   |                                                         | 335    |   |   |   | 316 |   |
| Interest and other income                                                                                          |   |                                                         | 83     |   |   |   | 106 |   |
| Total revenue                                                                                                      |   |                                                         | 560    |   |   |   | 591 |   |
|                                                                                                               |   |                                                         |   |   |   |   |   |   |
| Expenses:                                                                                                          |   |                                                         |   |   |   |   |   |   |
| Depreciation and amortization                                                                                      |   |                                                         | 1,025  |   |   |   | 1,117 |   |
| Interest expense                                                                                                   |   |                                                         | 148    |   |   |   | 89 |   |
| Impairments and valuation adjustments                                                                              |   |                                                         | 3,728  |   |   |   | 2,742 |   |
| Other operating expenses                                                                                           |   |                                                         | 438    |   |   |   | 1,166 |   |
| Total expenses                                                                                                     |   |                                                         | 5,339  |   |   |   | 5,114 |   |
|                                                                                                               |   |                                                         |   |   |   |   |   |   |
| Equity in losses from Lower Tier Property Partnerships of consolidated funds and ventures                          |   |                                                         | (7,873 | ) |   |   | (12,291 | ) |
| Net losses allocable to noncontrolling interests from consolidated funds and ventures (from continuing operations) |   |                                                         | 14,266 |   |   |   | 13,779 |   |
| Net income (loss) allocable to the common shareholders                                                             |   | $                                                            | 1,614  |   |   | $ | (3,035 | ) |

----

| Item 2. | Management’s Discussion and Analysis of Financial Condition and Results of Operations |
|---------|---------------------------------------------------------------------------------------------|

|   | · | TEB’s leverage ratio was 59.3%, which was effectively at the incurrence limit of 60%; |
|--------|--------|---------------------------------------------------------------------------------------------|

|   | · | TEB’s liquidation preference ratios were at amounts that would restrict it from raising additional preferred equity on parity with the existing preferred shares outstanding; and |
|--------|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | TEB’s ability to distribute cash to MuniMae was and continues to be limited to Distributable Cash Flows (TEB’s net income adjusted to exclude the impact of non-cash items) and TEB does not have the ability to make redemptions of common stock or distributions to MuniMae other than Distributable Cash Flows (“Restricted Payments”) because the current liquidation preference ratios prohibit it. |
|--------|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

|   | · | Forbearance from the minimum net asset value requirement and the financial reporting requirement contained in the interest rate swap agreements until the earlier of June 30, 2012 or when TEB regains compliance with the leverage and liquidation incurrence ratios. |
|--------|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | The Company must post a portion of the distributions it receives on TEB’s common stock as follows: |
|--------|--------|----------------------------------------------------------------------------------------------------------|

|   | o | For quarterly distributions beginning in the fourth quarter of 2010 and continuing through to the third quarter of 2011, the Company will post restricted distributions equal to 50% of common distributions, less $0.8 million. |
|--------|---|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | o | For quarterly distributions beginning in the fourth quarter of 2011 and continuing until TEB is in compliance with both its leverage ratio and liquidation preference ratio, the Company will post restricted distributions equal to 50% of common distributions.  Once TEB is in compliance with its leverage ratio and liquidation preference ratios there will be no restrictions on common distributions. |
|--------|---|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|                                                          |   | For the three months endedMarch 31, |    |
|---------------------------------------------------------------|--------|--------------------------------------------------------------|---------|
| (in thousands)                                                |   | 2011                                                         |    |   | 2010 |   |
| Unrestricted cash and cash equivalents at beginning of period |   | $                                                            | 32,544  |   |   | $ | 18,084 |   |
| Net cash provided by (used in):                               |   |                                                         |    |   |   |   |   |   |
| Operating activities                                          |   |                                                         | 4,625   |   |   |   | 16,606 |   |
| Investing activities                                          |   |                                                         | 62,775  |   |   |   | (13,845 | ) |
| Financing activities                                          |   |                                                         | (65,918 | ) |   |   | (4,254 | ) |
| Net increase (decrease) in cash and cash equivalents          |   |                                                         | 1,482   |   |   |   | (1,493 | ) |
| Unrestricted cash and cash equivalents at end of period       |   | $                                                            | 34,026  |   |   | $ | 16,591 |   |

----

| (dollars in thousands)                            |   | March 31,2011 |      |   | Weighted-AverageInterest Rate atPeriod-End |   |
|-------------------------------------------------------------|--------|--------------------|-----------|--------|------------------------------------------------------|--------|
| Debt related to bond investing activities (1):              |   |               |      |   |                                                 |   |
| Senior interests and debt owed to securitization trusts (2) |   | $                  | 729,910   |   |                                                 |   | 0.7 | % |
| Mandatorily redeemable preferred shares (3)                 |   |               | 128,406   |   |                                                 |   | 8.5 |   |
| Notes payable and other debt (4)                            |   |               | 72,513    |   |                                                 |   | 6.7 |   |
| Total bond related debt                                     |   |               | 930,829   |   |                                                 |   |   |   |
|                                                        |   |               |      |   |                                                 |   |   |   |
| Non-bond related debt:                                      |   |               |      |   |                                                 |   |   |   |
| Notes payable and other                                     |   |               | 92,609    |   |                                                 |   | 8.7 |   |
| Subordinated debentures (5)                                 |   |               | 186,617   |   |                                                 |   | 8.8 |   |
| Total non-bond related debt                                 |   |               | 279,226   |   |                                                 |   |   |   |
|                                                        |   |               |      |   |                                                 |   |   |   |
| Total debt                                                  |   | $                  | 1,210,055 |   |                                                 |   |   |   |

|   | (1) | Debt related to bond investing activities is debt that is either collateralized or securitized with bonds or other debt obligations of TEB and TEI. |
|--------|-----|-----------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (2) | We also incur on-going fees related to credit enhancement, liquidity, custodian, trustee and remarketing as well as upfront debt issuance costs, which when added to the weighted average interest rate brings the overall weighted average interest expense to 1.9% at March 31, 2011. |
|--------|-----|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (3) | Included in mandatorily redeemable preferred shares are unamortized discounts of $4.2 million at March 31, 2011. |
|--------|-----|------------------------------------------------------------------------------------------------------------------|

|   | (4) | Included in notes payable and other debt are unamortized discounts of $1.8 million at March 31, 2011. |
|--------|-----|-------------------------------------------------------------------------------------------------------|

|   | (5) | Included in subordinated debentures are unamortized discounts of $10.1 million at March 31, 2011. |
|--------|-----|---------------------------------------------------------------------------------------------------|

----

----

|                                         |   | March 31, 2011 |    |
|----------------------------------------------|--------|--------------------------|---------|
| (in thousands)                          |   | MaximumExposure          |    |   | CarryingAmount |   |
| Mortgage banking loss-sharing agreements (1) |   | $                        | 806     |   |   | $ | 463 |   |
| Indemnification contracts (2)                |   |                     | 112,404 |   |   |   | 2,116 |   |
| Other financial/payment guarantees (3)       |   |                     | 8,284   |   |   |   | 4,669 |   |
|                                         |   | $                        | 121,494 |   |   | $ | 7,248 |   |

| (1) | As part of the sale of our Agency Lending business, we effectively retained the DUS obligation related to specific loans. |
|-----|---------------------------------------------------------------------------------------------------------------------------|

| (2) | We have entered into indemnification contracts with investors in certain LIHTC Funds, that effectively guarantees the expected investor yields and we have guarantees related to specific property performance on a portion of the properties in these LIHTC Funds. We had no cash payments under these indemnification agreements for the three months ended March 31, 2011. |
|-----|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (3) | We have entered into arrangements that require us to make payments in the event that a third party fails to perform on its financial obligations.  Generally, we provide these guarantees in conjunction with the sale or placement of an asset with a third party.  The terms of such guarantees vary based on the performance of the asset. |
|-----|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|                             |   | March 31, 2011 |
|----------------------------------|--------|--------------------------|
| (dollars in thousands) |   | CarryingAmount           |   |   | Face Amount |   |   | Weighted-average Interest Rates |   | Maturity Dates |
| Solar Fund debt                  |   | $                        | 3,677 |   |   | $ | 3,677 |   |   |   | 8.3 | % (1) | Various dates through December 2022 |

|   | (1) | This debt is also entitled to a portion of our development and other fees as contingent interest.  Since inception, $0.1 million of contingent interest has been paid. |
|--------|-----|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

----

|   | · | the borrower’s overall financial condition and historical payment record; |
|--------|--------|---------------------------------------------------------------------------------|

|   | · | the prospects for support from any financially responsible guarantors; and |
|--------|--------|----------------------------------------------------------------------------|

|   | · | the net realizable value of any collateral, if appropriate. |
|--------|--------|-------------------------------------------------------------|

| Table 1                                                                              |   | For the three monthsended March 31, |    |
|-------------------------------------------------------------------------------------------|--------|--------------------------------------------------------------|---------|
| (in thousands)                                                                       |   | 2011                                                         |    |   | 2010 |   |
| Revenue:                                                                                  |   |                                                         |    |   |   |   |
| Total interest income                                                                     |   | $                                                            | 21,863  |   |   | $ | 23,264 |   |
| Total fee and other income                                                                |   |                                                         | 2,344   |   |   |   | 3,630 |   |
| Total revenue from consolidated funds and ventures                                        |   |                                                         | 560     |   |   |   | 591 |   |
| Total revenue                                                                             |   |                                                         | 24,767  |   |   |   | 27,485 |   |
| Expenses:                                                                                 |   |                                                         |    |   |   |   |   |   |
| Interest expense                                                                          |   |                                                         | 15,098  |   |   |   | 18,077 |   |
| Operating expenses                                                                        |   |                                                         | 8,405   |   |   |   | 11,928 |   |
| Impairment on bonds and provision for loan losses                                         |   |                                                         | 4,075   |   |   |   | 9,901 |   |
| Total expenses from consolidated funds and ventures                                       |   |                                                         | 5,339   |   |   |   | 5,114 |   |
| Total expenses                                                                            |   |                                                         | 32,917  |   |   |   | 45,020 |   |
| Net (losses) gains on asset sales, derivatives and extinguishment of liabilities          |   |                                                         | (269    | ) |   |   | 8,382 |   |
| Equity in (losses) earnings from unconsolidated ventures                                  |   |                                                         | (6      | ) |   |   | 1 |   |
| Equity in losses from Lower Tier Property Partnerships of consolidated funds and ventures |   |                                                         | (7,873  | ) |   |   | (12,291 | ) |
| Loss from continuing operations before income taxes                                       |   |                                                         | (16,298 | ) |   |   | (21,443 | ) |
| Income tax (expense) benefit                                                              |   |                                                         | (112    | ) |   |   | 16 |   |
| (Loss) income from discontinued operations, net of tax                                    |   |                                                         | (110    | ) |   |   | 29 |   |
| Net loss                                                                                  |   |                                                         | (16,520 | ) |   |   | (21,398 | ) |
| (Income) loss allocable to noncontrolling interests:                                      |   |                                                         |    |   |   |   |   |   |
| Income allocable to perpetual preferred shareholders of a subsidiary company              |   |                                                         | (2,442  | ) |   |   | (2,466 | ) |
| Net losses allocable to noncontrolling interests in consolidated funds and ventures:      |   |                                                         |    |   |   |   |   |   |
| Related to continuing operations                                                          |   |                                                         | 14,266  |   |   |   | 13,779 |   |
| Related to discontinued operations                                                        |   |                                                         | − |   |   |   | 51 |   |
| Net loss to common shareholders                                                           |   | $                                                            | (4,696  | ) |   | $ | (10,034 | ) |

----

| Table 2                       |   | For the three monthsended March 31, |   |
|------------------------------------|--------|--------------------------------------------------------------|--------|
| (in thousands)                     |   | 2011                                                         |   |   | 2010 |   |
| Interest on bonds                  |   | $                                                            | 20,822 |   |   | $ | 21,120 |   |
| Interest on loans                  |   |                                                         | 1,011  |   |   |   | 2,111 |   |
| Interest on short-term investments |   |                                                         | 30     |   |   |   | 33 |   |
| Total interest income              |   | $                                                            | 21,863 |   |   | $ | 23,264 |   |

| Table 3                       |   | For the three monthsended March 31, |   |
|------------------------------------|--------|--------------------------------------------------------------|--------|
| (in thousands)                     |   | 2011                                                         |   |   | 2010 |   |
| Syndication fees                   |   | $                                                            | 16     |   |   | $ | 490 |   |
| Asset management and advisory fees |   |                                                         | 283    |   |   |   | 335 |   |
| Income on preferred stock          |   |                                                         | 1,557  |   |   |   | 1,671 |   |
| Other  income                 |   |                                                         | 488    |   |   |   | 1,134 |   |
| Total fee and other income         |   | $                                                            | 2,344  |   |   | $ | 3,630 |   |

----

| Table 4     |   | For the three monthsended March 31, |   |
|------------------|--------|--------------------------------------------------------------|--------|
| (in thousands)   |   | 2011                                                         |   |   | 2010 |   |
| Interest expense |   | $                                                            | 15,098 |   |   | $ | 18,077 |   |

| Table 5               |   | For the three monthsended March 31, |   |
|----------------------------|--------|--------------------------------------------------------------|--------|
| (in thousands)        |   | 2011                                                         |   |   | 2010 |   |
| Salaries and benefits      |   | $                                                            | 3,069  |   |   | $ | 3,416 |   |
| General and administrative |   |                                                         | 1,353  |   |   |   | 2,619 |   |
| Professional fees          |   |                                                         | 3,181  |   |   |   | 3,711 |   |
| Other expenses             |   |                                                         | 802    |   |   |   | 2,182 |   |
| Total operating expenses   |   | $                                                            | 8,405  |   |   | $ | 11,928 |   |

----

| Table 6                                                 |   | For the three monthsended March 31, |   |
|--------------------------------------------------------------|--------|--------------------------------------------------------------|--------|
| (in thousands)                                               |   | 2011                                                         |   |   | 2010 |   |
| Impairment on bonds                                          |   | $                                                            | 3,510  |   |   | $ | 6,434 |   |
| Provision for loan losses                                    |   |                                                         | 565    |   |   |   | 3,467 |   |
| Total impairment on bonds and provision for loan losses |   | $                                                            | 4,075  |   |   | $ | 9,901 |   |

| Table 7                                                                                 |   | For the three monthsended March 31, |   |
|----------------------------------------------------------------------------------------------|--------|--------------------------------------------------------------|--------|
| (in thousands)                                                                               |   | 2011                                                         |   |   | 2010 |   |
| Net (losses) gains on sale of bonds                                                          |   | $                                                            | (321   | ) |   | $ | 366 |   |
| Net (losses) gains on loans                                                                  |   |                                                         | (170   | ) |   |   | 3,017 |   |
| Net losses on derivatives                                                                    |   |                                                         | (71    | ) |   |   | (1,867 | ) |
| Net gains on early extinguishment of liabilities                                             |   |                                                         | 293    |   |   |   | 6,866 |   |
| Total net (losses) gains on bond sales, loans, derivatives and extinguishment of liabilities |   | $                                                            | (269   | ) |   | $ | 8,382 |   |

----

| Table 8                 |   | For the three monthsended March 31, |   |
|------------------------------|--------|--------------------------------------------------------------|--------|
| (in thousands)               |   | 2011                                                         |   |   | 2010 |   |
| Income tax (expense) benefit |   | $                                                            | (112   | ) |   | $ | 16 |   |

----

| Table 9                                                                                                       |   | For the three monthsended March 31, |   |
|--------------------------------------------------------------------------------------------------------------------|--------|--------------------------------------------------------------|--------|
| (in thousands)                                                                                                     |   | 2011                                                         |   |   | 2010 |   |
| Revenue:                                                                                                           |   |                                                         |   |   |   |   |
| Solar fund revenue                                                                                                 |   | $                                                            | 142    |   |   | $ | 169 |   |
| Rental and other income from real estate                                                                           |   |                                                         | 335    |   |   |   | 316 |   |
| Interest and other income                                                                                          |   |                                                         | 83     |   |   |   | 106 |   |
| Total revenue                                                                                                      |   |                                                         | 560    |   |   |   | 591 |   |
|                                                                                                               |   |                                                         |   |   |   |   |   |   |
| Expenses:                                                                                                          |   |                                                         |   |   |   |   |   |   |
| Depreciation and amortization                                                                                      |   |                                                         | 1,025  |   |   |   | 1,117 |   |
| Interest expense                                                                                                   |   |                                                         | 148    |   |   |   | 89 |   |
| Impairments and valuation adjustments                                                                              |   |                                                         | 3,728  |   |   |   | 2,742 |   |
| Other operating expenses                                                                                           |   |                                                         | 438    |   |   |   | 1,166 |   |
| Total expenses                                                                                                     |   |                                                         | 5,339  |   |   |   | 5,114 |   |
|                                                                                                               |   |                                                         |   |   |   |   |   |   |
| Equity in losses from Lower Tier Property Partnerships of consolidated funds and ventures                          |   |                                                         | (7,873 | ) |   |   | (12,291 | ) |
| Net losses allocable to noncontrolling interests from consolidated funds and ventures (from continuing operations) |   |                                                         | 14,266 |   |   |   | 13,779 |   |
| Net income (loss) allocable to the common shareholders                                                             |   | $                                                            | 1,614  |   |   | $ | (3,035 | ) |

| Table 10                                          |   | For the three monthsended March 31, |   |
|--------------------------------------------------------|--------|--------------------------------------------------------------|--------|
| (in thousands)                                         |   | 2011                                                         |   |   | 2010 |   |
| Asset management fees                                  |   | $                                                            | 1,750  |   |   | $ | 1,972 |   |
| Guarantee fees                                         |   |                                                         | 329    |   |   |   | 290 |   |
| Interest income                                        |   |                                                         | 220    |   |   |   | 220 |   |
| Equity in losses from Lower Tier Property Partnerships |   |                                                         | (750   | ) |   |   | (554 | ) |
| Other                                                  |   |                                                         | 65     |   |   |   | (4,963 | ) |
| Net income (loss) allocable to the common shareholders |   | $                                                            | 1,614  |   |   | $ | (3,035 | ) |

| Item 3. | Quantitative and Qualitative Disclosures About Market Risk |
|---------|------------------------------------------------------------|

----

| Item 4. | Controls and Procedures |
|---------|-------------------------|

----

| Item 1. | Legal Proceedings |
|---------|-------------------|

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

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

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

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

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

----

|                                 |   | MUNICIPAL MORTGAGE & EQUITY, LLC |
|--------------------------------------|--------|--------------------------------------|
|                                 |   |                                 |
|                                 |   | By:                                  |   | /s/ Michael L.  Falcone |
| Dated:   May 13, 2011 |   |                                 | Name: | Michael L.  Falcone |
|                                 |   |                                 | Title: | Chief Executive Officer and President (Principal Executive Officer) |

| By:    |   | /s/ Michael L.  Falcone                                                                              |   | May 13, 2011 |
|--------|--------|----------------------------------------------------------------------------------------------------------------|--------|--------------|
|   | Name:  | Michael L.  Falcone                                                                                  |   |         |
|   | Title: | Chief Executive Officer, President and Director(Principal Executive Officer)                                   |   |
|   |   |                                                                                                           |   |         |
| By:    |   | /s/ David Kay                                                                                                  |   | May 13, 2011 |
|   | Name:  | David Kay                                                                                                      |   |         |
|   | Title: | Chief Financial Officer and Executive Vice President(Principal Financial Officer and Chief Accounting Officer) |   |

----

| ExhibitNo. |   | Description                                                                                         |   | Incorporation by Reference |
|------------|--------|-----------------------------------------------------------------------------------------------------|--------|----------------------------|
|       |   |                                                                                                |   |                       |
| 31 .1      |   | Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. |   |                       |
|       |   |                                                                                                |   |                       |
| 31 .2      |   | Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. |   |                       |
|       |   |                                                                                                |   |                       |
| 32 .1      |   | Certification of Chief Executive Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. |   |                       |
|       |   |                                                                                                |   |                       |
| 32 .2      |   | Certification of Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. |   |                       |

----