UNITED
STATES


SECURITIES
AND EXCHANGE COMMISSION


WASHINGTON,
DC 20549




FORM
10-Q/A


(Amendment
No. 1)


x  OF THE
SECURITIES EXCHANGE ACT OF 1934
  For the
quarterly period ended September 30, 2009
  OR
  oTRANSITION REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934








For the
transition period from  
to ____________




Commission
file number 001-32216




NEW
YORK MORTGAGE TRUST, INC.


(Exact
Name of Registrant as Specified in Its Charter)





Maryland
              47-0934168(State
      or Other Jurisdiction of
                Incorporation
      or Organization)
              (I.R.S.
      Employer
                Identification
      No.)





52
Vanderbilt Avenue, Suite 403, New York, New York 10017


(Address
of Principal Executive Office) (Zip Code)




(212)
792-0107


(Registrant’s
Telephone Number, Including Area Code)




Indicate
by check mark whether the registrant (1) has filed all reports required to be
filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the
preceding 12 months (or for such shorter period that the registrant was required
to file such reports), and (2) has been subject to such filing requirements for
the past 90 days.


Yes x    No
o





Indicate
by check mark whether the registrant has submitted electronically and posted on
its corporate Web site, if any, every Interactive Data File required to be
submitted and posted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this
chapter) during the preceding 12 months (or for such shorter period that the
registrant was required to submit and post such files).


Yes o    No
o





Indicate
by check mark whether the registrant is a large accelerated filer, an
accelerated filer, a non-accelerated filer, or a smaller reporting
company.  See definitions of “large accelerated filers” “accelerated
filer” and “smaller reporting company” in Rule 12b-2 of the Exchange
Act.  (Check one.):





Large
      Accelerated Filer o
            Accelerated
      Filer o
            Non-Accelerated
      Filer x
            Smaller
      Reporting Company o





Indicate
by check mark whether the registrant is a shell company (as defined in Rule
12b-2 of the Exchange Act).


Yes o    No
x





The
number of shares of the registrant’s common stock, par value $.01 per share,
outstanding on November 3, 2009 was 9,419,094.









Explanatory
Note




New York
Mortgage Trust, Inc. (the “Registrant) is filing this amendment no. 1 (the
“Amendment”) to its Form 10-Q for the quarter ended September 30, 2009,
originally filed on November 6, 2009 (the “Original Filing”), to include certain
information that was inadvertently deleted from the Original Filing by the
Registrant’s EDGAR filing agent.  None of the corrections affect the
Registrant’s financial condition, cash flows or results of operations as
previously reported in the Registrant’s unaudited condensed consolidated
financial statements for the three and nine months ended September 30,
2009.  Except as described in this Explanatory Note, no other changes
have been made to the Original Filing, and this Amendment does not amend or
update any other information set forth in the Original Filing.  The
following summarizes the corrections made by this Amendment:
 
 ·
              Under
      “Part I. Financial Information. Item 1. Condensed Consolidated Financial
      Statements (unaudited)”, the Condensed Consolidated Statement of
      Stockholders’ Equity included herein now includes the line item “Increase
      in net unrealized gain on investment–available for sale
      securities”.
 
 ·
              Under
      “Part I. Financial Information. Item 1. Condensed Consolidated Financial
      Statements (unaudited)”, the Registrant corrected certain parentheticals
      in the Condensed Consolidated Statements of Operations and the Condensed
      Consolidated Statement of Stockholders’
Equity.
 
 In
addition, as required by Rule 12b-15 under the Securities Exchange Act of
1934, as amended, new certifications by the Registrant’s principal executive and
financial officer are filed as exhibits to this Amendment.









NEW
YORK MORTGAGE TRUST, INC.




FORM
10-Q




PART I. Financial
      Information
                  2Item 1.Condensed
      Consolidated Financial Statements (unaudited)
                  2CONDENSED
      CONSOLIDATED BALANCE SHEETS
                  2CONDENSED
      CONSOLIDATED STATEMENTS OF OPERATIONS
                  3CONDENSED
      CONSOLIDATED STATEMENT OF STOCKHOLDERS’ EQUITY
                  4CONDENSED
      CONSOLIDATED STATEMENTS OF CASH FLOWS
                  5NOTES
      TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                  6Item 2. Management’s
      Discussion and Analysis of Financial Condition and Results of
      Operations
                  25Item 3. Quantitative
      and Qualitative Disclosures about Market
      Risk
                  41Item 4. Controls
      and Procedures
                  46PART
      II. OTHER INFORMATION
                  47Item
      1A. Risk Factors
                  47Item
      6. Exhibits
                  47SIGNATURES
                  48




1




PART
I.  FINANCIAL INFORMATION




Item
1.Condensed Consolidated Financial Statements
(unaudited)




NEW
YORK MORTGAGE TRUST, INC. AND SUBSIDIARIES


CONDENSED
CONSOLIDATED BALANCE SHEETS




(amounts
in thousands, except share and per share amounts)


(unaudited)




September
      30,
                    2009
                  
                  
                  December 31,
                    2008ASSETSCash
      and cash equivalents
                  
                  $
                  22,403
                  
                  
                  $
                  9,387Restricted
      cash
                  
                  
                  3,359
                  
                  
                  
                  7,959Investment
      securities - available for sale, at fair value (including pledged
      securities of $208,327 and $456,506, respectively)
                  
                  
                  282,594
                  
                  
                  
                  477,416Accounts
      and accrued interest receivable
                  
                  
                  2,623
                  
                  
                  
                  3,095Mortgage
      loans held in securitization trusts (net)
                  
                  
                  290,940
                  
                  
                  
                  348,337Derivative
      assets
                  
                  
                  15
                  
                  
                  
                  22Prepaid
      and other assets
                  
                  
                  1,636
                  
                  
                  
                  1,230Assets
      related to discontinued operation
                  
                  
                  4,544
                  
                  
                  
                  5,854Total
      Assets
                  
                  $
                  608,114
                  
                  
                  $
                  853,300LIABILITIES
      AND STOCKHOLDERS’ EQUITYLiabilities:Financing
      arrangements, portfolio investments
                  
                  $
                  194,745
                  
                  
                  $
                  402,329Collateralized
      debt obligations
                  
                  
                  280,223
                  
                  
                  
                  335,646Derivative
      liabilities
                  
                  
                  3,025
                  
                  
                  
                  4,194Accounts
      payable and accrued expenses
                  
                  
                  5,095
                  
                  
                  
                  3,997Subordinated
      debentures (net)
                  
                  
                  44,823
                  
                  
                  
                  44,618Convertible
      preferred debentures (net)
                  
                  
                  19,814
                  
                  
                  
                  19,702Liabilities
      related to discontinued operation
                  
                  
                  2,240
                  
                  
                  
                  3,566Total
      liabilities
                  
                  
                  549,965
                  
                  
                  
                  814,052Commitments
      and ContingenciesStockholders’
      Equity:Common
      stock, $0.01 par value, 400,000,000 authorized, 9,419,094 and 9,320,094,
      shares issued and outstanding, respectively
                  
                  
                  94
                  
                  
                  
                  93Additional
      paid-in capital
                  
                  
                  144,838
                  
                  
                  
                  150,790Accumulated
      other comprehensive income/(loss)
                  
                  
                  8,853
                  
                  
                  
                  (8,521
                  )Accumulated
      deficit
                  
                  
                  (95,636
                  )
                  
                  
                  (103,114
                  )Total
      stockholders’ equity
                  
                  
                  58,149
                  
                  
                  
                  39,248Total
      Liabilities and Stockholders’ Equity
                  
                  $
                  608,114
                  
                  
                  $
                  853,300





See
notes to condensed consolidated financial statements.




2




NEW
YORK MORTGAGE TRUST, INC. AND SUBSIDIARIES


CONDENSED
CONSOLIDATED STATEMENTS OF OPERATIONS




(amounts
in thousands, except per share amounts)


(unaudited)




For
      the Three Months
                                          Ended
      September 30,
                                        
                                        
                                        For
      the Nine Months
                                          Ended
      September 30,2009
                                        
                                        
                                        2008
                                        
                                        
                                        2009
                                        
                                        
                                        2008REVENUE:Interest
      income-investment securities and loans held in securitization
      trusts
                                        
                                        $
                                        7,994
                                        
                                        
                                        $
                                        10,324
                                        
                                        
                                        $
                                        24,200
                                        
                                        
                                        $
                                        34,332Interest
      expense-investment securities and loans held in securitization
      trusts
                                        
                                        
                                        1,864
                                        
                                        
                                        
                                        6,692
                                        
                                        
                                        
                                        7,041
                                        
                                        
                                        
                                        23,997Net
      interest income from investment securities andloans held in securitization trusts
                                        
                                        
                                        6,130
                                        
                                        
                                        
                                        3,632
                                        
                                        
                                        
                                        17,159
                                        
                                        
                                        
                                        10,335Interest
      expense – subordinated debentures
                                        
                                        
                                        (785
                                        )
                                        
                                        
                                        (913
                                        )
                                        
                                        
                                        (2,417
                                        )
                                        
                                        
                                        (2,768
                                        )Interest
      expense – convertible preferred debentures
                                        
                                        
                                        (662
                                        )
                                        
                                        
                                        (537
                                        )
                                        
                                        
                                        (1,807
                                        )
                                        
                                        
                                        (1,612
                                        )Net
      interest income
                                        
                                        
                                        4,683
                                        
                                        
                                        
                                        2,182
                                        
                                        
                                        
                                        12,935
                                        
                                        
                                        
                                        5,955OTHER
      EXPENSE:Provision
      for loan losses
                                        
                                        
                                        (526
                                        )
                                        
                                        
                                        (7
                                        )
                                        
                                        
                                        (1,414
                                        )
                                        
                                        
                                        (1,462
                                        )Impairment
      loss on investment securities
                                        
                                        
                                        —
                                        
                                        
                                        
                                        —
                                        
                                        
                                        
                                        (119
                                        )
                                        
                                        
                                        —Realized
      gain (loss) on securities and related hedges
                                        
                                        
                                        359
                                        
                                        
                                        
                                        4
                                        
                                        
                                        
                                        623
                                        
                                        
                                        
                                        (19,927
                                        )Total
      other expense
                                        
                                        
                                        (167
                                        )
                                        
                                        
                                        (3
                                        )
                                        
                                        
                                        (910
                                        )
                                        
                                        
                                        (21,389
                                        )EXPENSE:Salaries
      and benefits
                                        
                                        
                                        473
                                        
                                        
                                        
                                        258
                                        
                                        
                                        
                                        1,486
                                        
                                        
                                        
                                        988Professional
      fees
                                        
                                        
                                        323
                                        
                                        
                                        
                                        367
                                        
                                        
                                        
                                        1,021
                                        
                                        
                                        
                                        1,065Management
      fees
                                        
                                        
                                        508
                                        
                                        
                                        
                                        186
                                        
                                        
                                        
                                        935
                                        
                                        
                                        
                                        479Insurance
                                        
                                        
                                        171
                                        
                                        
                                        
                                        275
                                        
                                        
                                        
                                        358
                                        
                                        
                                        
                                        668Other
                                        
                                        
                                        400
                                        
                                        
                                        
                                        349
                                        
                                        
                                        
                                        1,247
                                        
                                        
                                        
                                        1,626Total
      expenses
                                        
                                        
                                        1,875
                                        
                                        
                                        
                                        1,435
                                        
                                        
                                        
                                        5,047
                                        
                                        
                                        
                                        4,826INCOME
      (LOSS) FROM CONTINUING OPERATIONS
                                        
                                        
                                        2,641
                                        
                                        
                                        
                                        744
                                        
                                        
                                        
                                        6,978
                                        
                                        
                                        
                                        (20,260
                                        )Income
      from discontinued operation - net of tax
                                        
                                        
                                        236
                                        
                                        
                                        
                                        285
                                        
                                        
                                        
                                        500
                                        
                                        
                                        
                                        1,294NET
      INCOME (LOSS)
                                        
                                        $
                                        2,877
                                        
                                        
                                        $
                                        1,029
                                        
                                        
                                        $
                                        7,478
                                        
                                        
                                        $
                                        (18,966
                                        )Basic
      income (loss) per common share
                                        
                                        $
                                        0.31
                                        
                                        
                                        $
                                        0.11
                                        
                                        
                                        $
                                        0.80
                                        
                                        
                                        $
                                        (2.39
                                        )Diluted
      income (loss) per common share
                                        
                                        $
                                        0.30
                                        
                                        
                                        $
                                        0.11
                                        
                                        
                                        $
                                        0.78
                                        
                                        
                                        $
                                        (2.39
                                        )Dividends
      declared per common share
                                        
                                        $
                                        0.25
                                        
                                        
                                        $
                                        0.16
                                        
                                        
                                        $
                                        0.66
                                        
                                        
                                        $
                                        0.44Weighted
      average shares outstanding-basic
                                        
                                        
                                        9,406
                                        
                                        
                                        
                                        9,320
                                        
                                        
                                        
                                        9,349
                                        
                                        
                                        
                                        7,924Weighted
      average shares outstanding-diluted
                                        
                                        
                                        11,906
                                        
                                        
                                        
                                        9,320
                                        
                                        
                                        
                                        11,849
                                        
                                        
                                        
                                        7,924





See
notes to condensed consolidated financial statements.




3




NEW
YORK MORTGAGE TRUST, INC. AND SUBSIDIARIES


CONDENSED
CONSOLIDATED STATEMENT OF STOCKHOLDERS’ EQUITY




For
the nine months ended September 30, 2009




(dollar
amounts in thousands)


(unaudited)






Common
                Stock
              
              
              Additional
                Paid-In
                Capital
              
              
              Accumulated
      Deficit
              
              
              Accumulated
                Other
                Comprehensive
                Income/(Loss)
              
              
              Comprehensive
                Income
              
              
              TotalBalance,
      January 1, 2009
              
              $
              93
              
              
              $
              150,790
              
              
              $
              (103,114
              )
              
              $
              (8,521
              )
              
              
              
              
              $
              39,248Net
      income
              
              
              —
              
              
              
              —
              
              
              
              7,478
              
              
              
              —
              
              
              $
              7,478
              
              
              
              7,478Restricted
      Stock issuance
              
              
              1
              
              
              
              224
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              225Dividends
      declared
              
              
              —
              
              
              
              (6,176
              )
              
              
              —
              
              
              
              —
              
              
              
              —
              
              
              
              (6,176
              )Increase
      in net unrealized gain on investment – available for sale
      securities
              
              
              —
              
              
              
              —
              
              
              
              —
              
              
              
              15,335
              
              
              
              15,335
              
              
              
              15,335Reclassification
      of gain for sales of investment – available for sale
      securities
              
              
              —
              
              
              
              —
              
              
              
              —
              
              
              
              141
              
              
              
              141
              
              
              
              141Increase
      in fair value of derivative instruments utilized for cash flow
      hedges
              
              
              —
              
              
              
              —
              
              
              
              —
              
              
              
              1,898
              
              
              
              1,898
              
              
              
              1,898Comprehensive
      income
              
              
              —
              
              
              
              —
              
              
              
              —
              
              
              
              —
              
              
              $
              24,852Balance,
      September 30, 2009
              
              $
              94
              
              
              $
              144,838
              
              
              $
              (95,636
              )
              
              $
              8,853
              
              
              
              
              
              
              $
              58,149




See
notes to condensed consolidated financial statements.


4




NEW
YORK MORTGAGE TRUST, INC. AND SUBSIDIARIES


CONDENSED
CONSOLIDATED STATEMENTS OF CASH FLOWS




(dollar
amounts in thousands)


(unaudited)




For the Nine Months
      Ended
                            September
      30,2009
                          
                          
                          2008Cash
      Flows from Operating Activities:Net
      income (loss)
                          
                          $
                          7,478
                          
                          
                          $
                          (18,966
                          )Adjustments
      to reconcile net loss to net cash provided by operating
      activities:Depreciation
      and amortization
                          
                          
                          1,069
                          
                          
                          
                          1,044Accretion/amortization
      of discount/premium on investment securities and mortgage loans held in
      securitization trusts
                          
                          
                          (126
                          )
                          
                          
                          819Realized
      (gain) loss on securities and related hedges
                          
                          
                          (623
                          )
                          
                          
                          19,927Impairment
      loss on investment securities
                          
                          
                          119
                          
                          
                          
                          —Provision
      for loan losses
                          
                          
                          1,414
                          
                          
                          
                          1,520Loans
      held for sale lower of cost or market adjustments
                          
                          
                          307
                          
                          
                          
                          —Restricted
      stock compensation expense
                          
                          
                          224
                          
                          
                          
                          —Changes
      in operating assets and liabilities:Proceeds
      from sales or repayments of mortgage loans held for sale
                          
                          
                          975
                          
                          
                          
                          2,732Accounts
      and accrued interest receivable
                          
                          
                          480
                          
                          
                          
                          48Prepaid
      and other assets
                          
                          
                          (409
                          )
                          
                          
                          207Due
      to loan purchasers
                          
                          
                          (192
                          )
                          
                          
                          117Accounts
      payable and accrued expenses
                          
                          
                          (1,297
                          )
                          
                          
                          (1,221
                          )Net
      cash provided by operating activities
                          
                          
                          9,419
                          
                          
                          
                          6,227Cash
      Flows from Investing Activities:Decrease
      in restricted cash
                          
                          
                          4,600
                          
                          
                          
                          7,237Purchases
      of investment securities
                          
                          
                          (43,440
                          )
                          
                          
                          (850,609
                          )Proceeds
      from sales of investment securities
                          
                          
                          198,494
                          
                          
                          
                          625,986Principal
      repayments received on mortgage loans held in securitization
      trusts
                          
                          
                          55,473
                          
                          
                          
                          70,815Principal
      paydowns on investment securities - available for sale
                          
                          
                          56,453
                          
                          
                          
                          64,043Net
      cash provided by (used in) investing activities
                          
                          
                          271,580
                          
                          
                          
                          (82,528
                          )Cash
      Flows from Financing Activities:Proceeds
      from common stock issued (net)
                          
                          
                          —
                          
                          
                          
                          56,544Proceeds
      from convertible preferred debentures
 (net)
                          
                          
                          —
                          
                          
                          
                          19,590Payments
      from termination of swaps
                          
                          
                          —
                          
                          
                          
                          (8,333
                          )(Decrease)
      increase in financing arrangements
                          
                          
                          (207,584
                          )
                          
                          
                          90,581Dividends
      paid
                          
                          
                          (4,753
                          )
                          
                          
                          (2,610
                          )Payments
      made on collateralized debt obligations
                          
                          
                          (55,646
                          )
                          
                          
                          (71,672
                          )Net
      cash (used in) provided by financing activities
                          
                          
                          (267,983
                          )
                          
                          
                          84,100Net
      Increase in Cash and Cash Equivalents
                          
                          
                          13,016
                          
                          
                          
                          7,799Cash
      and Cash Equivalents - Beginning of Period
                          
                          
                          9,387
                          
                          
                          
                          5,508Cash
      and Cash Equivalents - End of Period
                          
                          $
                          22,403
                          
                          
                          $
                          13,307Supplemental
      Disclosure:Cash
      paid for interest
                          
                          $
                          10,092
                          
                          
                          $
                          28,030Non-Cash
      Financing Activities:Dividends
      declared to be paid in subsequent period
                          
                          $
                          2,355
                          
                          
                          $
                          1,491Restricted
      stock grants
                          
                          $
                          523
                          
                          
                          $
                          —




5




NEW
YORK MORTGAGE TRUST, INC. AND SUBSIDIARIES


NOTES
TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS


September
30, 2009


(unaudited)





1.
            Organization
      and Summary of Significant Accounting
Policies




Organization - New York
Mortgage Trust, Inc. together with its consolidated subsidiaries (“NYMT”, the
“Company”, “we”, “our”, and “us”) is a self-advised real estate investment
trust, or REIT, in the business of acquiring and managing primarily residential
adjustable rate mortgage-backed securities issued by a United States
government-sponsored enterprise (“GSE” or “Agency”), such as the Federal
National Mortgage Association (“Fannie Mae”) or the Federal Home Loan Mortgage
Corporation (“Freddie Mac”), and prime credit quality residential
adjustable-rate mortgage (“ARM”) loans, and/or prime ARM loans. We refer to
residential adjustable rate mortgage-backed securities throughout this Quarterly
Report on Form 10-Q as “RMBS” and RMBS issued by a GSE as “Agency RMBS”. We also
invest, although to a lesser extent, in certain alternative real estate related
and financial assets that present greater credit risk and less interest rate
risk than our current RMBS investments and prime ARM loans which may include,
among other things, non-Agency RMBS, certain non-rated residential mortgage
assets, commercial mortgage-backed securities, commercial real estate loans,
collateralized loan obligations and other similar investments.  We
refer to our investment in these alternative assets as our “alternative
investment strategy.” We seek attractive long-term investment returns by
investing our equity capital and borrowed funds in such securities. Our
principal business objective is to generate net income for distribution to our
stockholders resulting from the spread between the interest and other income we
earn on our interest-earning assets and the interest expense we pay on the
borrowings that we use to finance these assets, which we refer to as our net
interest income.




The
Company conducts its business through the parent company, NYMT, and several
subsidiaries, including special purpose subsidiaries established for loan
securitization purposes, a taxable REIT subsidiary ("TRS") and a qualified
REIT subsidiary ("QRS").  The Company conducts certain
of its operations related to its alternative investment strategy
through its wholly-owned TRS, Hypotheca Capital, LLC (“HC”), in order to
utilize, to the extent permitted by law, some or all of a net operating loss
carry-forward held in HC that resulted from the Company's exit from
the mortgage lending business.  Prior to March 31, 2007, the
Company conducted substantially all of its mortgage lending business
through HC.   The Company's wholly-owned QRS, New York
Mortgage Funding, LLC (“NYMF”), currently holds certain
mortgage-related assets under our principal investment strategy
for regulatory compliance purposes.  The Company also may conduct
certain of its operations related to its alternative investment strategy through
NYMF.  The Company consolidates all of its subsidiaries under generally
accepted accounting principles in the United States of America
(“GAAP”).





The
Company is organized and conducts its operations to qualify as a REIT for
federal income tax purposes. As such, the Company will generally not be subject
to federal income tax on that portion of its income that is distributed to
stockholders if it distributes at least 90% of its REIT taxable income to its
stockholders by the due date of its federal income tax return and complies with
various other requirements.





Basis of Presentation - The
condensed consolidated balance sheets at September 30, 2009 and December 31,
2008, the condensed consolidated statements of operations for the three and nine
months ended September 30, 2009 and 2008, the condensed consolidated statement
of stockholders’ equity for the nine months ended September 30, 2009 and the
condensed consolidated statements of cash flows for the nine months ended
September 30, 2009 and 2008 are unaudited.  In our opinion, all
adjustments (which include only normal recurring adjustments) necessary to
present fairly the financial position, results of operations and cash flows have
been made.  Certain information and footnote disclosures normally
included in financial statements prepared in accordance with GAAP have been
condensed or omitted in accordance with Article 10 of Regulation S-X and the
instructions to Form 10-Q.  These condensed consolidated financial
statements should be read in conjunction with the consolidated financial
statements and notes thereto included in our Annual Report on Form 10-K for the
year ended December 31, 2008, as filed with the Securities and Exchange
Commission (“SEC”).  The results of operations for the three and nine
months ended September 30, 2009 are not necessarily indicative of the operating
results for the full year.




The
accompanying condensed consolidated financial statements include our accounts
and those of our consolidated subsidiaries.  All significant
intercompany amounts have been eliminated.  The preparation of
financial statements in conformity with GAAP requires us to make estimates and
assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenues and expenses during the
reporting periods.  Actual results could differ from those
estimates.




6




New Accounting Pronouncements -In June 2009, the Financial Accounting Statements Board (“FASB”) issued
Statement of Financial Accounting Standards (“SFAS”) No. 168, The FASB
Accounting Standards Codification (Codification “ASC”) and the Hierarchy of GAAP
("SFAS No. 168").  SFAS No. 168 replaces SFAS No. 162, The Hierarchy of GAAP and
establishes the Codification as the single source of authoritative U.S. GAAP
recognized by the FASB to be applied by nongovernmental entities. SEC rules and
interpretive releases are also sources of authoritative GAAP for SEC
registrants.  SFAS No. 168 modifies the GAAP hierarchy to include only
two levels of GAAP: authoritative and non-authoritative.  SFAS No. 168
is effective for financial statements issued for fiscal years ending after
September 15, 2009 and interim periods within those fiscal years, and will
therefore became effective for us as of September 30, 2009. Due to the nature of
this pronouncement, we do not anticipate that the adoption of SFAS No. 168 will
have a material impact on our results of operations and financial
condition.





In June 2007, the Emerging Issues Task
Force (“EITF”) reached consensus on Issue No. 06-11, Accounting for Income Tax Benefits
of Dividends on Share-Based Payment Award.  EITF Issue
No. 06-11 requires that the tax benefit related to dividend equivalents
paid on restricted stock units that are expected to vest, be recorded as an
increase to additional paid-in capital.  The Company accounts for
this tax benefit as a reduction to income tax expense.  EITF Issue
No. 06-11 is to be applied prospectively for tax benefits on dividends
declared in fiscal years beginning after December 15, 2008.
The Company adopted the provisions of EITF Issue No. 06-11 during the
first quarter of 2009.  The adoption of EITF Issue No. 06-11 did
not have a material effect on the Company’s condensed consolidated financial
statements.  EITF issue No. 6-11 has been incorporated into ASC 718
Accounting for Income Tax
Benefits of Dividends on Share-Based Payment Awards.





In
December 2007, the Financial Accounting Statements Board (“FASB”) issued
Statement of Financial Accounting Standards (“SFAS”) No. 141, Business Combinations and
issued SFAS No. 141(R) Business
Combinations.  SFAS No. 141(R) broadens the guidance of SFAS
No. 141, extending its applicability to all transactions and other events in
which one entity obtains control over one or more other
businesses.  It broadens the fair value measurement and recognition of
assets acquired, liabilities assumed, and interests transferred as a result of
business combinations; and it stipulates that acquisition related costs be
generally expensed rather than included as part of the basis of the
acquisition.  SFAS No. 141(R) expands required disclosures to improve the
ability to evaluate the nature and financial effects of business
combinations.  SFAS No. 141(R) is effective for all transactions the
Company closes, on or after January 1, 2009.  The Company adopted SFAS No.
141(R) as of January 1, 2009 and it did not have a material impact on the
Company’s condensed consolidated financial statements. SFAS No. 141(R) has been
incorporated into ASC 805 Business
Combinations.




In March
2008, the FASB issued SFAS No. 161, Disclosures about Derivative
Instruments and Hedging Activities — an amendment of FASB Statement No.
133.SFAS No. 161 requires enhanced disclosures
about an entity’s derivative and hedging activities, and is effective for
financial statements the Company issues for fiscal years beginning after
November 15, 2008, with early application encouraged.  Because
SFAS No. 161 requires only additional disclosures concerning
derivatives and hedging activities, adoption of SFAS No. 161 did not
affect the Company’s financial condition, results of operations or cash flows.
The Company adopted SFAS No. 161 in the first quarter of 2009 and as a
result expanded the footnote disclosure included in the condensed consolidated
financial statements (see note 4).  SFAS No. 161 has been incorporated
into ASC 815 Derivatives and
Hedging.




In May
2008, the FASB issued FSP No. APB 14-1,Accounting for Convertible Debt
Instruments that may beSettled in Cash upon Conversion
(Including Partial Cash Settlement). The FSP requires the initial
proceeds from the sale of our convertible preferred debentures to be allocated
between a liability component and an equity component.  The resulting
discount would be amortized using the effective interest method over the period
the debt is expected to remain outstanding asadditional
interest expense.  The FSP No. APB 14-1 is effective for our fiscal
year beginning on January 1, 2009 and requires retrospective application. The
Company adopted FSP as of January 1, 2009 and it had no impact on the Company’s
condensed consolidated financial statements. FSP No. APB 14-1 has been
incorporated into ASC 470 Debt, with Conversion and Other
Options.




7




On
October 10, 2008, the FASB issued FSP SFAS No. 157-3, Determining the Fair Value of a
Financial Asset When the Market for That Asset Is Not Active “FSP
No. 157-3” clarifies the application of SFAS No. 157 in a market that is not
active and provides an example to illustrate key consideration in determining
the fair value of a financial asset when the market for that financial asset is
not active.  The issuance of FSP No. 157-3 did not have a significant
impact on the Company’s determination of fair value for its financial assets.
FSP SFAS No. 157-3 has been incorporated into ASC 820 Fair Value Measurements and
Disclosures.




In April
2009, the FASB issued FSP SFAS No. 157-4, Determining Fair Value When the
Volume and Level of Activity for the Asset or Liability Have Significantly
Decreased and Identifying Transactions That Are Not Orderly(“FSP No.
157-4”), to provide additional guidance for estimating fair value in accordance
with SFAS No. 157 when the volume and level of activity for the asset or
liability have significantly decreased as well as on identifying circumstances
that indicate that a transaction is not orderly. FSP No. 157-4 provides
additional guidance on determining fair value when the volume and level of
activity for the asset or liability have significantly decreased when compared
with normal market activity for the asset or liability (or similar assets or
liabilities). FSP No. 157-4 further amends SFAS No. 157 to require the
disclosure in interim and annual periods of the inputs and valuation
technique(s) used to measure fair value and a discussion of changes in valuation
techniques and related inputs, if any, during the period.  FSP No.
157-4 is effective for the Company’s interim and annual reporting periods ending
after June 15, 2009, and should be applied prospectively. The Company adopted
FSP SFAS No. 157-4 did not have a material impact on the Company’s condensed
consolidated financial statements. FSP SFAS No. 157-4 has been incorporated into
ASC 320Accounting for Debt
Securities After an Other-than-temporary Impairment.




In April
2009, the FASB issued FSP SFAS No. 115-2 and SFAS No. 124-2, Recognition and Presentation of
Other-Than-Temporary Impairments, which provides additional guidance on
the recognition, presentation and disclosure of losses in earnings for the
impairment of investments in debt securities when changes in fair value of those
securities are not regularly recognized in earnings (other-than-temporary
impairment for debt securities).  This FSP also requires additional
disclosures regarding expected cash flows, credit losses, and aging of
securities with unrealized losses. Under this FSP, an other than temporary
impairment is taken if the Company intends or is forced to sell the related debt
security before its anticipated recovery with any impairment charge recognized
in the statements of operations. Realized credit losses are also recognized in
the statement of operations. The FSP is effective for the Company’s interim and
annual reporting periods ending after June 15, 2009, and should be applied
prospectively. The Company adopted FSP SFAS No. 115-2 and FSP SFAS No. 124-2 and
it did not have a material impact on the Company’s condensed consolidated
financial statements. FSP SFAS No. 115-2 and SFAS No. 124-2 has been
incorporated into ASC 825 Financial Instruments, Fair Value
Option and ASC 270Interim Reporting.




In June
2009, the FASB issued SFAS No. 165, Subsequent Eventswhich is
effective for interim and annual periods ending after June 15,
2009.  SFAS No. 165 establishes general standards of accounting for
and disclosure of events that occur after the balance sheet date but before
financial statements are issued or are available to be issued. It requires the
disclosure of the date through which an entity has evaluated subsequent events
and the basis for that date. The Company adopted SFAS No. 165 in the second
quarter of 2009 and has evaluated all events or transactions through November 6,
2009. During this period, we did not have any material subsequent events that
impacted our consolidated financial statements. SFAS No. 165 has been
incorporated into ASC 855 Subsequent
Events.




In June 2009, the FASB issued SFAS
No. 166,Accounting for
Transfers of Financial Assets—an amendment of FASB Statement
No. 140(“SFAS
No. 166”), which amends the derecognition guidance in SFAS No. 140,Accounting for
Transfers and Servicing of Financial Assets and Extinguishments of Liabilities,eliminates the concept of
a “qualifying special-purpose entity” (“QSPE”) and requires more information
about transfers of financial assets, including securitization transactions as
well as a company’s continuing exposure to the risks related to transferred
financial assets. The SFAS No. 166 will update ASC 810Consolidation.SFAS No. 166 is effective for financial asset transfers occurring
after the beginning of an entity’s first fiscal year that begins after
November 15, 2009 and early adoption is prohibited. Management is currently evaluating the
impact on our consolidated financial statements of adopting SFAS
No. 166.




In June
2009, the FASB issued SFAS No. 167, Amendments to FASB Interpretation
No. 46(R) (“SFAS No. 167”), which amends the consolidation
guidance applicable to variable interest entities. The amendments will
significantly affect the overall consolidation analysis under FASB ASC 810,
Consolidation (“FASB
ASC 810”) and changes the way entities account for securitizations and special
purpose entities as a result of the elimination of the QSPE concept in SFAS
No.166. SFAS No. 167 is effective as of the beginning of the first fiscal
year that begins after November 15, 2009 and early adoption is prohibited.
Management is currently evaluating the impact of adopting SFAS
No. 167.




8




In August
2009, the FASB issued Accounting Standards Update (“ASU”) 2009-05Measuring Liabilities at Fair
Value. The update clarifies that the unadjusted quoted price for an
identical liability, when traded as an asset in an active market is a Level 1
measurement for the liability and provides guidance on the valuation techniques
to estimate fair value of a liability in the absence of a Level 1
measurement.  The update is effective for the first interim or annual
reporting period beginning after its issuance. The update did not have a
material effect on our consolidated financial statements.





2.Investment
Securities - Available for Sale




Investment
securities available for sale consist of the following as of September 30, 2009
(dollar amounts in thousands):




Amortized
                  Cost
                
                
                Unrealized
                  Gains
                
                
                Unrealized
                  Losses
                
                
                Carrying
                  ValueAgency
      RMBS (1)
                
                $
                218,202
                
                
                $
                6,687
                
                
                $
                —
                
                
                $
                224,889Non-Agency
      RMBS
                
                
                42,889
                
                
                
                4,133
                
                
                
                (2,637
                )
                
                
                44,385Collateralized
      Loan Obligations
                
                
                8,988
                
                
                
                4,332
                
                
                
                —
                
                
                
                13,320Total
                
                $
                270,079
                
                
                $
                15,152
                
                
                $
                (2,637
                )
                
                $
                282,594





(1)
            -  Agency
      RMBS only includes Fannie Mae securities at September 30,
      2009.




Investment
securities available for sale consist of the following as of December 31, 2008
(dollar amounts in thousands):




Amortized
                  Cost
                
                
                Unrealized
                  Gains
                
                
                Unrealized
                  Losses
                
                
                Carrying
                  ValueAgency
      RMBS (1)
                
                $
                454,653
                
                
                $
                1,316
                
                
                $
                (98
                )
                
                $
                455,871Non-Agency
      RMBS
                
                
                25,724
                
                
                
                —
                
                
                
                (4,179
                )
                
                
                21,545Total
                
                $
                480,377
                
                
                $
                1,316
                
                
                $
                (4,277
                )
                
                $
                477,416





(1)
            -  Agency
      RMBS carrying value included $354.4 million of Fannie Mae and $101.5
      million of Freddie Mac securities.




The
Company commenced its alternative investment strategy by purchasing $46.0
million face amount of CRATOS CLO I collateralized loan obligations (“CLO”) on
March 31, 2009 at a purchase price of approximately $9.0 million. This
transaction settled on April 7, 2009. This marked the Company’s first investment
under its alternative investment strategy.  In addition, during the
second and third quarters of 2009 the Company opportunistically purchased
approximately $45.0 million current par value of non-Agency RMBS at an average
cost of 60.2% of par.    The $45.0 million current par value
of non-Agency RMBS purchased were previously rated AAA (at issuance) and
represent the senior cashflows of the applicable deal structures.




During
March 2009, the Company determined that the Agency collateralized mortgage
obligations (“CMO”) floaters in its portfolio were no longer producing
acceptable returns and initiated a program for the purpose of disposing of these
securities. The Company disposed approximately $159.5 million in current par
value of Agency CMO floaters during March 2009, with the balance of the Agency
CMO floaters, or $34.3 million in current par value, in its portfolio being sold
in April 2009, for an aggregate disposition of approximately $193.8 million in
current par value of Agency CMO floaters and a net gain of approximately $0.1
million.  As a result of this sale program, the Company incurred an
additional impairment of $0.1 million in the quarter ended March 31, 2009 as the
Company intended to sell their Agency CMO floaters.




9




The
following tables set forth the stated reset periods and weighted average yields
of our investment securities at September 30, 2009 (dollar amounts in
thousands):




Less than 6 Months
                                                            
                                                            
                                                            More than 6
      Months
                                                              to 24 Months
                                                            
                                                            
                                                            More than 24
      Months
                                                              to 60 Months
                                                            
                                                            
                                                            TotalCarrying
                                                              Value
                                                            
                                                            
                                                            Weighted
                                                              Average
                                                              Yield
                                                            
                                                            
                                                            Carrying
                                                              Value
                                                            
                                                            
                                                            Weighted
                                                              Average
                                                              Yield
                                                            
                                                            
                                                            Carrying
                                                              Value
                                                            
                                                            
                                                            Weighted
                                                              Average
                                                              Yield
                                                            
                                                            
                                                            Carrying
                                                              Value
                                                            
                                                            
                                                            Weighted
                                                              Average
                                                              YieldAgency
      RMBS
                                                            
                                                            $
                                                            —
                                                            
                                                            
                                                            
                                                            —
                                                            
                                                            
                                                            $
                                                            94,064
                                                            
                                                            
                                                            
                                                            3.30
                                                            %
                                                            
                                                            $
                                                            130,825
                                                            
                                                            
                                                            
                                                            4.50
                                                            %
                                                            
                                                            $
                                                            224,889
                                                            
                                                            
                                                            
                                                            4.00
                                                            %Non-Agency
      RMBS
                                                            
                                                            
                                                            19,365
                                                            
                                                            
                                                            
                                                            8.47
                                                            %
                                                            
                                                            
                                                            8,597
                                                            
                                                            
                                                            
                                                            7.47
                                                            %
                                                            
                                                            
                                                            16,423
                                                            
                                                            
                                                            
                                                            12.52
                                                            %
                                                            
                                                            
                                                            44,385
                                                            
                                                            
                                                            
                                                            9.77
                                                            %CLO
                                                            
                                                            
                                                            13,320
                                                            
                                                            
                                                            
                                                            22.25
                                                            %
                                                            
                                                            
                                                            —
                                                            
                                                            
                                                            
                                                            —
                                                            
                                                            
                                                            
                                                            —
                                                            
                                                            
                                                            
                                                            —
                                                            
                                                            
                                                            
                                                            13,320
                                                            
                                                            
                                                            
                                                            22.25
                                                            %Total/Weighted
      Average
                                                            
                                                            $
                                                            32,685
                                                            
                                                            
                                                            
                                                            14.09
                                                            %
                                                            
                                                            $
                                                            102,661
                                                            
                                                            
                                                            
                                                            3.64
                                                            %
                                                            
                                                            $
                                                            147,248
                                                            
                                                            
                                                            
                                                            5.39
                                                            %
                                                            
                                                            $
                                                            282,594
                                                            
                                                            
                                                            
                                                            5.76
                                                            %




The
following table sets forth the stated reset periods and weighted average yields
of our investment securities at December 31, 2008 (dollar amounts in
thousands):




Less than 6 Months
                                                                                                
                                                                                                
                                                                                                More than 6
      Months
                                                                                                  to 24 Months
                                                                                                
                                                                                                
                                                                                                More than 24
      Months
                                                                                                  to 60 Months
                                                                                                
                                                                                                
                                                                                                TotalCarrying
                                                                                                  Value
                                                                                                
                                                                                                
                                                                                                Weighted
                                                                                                  Average
                                                                                                  Yield
                                                                                                
                                                                                                
                                                                                                Carrying
                                                                                                  Value
                                                                                                
                                                                                                
                                                                                                Weighted
                                                                                                  Average
                                                                                                  Yield
                                                                                                
                                                                                                
                                                                                                Carrying
                                                                                                  Value
                                                                                                
                                                                                                
                                                                                                Weighted
                                                                                                  Average
                                                                                                  Yield
                                                                                                
                                                                                                
                                                                                                Carrying
                                                                                                  Value
                                                                                                
                                                                                                
                                                                                                Weighted
                                                                                                  Average
                                                                                                  YieldAgency
      RMBS
                                                                                                
                                                                                                $
                                                                                                197,675
                                                                                                
                                                                                                
                                                                                                
                                                                                                8.54
                                                                                                %
                                                                                                
                                                                                                $
                                                                                                66,910
                                                                                                
                                                                                                
                                                                                                
                                                                                                3.69
                                                                                                %
                                                                                                
                                                                                                $
                                                                                                191,286
                                                                                                
                                                                                                
                                                                                                
                                                                                                4.02
                                                                                                %
                                                                                                
                                                                                                $
                                                                                                455,871
                                                                                                
                                                                                                
                                                                                                
                                                                                                5.99
                                                                                                %Non-Agency
      RMBS  (1)
                                                                                                
                                                                                                
                                                                                                21,476
                                                                                                
                                                                                                
                                                                                                
                                                                                                14.11
                                                                                                %
                                                                                                
                                                                                                
                                                                                                —
                                                                                                
                                                                                                
                                                                                                
                                                                                                —
                                                                                                
                                                                                                
                                                                                                
                                                                                                69
                                                                                                
                                                                                                
                                                                                                
                                                                                                16.99
                                                                                                %
                                                                                                
                                                                                                
                                                                                                21,545
                                                                                                
                                                                                                
                                                                                                
                                                                                                14.35
                                                                                                %Total/Weighted
      Average
                                                                                                
                                                                                                $
                                                                                                219,151
                                                                                                
                                                                                                
                                                                                                
                                                                                                9.21
                                                                                                %
                                                                                                
                                                                                                $
                                                                                                66,910
                                                                                                
                                                                                                
                                                                                                
                                                                                                3.69
                                                                                                %
                                                                                                
                                                                                                $
                                                                                                191,355
                                                                                                
                                                                                                
                                                                                                
                                                                                                4.19
                                                                                                %
                                                                                                
                                                                                                $
                                                                                                477,416
                                                                                                
                                                                                                
                                                                                                
                                                                                                6.51
                                                                                                %





(1)
            The
      NYMT retained securities includes $0.1 million of residual interests
      related to the NYMT 2006-1
transaction.




The
following table presents the Company’s investment securities available for sale
in an unrealized loss position, aggregated by investment category and length of
time that individual securities have been in a continuous unrealized loss
position at September 30, 2009.  (dollar amounts in
thousands):




Less
      than 12 Months
                                          
                                          
                                          Greater
      than 12 Months
                                          
                                          
                                          TotalCarrying
                                            Value
                                          
                                          
                                          Unrealized
                                            Losses
                                          
                                          
                                          Carrying
                                            Value
                                          
                                          
                                          Unrealized
                                            Losses
                                          
                                          
                                          Carrying
                                            Value
                                          
                                          
                                          Unrealized
                                            LossesNon-Agency
      RMBS
                                          
                                          $
                                          2,134
                                          
                                          
                                          $
                                          128
                                          
                                          
                                          $
                                          13,492
                                          
                                          
                                          $
                                          2,509
                                          
                                          
                                          $
                                          15,626
                                          
                                          
                                          $
                                          2,637Total
                                          
                                          $
                                          2,134
                                          
                                          
                                          $
                                          128
                                          
                                          
                                          $
                                          13,492
                                          
                                          
                                          $
                                          2,509
                                          
                                          
                                          $
                                          15,626
                                          
                                          
                                          $
                                          2,637







The
following table presents the Company’s investment securities available for sale
in an unrealized loss position, aggregated by investment category and length of
time that individual securities have been in a continuous unrealized loss
position at December 31, 2008.




Less
      than 12 Months
                                                              
                                                              
                                                              Greater
      than 12 Months
                                                              
                                                              
                                                              TotalCarrying
                                                                Value
                                                              
                                                              
                                                              Unrealized
                                                                Losses
                                                              
                                                              
                                                              Carrying
                                                                Value
                                                              
                                                              
                                                              Unrealized
                                                                Losses
                                                              
                                                              
                                                              Carrying
                                                                Value
                                                              
                                                              
                                                              Unrealized
                                                                LossesAgency
      RMBS
                                                              
                                                              $
                                                              9,406
                                                              
                                                              
                                                              $
                                                              98
                                                              
                                                              
                                                              $
                                                              —
                                                              
                                                              
                                                              $
                                                              —
                                                              
                                                              
                                                              $
                                                              9,406
                                                              
                                                              
                                                              
                                                              98Non-Agency
      RMBS
                                                              
                                                              
                                                              18,649
                                                              
                                                              
                                                              
                                                              4,179
                                                              
                                                              
                                                              
                                                              —
                                                              
                                                              
                                                              
                                                              —
                                                              
                                                              
                                                              
                                                              18,649
                                                              
                                                              
                                                              
                                                              4,179Total
                                                              
                                                              $
                                                              28,055
                                                              
                                                              
                                                              $
                                                              4,277
                                                              
                                                              
                                                              $
                                                              —
                                                              
                                                              
                                                              $
                                                              —
                                                              
                                                              
                                                              $
                                                              28,055
                                                              
                                                              
                                                              
                                                              4,277





10




As of
September 30, 2009 and the date of this filing, we either do not have the intent
to sell or we believe that it is more likely than not that we will not have to
sell our portfolio of securities which are currently in unrealized loss
positions for the foreseeable future.  In assessing the Company’s ability
to hold its securities, it considers the significance of each investment and the
amount of impairment, as well as the Company’s current and anticipated leverage
capacity and liquidity position.  In addition, the Company anticipates
collecting principal repayments in amounts sufficient to recover the amortized
cost of the related non-Agency RMBS and anticipates that credit losses will not
exceed the purchased discount. Should conditions change that would require us to
sell securities at a loss or for liquidity reasons, we may no longer be able to
assert that we will not have to sell our portfolio of securities which are
currently in an unrealized loss position for the foreseeable future, in which
case we would then be required to record impairment charges related to these
securities.




The
majority of the Company’s Agency RMBS that are classified as investment
securities available for sale are pledged as collateral for borrowings under
financing arrangements (see note 5).




3.Mortgage
Loans Held in Securitization Trusts (net)




Mortgage
loans held in securitization trusts (net) consist of the following as of
September 30, 2009 and December 31, 2008 (dollar amounts in
thousands):




September
      30,
                  2009
                
                
                December
      31,
                  2008Mortgage
      loans principal amount  (1)
                
                $
                291,423
                
                
                $
                347,546Deferred
      origination costs – net
                
                
                1,840
                
                
                
                2,197Reserve
      for loan losses
                
                
                (2,323
                )
                
                
                (1,406
                )Total
                
                $
                290,940
                
                
                $
                348,337




(1)
            Includes
      $1.3 million and $1.9 million in real estate owned through foreclosure as
      of September 30, 2009 and December 31, 2008,
  respectively.




Reserve for Loan losses - The
following table presents the activity in the Company’s reserve for loan losses
on mortgage loans held in securitization trusts for the nine months
ended September 30, 2009 and 2008 (dollar amounts in
thousands).




September
      30,2009
                
                
                2008Balance at
      beginning of period
                
                $
                1,406
                
                
                $
                1,647Provisions
      for loan losses
                
                
                1,414
                
                
                
                1,433Charge-offs
                
                
                (497
                )
                
                
                (1,674
                )Balance
      at the end of period
                
                $
                2,323
                
                
                $
                1,406





On an
ongoing basis, the Company evaluates the adequacy of its reserve for loan
losses.  The Company’s reserve for loan losses at September 30,
2009 was $2.3 million, representing 80 basis points of the outstanding principal
balance of loans held in securitization trusts as compared to 40 basis points as
of December 31, 2008.  As part of the Company’s reserve adequacy
analysis, management will access an overall level of reserves while also
assessing credit losses inherent in each non-performing mortgage loan held in
securitization trusts. These estimates involve the consideration of various
credit related factors, including but not limited to, current housing market
conditions, current loan to value ratios, collateral value,
delinquency status, borrower’s current economic and credit status
and other relevant factors.




All of
the Company’s mortgage loans held in securitization trusts are pledged as
collateral for the collateralized debt obligations (“CDO”) issued by the Company
(see note 6).  As of September 30, 2009, the Company’s net investment
in the securitization trusts, which is the maximum amount of the Company’s
investment that is at risk to loss and represents the difference between the
carrying amount of the loans and the amount of CDO’s outstanding, was $10.7
million.




11




The
following tables set forth delinquent mortgage loans in our securitization
trusts as of September 30, 2009 and December 31, 2008 (dollar amounts in
thousands):




September
      30, 2009Days
      Late
                                                                      
                                                                      
                                                                      Number
      of
                                                                        Delinquent
                                                                        Loans
                                                                      
                                                                      
                                                                      Total
                                                                        Dollar
      Amount
                                                                      
                                                                      
                                                                      %
      of Loan
                                                                        Portfolio30-60
                                                                      
                                                                      
                                                                      
                                                                      1
                                                                      
                                                                      
                                                                      $
                                                                      76
                                                                      
                                                                      
                                                                      
                                                                      0.03
                                                                      %61-90
                                                                      
                                                                      
                                                                      
                                                                      5
                                                                      
                                                                      
                                                                      
                                                                      3,219
                                                                      
                                                                      
                                                                      
                                                                      1.10
                                                                      %90+
                                                                      
                                                                      
                                                                      
                                                                      26
                                                                      
                                                                      
                                                                      
                                                                      13,145
                                                                      
                                                                      
                                                                      
                                                                      4.51
                                                                      %Real
      estate owned through foreclosure
                                                                      
                                                                      
                                                                      
                                                                      3
                                                                      
                                                                      
                                                                      
                                                                      1,260
                                                                      
                                                                      
                                                                      
                                                                      0.43
                                                                      %




December
      31, 2008Days
      Late
                                                        
                                                        Number
      of
                                                          Delinquent
                                                          Loans
                                                        
                                                        
                                                        Total
                                                          Dollar
                                                          Amount
                                                        
                                                        
                                                        %
      of
                                                          Loan
                                                          Portfolio30-60
                                                        
                                                        
                                                        3
                                                        
                                                        
                                                        $
                                                        1,363
                                                        
                                                        
                                                        
                                                        0.39
                                                        %61-90
                                                        
                                                        
                                                        1
                                                        
                                                        
                                                        
                                                        263
                                                        
                                                        
                                                        
                                                        0.08
                                                        %90+
                                                        
                                                        
                                                        13
                                                        
                                                        
                                                        
                                                        5,734
                                                        
                                                        
                                                        
                                                        1.65
                                                        %Real
      estate owned through foreclosure
                                                        
                                                        
                                                        4
                                                        
                                                        
                                                        
                                                        1,927
                                                        
                                                        
                                                        
                                                        0.55
                                                        %





4.Derivative
Instruments and Hedging Activities




The
Company enters into derivatives instruments to manage its interest rate risk
exposure. These derivative instruments include interest rate swaps and caps
entered into to reduce interest expense costs related to our repurchase
agreements, CDO’s and our subordinated debentures. The Company’s interest rate
swaps are designated as cash flow hedges against the benchmark interest rate
risk associated with its short term repurchase agreements.  There were
no costs incurred at the inception of our interest rate swaps, under which the
Company agrees to pay a fixed rate of interest and receive a variable interest
rate based on one month LIBOR, on the notional amount of the interest rate
swaps.  The Company’s interest rate swap notional amounts are based on
an amortizing schedule fixed at the start date of the
transaction.  The Company’s interest rate cap transactions are
designated as cashflow hedges against the benchmark interest rate risk
associated with the CDO’s and the subordinated debentures.  The
interest rate cap transactions were initiated with an upfront premium that is
being amortized over the life of the contract.




The
Company documents its risk-management policies, including objectives and
strategies, as they relate to its hedging activities, and upon entering into
hedging transactions, documents the relationship between the hedging instrument
and the hedged liability contemporaneously.  The Company assesses,
both at inception of a hedge and on an on-going basis, whether or not the hedge
is “highly effective” when using the matched term basis.




The
Company discontinues hedge accounting on a prospective basis and recognizes
changes in the fair value through earnings when:  (i) it is determined
that the derivative is no longer effective in offsetting cash flows of a hedged
item (including forecasted transactions); (ii) it is no longer probable that the
forecasted transaction will occur; or (iii) it is determined that designating
the derivative as a hedge is no longer appropriate.  The Company’s
derivative instruments are carried on the Company’s balance sheet at fair value,
as assets, if their fair value is positive, or as liabilities, if their fair
value is negative.  The Company’s derivative instruments are
designated as “cash flow hedges,” changes in their fair value are recorded in
accumulated other comprehensive income/(loss), provided that the hedges are
effective.  A change in fair value for any ineffective amount of the
Company’s derivative instruments would be recognized in earnings.  The
Company has not recognized any change in the value of its existing derivative
instruments through earnings as a result of ineffectiveness of any of its
hedges.




12





The
following table presents the fair value of derivative instruments and their
location in the Company’s condensed consolidated balance sheets at September 30,
2009 and December 31, 2008, respectively (amounts in thousands):





Derivative
      Designated as Hedging
                      
                      Balance
      Sheet Location
                      
                      September
      30,
                        2009
                      
                      
                      December
      31,
                        2008Interest
      Rate Caps
                      
                      Derivative
      Assets
                      
                      $
                      15
                      
                      
                      $
                      22Interest
      Rate Swaps
                      
                      Derivative
      Liabilities
                      
                      
                      3,025
                      
                      
                      
                      4,194





The
following table presents the impact of the Company’s derivative instruments on
the Company’s accumulated other comprehensive income/(loss) for the nine months
ended September 30, 2009 and 2008 (amounts in thousands):





Nine
      Months Ended September 30Derivative
      Designated as Hedging Instruments
                                              
                                              2009
                                              
                                              
                                              2008Accumulated
      other comprehensive income/(loss) for derivative
    instruments:Balance
      at beginning of the period
                                              
                                              $
                                              (5,560
                                              )
                                              
                                              $
                                              (1,951
                                              )Unrealized
      gain on interest rate caps
                                              
                                              
                                              729
                                              
                                              
                                              
                                              602Unrealized
      gain on interest rate swaps
                                              
                                              
                                              1,169
                                              
                                              
                                              
                                              1,481Reclassification
      adjustment for net gains/losses included in net income for
      hedges
                                              
                                              
                                              —
                                              
                                              
                                              
                                              —Balance
      at the end of the period
                                              
                                              $
                                              (3,662
                                              )
                                              
                                              $
                                              132





The
Company estimates that over the next 12 months, approximately $2.5 million
of the net unrealized losses on the interest rate swaps will be
reclassified from accumulated other comprehensive income/(loss) into
earnings.




The
following table details the impact of the Company’s interest rate swaps and
interest rate caps included in interest expense for the three and nine months
ended September 30, 2009 and 2008 (amounts in thousands):




Three
      Months ended September 30,
                
                
                Nine
      Months Ended September 30,2009
                
                
                2008
                
                
                2009
                
                
                2008Interest
      Rate Caps:Interest
      expense-investment securities and loans held in securitization
      trusts
                
                $
                157
                
                
                $
                171
                
                
                $
                485
                
                
                $
                528Interest
      expense-subordinated debentures
                
                
                90
                
                
                
                77
                
                
                
                252
                
                
                
                218Interest
      Rate Swaps:Interest
      expense-investment securities and loans held in securitization
      trusts
                
                
                799
                
                
                
                167
                
                
                
                2,464
                
                
                
                285







Interest Rate Swaps-The
Company is required to pledge assets under a bi-lateral margin arrangement,
including either cash or Agency RMBS, as collateral for its interest rate swaps,
whose collateral requirements vary by counterparty and change over time based on
the market value, notional amount, and remaining term of the interest rate swap
(“Swap”).  In the event the Company is unable to meet a margin call
under one of its Swap agreements, thereby causing an event of default or
triggering an early termination event under one of its Swap agreements, the
counterparty to such agreement may have the option to terminate all of such
counterparty’s outstanding Swap transactions with the Company. In addition,
under this scenario, any close-out amount due to the counterparty upon
termination of the counterparty’s transactions would be immediately payable by
the Company pursuant to the applicable agreement.  The Company
believes it was in compliance with all margin requirements under its Swap
agreements as of September 30, 2009 and December 31, 2008.  The
Company had $3.2 million and $4.2 million of restricted cash related to margin
posted for Swaps as of September 30, 2009 and December 31, 2008,
respectively.




The use
of interest rate swaps exposes the Company to counterparty credit risks in the
event of a default by a Swap counterparty. If a counterparty defaults under the
applicable Swap agreement the Company may be unable to collect payments to which
it is entitled under its Swap agreements, and may have difficulty collecting the
assets it pledged as collateral against such Swaps.  The Company
currently has in place with all outstanding Swap counterparties bi-lateral
margin agreements thereby requiring a party to post collateral to the Company
for any valuation deficit.  This arrangement is intended to limit the
Company’s exposure to losses in the event of a counterparty
default.




13




The
following table presents information about the Company’s interest rate swaps as
of September 30, 2009 and December 31, 2008 (amounts in thousands):




September
      30, 2009
                        
                        
                        December
      31, 2008Maturity(1)
                        
                        Notional
                          Amount
                        
                        
                        Weighted
      Average
                          Fixed
      Pay
                          Interest
      Rate
                        
                        
                        Notional
                          Amount
                        
                        
                        Weighted
      Average
                          Fixed
      Pay
                          Interest
      RateWithin
      30 Days
                        
                        $
                        2,260
                        
                        
                        
                        2.99
                        %
                        
                        $
                        2,960
                        
                        
                        
                        3.00
                        %Over
      30 days to 3 months
                        
                        
                        4,180
                        
                        
                        
                        2.99
                        
                        
                        
                        5,220
                        
                        
                        
                        3.00Over
      3 months to 6 months
                        
                        
                        5,770
                        
                        
                        
                        2.99
                        
                        
                        
                        7,770
                        
                        
                        
                        2.99Over
      6 months to 12 months
                        
                        
                        19,100
                        
                        
                        
                        2.98
                        
                        
                        
                        13,850
                        
                        
                        
                        2.99Over
      12 months to 24 months
                        
                        
                        54,700
                        
                        
                        
                        3.01
                        
                        
                        
                        48,640
                        
                        
                        
                        2.99Over
      24 months to 36 months
                        
                        
                        10,140
                        
                        
                        
                        3.01
                        
                        
                        
                        34,070
                        
                        
                        
                        3.03Over
      36 months to 48 months
                        
                        
                        17,760
                        
                        
                        
                        3.08
                        
                        
                        
                        7,560
                        
                        
                        
                        3.01Over
      48 months
                        
                        
                        —
                        
                        
                        
                        —
                        
                        
                        
                        17,200
                        
                        
                        
                        3.08Total
                        
                        $
                        113,910
                        
                        
                        
                        3.01
                        %
                        
                        $
                        137,270
                        
                        
                        
                        3.01
                        %





(1)
            The
      Company enters into scheduled amortizing interest rate swap transactions
      whereby the Company pays a fixed rate of interest and receives one month
      LIBOR.





Interest Rate Caps – Interest
rate caps are designated by the Company as cash flow hedges against interest
rate risk associated with the Company’s CDO’s and the subordinated debentures.
The interest rate caps associated with the CDO’s are amortizing contractual
notional schedules determined at origination and had $411.4 million and $456.9
million outstanding as of September 30, 2009 and December 31, 2008,
respectively.  These interest rate caps are utilized to cap the
interest rate on the CDO’s at a fixed-rate when one month LIBOR exceeds a
predetermined rate.  In addition, the Company has an interest rate cap
contract on $25.0 million of subordinated debentures that effectively caps three
month LIBOR at 3.75% until March 31, 2010.




5.Financing
Arrangements, Portfolio Investments




The
Company has entered into repurchase agreements with third party financial
institutions to finance its agency RMBS portfolio.  The repurchase
agreements are short-term borrowings that bear interest rates typically based on
a spread to LIBOR, and are secured by the securities which they
finance.  At September 30, 2009, the Company had repurchase agreements
with an outstanding balance of $194.7 million and a weighted average interest
rate of 0.39%.  As of December 31, 2008, the Company had repurchase
agreements with an outstanding balance of $402.3 million and a weighted average
interest rate of 2.62%.  At September 30, 2009 and December 31, 2008,
securities pledged by the Company as collateral for repurchase agreements had
estimated fair values of $208.3 million and $456.5 million,
respectively.  All outstanding borrowings under our repurchase
agreements mature within 30 days.  As of September 30, 2009,
the average days to maturity for all repurchase agreements are 25
days.  The Company had outstanding repurchase agreements with five
different financial institutions as of September 30, 2009 and six as of December
31, 2008.




As of
September 30, 2009, our Agency RMBS are financed with $194.7 million of
repurchase agreement funding with an advance rate of 93.6% that implies an
overall haircut of 6.4%.




14




As of
September 30, 2009, the Company had $22.4 million in cash and $74.3 million in
unencumbered investment securities to meet additional haircut or market
valuation requirements including $60.9 million of RMBS, of which $16.6 million
are Agency RMBS.




6.Collateralized
Debt Obligations




The
Company’s CDOs, which are recorded as liabilities on the Company’s balance
sheet, are secured by ARM loans pledged as collateral, which are recorded as
assets of the Company.  As of September 30, 2009 and December 31,
2008, the Company had CDOs outstanding of $280.2 million and $335.6 million,
respectively.  As of September 30, 2009 and December 31, 2008, the
current weighted average interest rate on these CDOs was 0.63% and 0.85%,
respectively.  The CDOs are collateralized by ARM loans with a
principal balance of $291.4 million and $347.5 million at September 30, 2009 and
December 31, 2008, respectively.  The Company retained the owner trust
certificates, or residual interest, for three securitizations, and, as of
September 30, 2009 and December 31, 2008, had a net investment in the
securitizations trusts after loan loss reserves of $10.7 million and $12.7
million, respectively.




The CDO
transactions include amortizing interest rate cap contracts with an aggregate
notional amount of $411.4 million as of September 30, 2009 and an aggregate
notional amount of $456.9 million as of December 31, 2008, which are recorded as
derivative assets of the Company.  The interest rate caps are carried
at fair value and totaled $14,535 as of September 30, 2009 and $18,575 as of
December 31, 2008, respectively.  The interest rate cap reduces
interest rate risk exposure on these transactions.




7.Discontinued
Operation




In
connection with the sale of our mortgage origination platform assets during the
quarter ended March 31, 2007, we classified our mortgage lending segment as a
discontinued operation.  As a result, we have reported revenues and
expenses related to the segment as a discontinued operation and the related
assets and liabilities as assets and liabilities related to a discontinued
operation for all periods presented in the accompanying condensed consolidated
financial statements.  Certain assets, such as the deferred tax asset,
and certain liabilities, such as subordinated debt and liabilities related to
lease facilities not sold, are part of our ongoing operations and accordingly,
we have not included these items as part of the discontinued
operation.




Balance
Sheet Data




The
components of assets related to the discontinued operation as of September 30,
2009 and December 31, 2008 are as follows (dollar amounts in
thousands):




September
      30,
                          2009
                        
                        
                        December
      31,
                          2008Accounts
      and accrued interest receivable
                        
                        $
                        20
                        
                        
                        $
                        26Mortgage
      loans held for sale (net)
                        
                        
                        4,096
                        
                        
                        
                        5,377Prepaid
      and other assets
                        
                        
                        428
                        
                        
                        
                        451Total assets
                        
                        $
                        4,544
                        
                        
                        $
                        5,854





The
components of liabilities related to the discontinued operation as of September
30, 2009 and December 31, 2008 are as follows (dollar amounts in
thousands):




September
      30,
                  2009
                
                
                December
      31,
                  2008Due
      to loan purchasers
                
                $
                354
                
                
                $
                708Accounts
      payable and accrued expenses
                
                
                1,886
                
                
                
                2,858Total liabilities
                
                $
                2,240
                
                
                $
                3,566





15





Statements
of Operations Data




The
statements of operations of the discontinued operation for the three and nine
months ended September 30, 2009 and 2008 are as follows (dollar amounts in
thousands):




Three
      Months
                    Ended
      September 30,
                  
                  Nine
      Months
                    Ended
      September 30,2009
                  
                  2008
                  
                  2009
                  
                  2008Revenues
                  
                  $
                  395
                  
                  
                  $
                  203
                  
                  
                  $
                  905
                  
                  
                  $
                  1,136Expenses
                  
                  
                  159
                  
                  
                  
                  (82
                  )
                  
                  
                  405
                  
                  
                  
                  (158
                  )Income
      from discontinued operation-net of tax
                  
                  $
                  236
                  
                  
                  $
                  285
                  
                  
                  $
                  500
                  
                  
                  $
                  1,294







8.Commitments
and Contingencies




Loans Sold to Investors - For loans originated and
sold by our discontinued mortgage lending business, the Company is not exposed
to long term credit risk.  In the normal course of business, however, the
Company is obligated to repurchase loans based on violations of representations
and warranties in the sale agreement, or early payment defaults.  The
Company did not repurchase any loans during the nine months ended September 30,
2009.




The
Company periodically receives repurchase requests based on alleged violations of
representations and warranties, each of which management reviews to determine,
based on management’s experience, whether such requests may reasonably be deemed
to have merit.  As of September 30, 2009, we had a total of $1.5
million of unresolved repurchase requests that management concluded may
reasonably be deemed to have merit against which the Company has a reserve of
approximately $0.3 million.  The reserve is based on one or more of
the following factors; historical settlement rates, property value securing the
loan in question and specific settlement discussions with third
parties.




Outstanding Litigation - The
Company is at times subject to various legal proceedings arising in the ordinary
course of business. As of September 30, 2009, the Company does not believe that
any of its current legal proceedings, individually or in the aggregate, will
have a material adverse effect on its operations, financial condition or
cash flows.




Leases - The Company leases
its corporate office and equipment under short-term lease agreements expiring at
various dates through 2013.  All such leases are accounted for as
operating leases.  Total lease expense for property and equipment
amounted to $0.1 million and $0.2 million for the three and nine months ended
September 30, 2009.




Letters of Credit – The
Company maintains a letter of credit in the amount of $0.2 million in lieu of a
cash security deposit for its current corporate headquarters, located at 52
Vanderbilt Avenue in New York City, for its landlord, Vanderbilt Associates I,
L.L.C, as beneficiary.  This letter of credit is secured by cash
deposited in a bank account maintained at JP Morgan Chase bank.






16




9.Concentrations
of Credit Risk




At
September 30, 2009, there were geographic concentrations of credit risk
exceeding 5% of the total loan balances within mortgage loans held in the
securitization trusts. At December 31, 2008, there were geographic
concentrations of credit risk exceeding 5% of the total loan balances within
mortgage loans held in the securitization trusts and retained interests in our
REMIC securitization, NYMT 2006-1, The Company sold all the retained interests
related to NYMT 2006-1 during the quarter ended September 30, 2009. At September
30, 2009 and December 31, 2008, the geographic concentrations of credit risk
exceeding 5% are as follows:




September
      30,
                      2009
                    
                    
                    December
      31,
                      2008New
      York
                    
                    
                    39.4
                    %
                    
                    
                    30.7
                    %Massachusetts
                    
                    
                    23.7
                    %
                    
                    
                    17.2
                    %New
      Jersey
                    
                    
                    8.3
                    %
                    
                    
                    6.0
                    %Florida
                    
                    
                    5.8
                    %
                    
                    
                    7.8
                    %




10.Fair
Value of Financial Instruments




The
Company has established and documented processes for determining fair
values.  Fair value is based upon quoted market prices, where
available.  If listed prices or quotes are not available, then fair
value is based upon internally developed models that primarily use inputs that
are market-based or independently-sourced market parameters, including interest
rate yield curves.




A
financial instrument’s categorization within the valuation hierarchy is based
upon the lowest level of input that is significant to the fair value
measurement.  The three levels of valuation hierarchy are defined as
follows:




Level 1 - inputs to the
valuation methodology are quoted prices (unadjusted) for identical assets or
liabilities in active markets.




Level 2 - inputs to the
valuation methodology include quoted prices for similar assets and liabilities
in active markets, and inputs that are observable for the asset or liability,
either directly or indirectly, for substantially the full term of the financial
instrument.




Level 3 - inputs to the
valuation methodology are unobservable and significant to the fair value
measurement.




The
following describes the valuation methodologies used for the Company’s financial
instruments measured at fair value, as well as the general classification of
such instruments pursuant to the valuation hierarchy.




a. Investment Securities Available
for Sale (RMBS) - Fair value for the RMBS in our portfolio is based on
quoted prices provided by dealers who make markets in similar financial
instruments. The dealers will incorporate common market pricing methods,
including a spread measurement to the Treasury curve or interest rate swap curve
as well as underlying characteristics of the particular security including
coupon, periodic and life caps, collateral type, rate reset period and seasoning
or age of the security. If quoted prices for a security are not reasonably
available from a dealer, the security will be re-classified as a Level 3
security and, as a result, management will determine the fair value based on
characteristics of the security that the Company receives from the issuer and
based on available market information. Management reviews all prices used in
determining valuation to ensure they represent current market conditions. This
review includes surveying similar market transactions, comparisons to interest
pricing models as well as offerings of like securities by dealers. The Company's
investment securities that are comprised of RMBS are valued based upon readily
observable market parameters and are classified as Level 2 fair
values.





b. Investment Securities Available
for Sale (CLO) - The fair value of the CLO notes, as of September 30,
2009, was based on management’s valuation determined by using a discounted
future cash flows model that management believes would be used by market
participants to value similar financial instruments. If a reliable market for
these assets develops in the future, management will consider quoted prices
provided by dealers who make markets in similar financial instruments in
determining the fair value of the CLO notes. The CLO notes are classified as
Level 3 fair values.




17





c. Interest Rate Swaps and
Caps - The fair value of interest rate swaps and caps are based on
using market accepted financial models as well as dealer quotes.  The
model utilizes readily observable market parameters, including treasury rates,
interest rate swap spreads and swaption volatility curves.  The
Company’s interest rate caps and swaps are classified as Level 2 fair
values.




The
following table presents the Company’s financial instruments measured at fair
value on a recurring basis as of September 30, 2009 and December 31, 2008 on the
condensed consolidated balance sheets (dollar amounts in
thousands):




Assets
      Measured at Fair Value on a Recurring Basis
                  at
      September 30, 2009Level 1
                
                
                Level 2
                
                
                Level 3
                
                
                TotalAssets
      carried at fair value:Investment
      securities available for sale
                
                $
                —
                
                
                $
                269,274
                
                
                $
                13,320
                
                
                $
                282,594Derivative
      assets (interest rate caps)
                
                
                —
                
                
                
                15
                
                
                
                —
                
                
                
                15Total
                
                $
                —
                
                
                $
                269,289
                
                
                $
                13,320
                
                
                $
                282,609




Liabilities
      carried at fair value:Derivative
      liabilities (interest rate swaps)
                
                $
                —
                
                
                $
                3,025
                
                
                $
                —
                
                
                $
                3,025Total
                
                $
                —
                
                
                $
                3,025
                
                
                $
                —
                
                
                $
                3,025
  Assets
      Measured at Fair Value on a Recurring Basis
                  at
      December 31, 2008Level 1
                
                
                Level 2
                
                
                Level 3
                
                
                TotalAssets
      carried at fair value:Investment
      securities available for sale
                
                $
                —
                
                
                $
                477,416
                
                
                $
                —
                
                
                $
                477,416Derivative
      assets (interest rate caps)
                
                
                —
                
                
                
                22
                
                
                
                —
                
                
                
                22Total
                
                $
                —
                
                
                $
                477,438
                
                
                $
                —
                
                
                $
                477,438




Liabilities
      carried at fair value:Derivative
      liabilities (interest rate swaps)
                
                $
                —
                
                
                $
                4,194
                
                
                $
                —
                
                
                $
                4,194Total
                
                $
                —
                
                
                $
                4,194
                
                
                $
                —
                
                
                $
                4,194




The
following table details changes in valuation for the Level 3 assets for the
three and nine months ended September 30, 2009 (amounts in
thousands):




Investment
securities available for sale




Three
      Months Ended
                                      September
      30, 2009
                                    
                                    
                                    Nine
      Months Ended
                                      September
      30, 2009Beginning
      Balance
                                    
                                    $
                                    8,988
                                    
                                    
                                    $
                                    —Total
      gains (realized/unrealized)Included
      in earnings (1)
                                    
                                    
                                    155
                                    
                                    
                                    
                                    260Included
      in other comprehensive income/(loss)
                                    
                                    
                                    4,177
                                    
                                    
                                    
                                    4,332Purchases
                                    
                                    
                                    —
                                    
                                    
                                    
                                    8,728Ending
      Balance
                                    
                                    $
                                    13,320
                                    
                                    
                                    $
                                    13,320




(1) - Amounts
included in interest income-investment securities and loans held in
securitizations trusts.


18




Any
changes to the valuation methodology are reviewed by management to ensure the
changes are appropriate.  As markets and products develop and the
pricing for certain products becomes more transparent, the Company continues to
refine its valuation methodologies.  The methods described above may
produce a fair value calculation that may not be indicative of net realizable
value or reflective of future fair values.  Furthermore, while the
Company believes its valuation methods are appropriate and consistent with other
market participants, the use of different methodologies, or assumptions, to
determine the fair value of certain financial instruments could result in a
different estimate of fair value at the reporting date.  The Company
uses inputs that are current as of each reporting date, which may include
periods of market dislocation, during which time price transparency may be
reduced.  This condition could cause the Company’s financial
instruments to be reclassified from Level 2 to Level 3 in future
periods.




The
following table presents assets measured at fair value on a non-recurring basis
as of September 30, 2009 and December 31, 2008 on the condensed consolidated
balance sheet (dollar amounts in thousands):




Assets
      Measured at Fair Value on a Non-Recurring Basis
                                                  at
      September 30, 2009Level 1
                                                
                                                
                                                Level 2
                                                
                                                
                                                Level 3
                                                
                                                
                                                TotalMortgage
      loans held for sale (Net)
                                                
                                                $
                                                —
                                                
                                                
                                                $
                                                —
                                                
                                                
                                                $
                                                4.096
                                                
                                                
                                                $
                                                4,096Mortgage
      loans held in securitization trusts (net) – impaired loans
    (1)
                                                
                                                $
                                                —
                                                
                                                
                                                $
                                                —
                                                
                                                
                                                $
                                                6,068
                                                
                                                
                                                $
                                                6,068(1)
      Includes $0.4 million in real estate owned through foreclosure.Assets
      Measured at Fair Value on a Non-Recurring Basis
                                                  at
      December 31, 2008Level 1
                                                
                                                
                                                Level 2
                                                
                                                
                                                Level 3
                                                
                                                
                                                TotalMortgage
      loans held for sale (net)
                                                
                                                $
                                                —
                                                
                                                
                                                $
                                                —
                                                
                                                
                                                $
                                                5,377
                                                
                                                
                                                $
                                                5,377Mortgage
      loans held in securitization trusts (net) – impaired loans
    (1)
                                                
                                                $
                                                —
                                                
                                                
                                                $
                                                —
                                                
                                                
                                                $
                                                2,958
                                                
                                                
                                                $
                                                2,958




(1)
Includes $0.5 million in real estate owned through foreclosure.





The
following table presents losses incurred for assets measured at fair value on a
non-recurring basis for the three and nine months ended September 30, 2009 and
September 30, 2008 on the condensed statements of operations (dollar amounts in
thousands):




Three
      Months Ended
                      
                      
                      Nine
      Months EndedSeptember
      30, 2009
                      
                      
                      September
      30, 2008
                      
                      
                      September
      30, 2009
                      
                      
                      September
      30, 2008Mortgage
      loans held for sale (net)
                      
                      $
                      —
                      
                      
                      $
                      34
                      
                      
                      $
                      245
                      
                      
                      $
                      433Mortgage
      loans held in securitization trusts (net) – impaired loans
                      
                      $
                      525
                      
                      
                      $
                      7
                      
                      
                      $
                      1,414
                      
                      
                      $
                      1,440





Mortgage Loans Held in
Securitization Trusts (net) – Impaired Loans – Impaired mortgage loans
held in the securitization trusts are recorded at amortized cost less specific
loan loss reserves. Impaired loan value is based on management’s estimate of the
net realizable value taking into consideration local market conditions of the
distressed property, updated appraisal values of the property and estimated
expenses required to remediate the impaired loan.





Mortgage Loans Held for Sale (net)–The fair value of mortgage loans held for sale (net) are estimated by
the Company based on the price that would be received if the loans were sold as
whole loans taking into consideration the aggregated characteristics of the
loans such as, but not limited to, collateral type, index, interest rate,
margin, length of fixed interest rate period, life cap, periodic cap,
underwriting standards, age and credit.




19





The
following table presents the carrying value and estimated fair value of the
Company’s financial instruments, at September 30, 2009 and December 31, 2008
(dollar amounts in thousands):





September
      30, 2009
                
                
                December
      31, 2008Carrying
                  Value
                
                
                Estimated
                  Fair
      Value
                
                
                Carrying
                  Value
                
                
                Estimated
                  Fair
      ValueFinancial
      assets:Cash
      and cash equivalents
                
                $
                22,403
                
                
                $
                22,403
                
                
                $
                9,387
                
                
                $
                9,387Restricted
      cash
                
                
                3,359
                
                
                
                3,359
                
                
                
                7,959
                
                
                
                7,959Investment
      securities – available for sale
                
                
                282,594
                
                
                
                282,594
                
                
                
                477,416
                
                
                
                477,416Mortgage
      loans held in securitization trusts (net)
                
                
                290,940
                
                
                
                266,189
                
                
                
                348,337
                
                
                
                343,028Derivative
      assets
                
                
                15
                
                
                
                15
                
                
                
                22
                
                
                
                22Assets
      related to discontinued operation-Mortgage loans held for sale
      (net)
                
                
                4,096
                
                
                
                4,096
                
                
                
                5,377
                
                
                
                5,377Financial
      Liabilities:Financing
      arrangements, portfolio investments
                
                
                194,745
                
                
                
                194,745
                
                
                
                402,329
                
                
                
                402,329Collateralized
      debt obligations
                
                
                280,223
                
                
                
                183,090
                
                
                
                335,646
                
                
                
                199,503Derivative
      liabilities
                
                
                3,025
                
                
                
                3,025
                
                
                
                4,194
                
                
                
                4,194Subordinated
      debentures (net)
                
                
                44,823
                
                
                
                24,067
                
                
                
                44,618
                
                
                
                10,049Convertible
      preferred debentures (net)
                
                
                19,814
                
                
                
                18,981
                
                
                
                19,702
                
                
                
                16,363





In
addition to the methodology to determine the fair value of the Company’s
financial assets and liabilities reported at fair value on a recurring basis and
non-recurring basis, as previously described, the following methods and
assumptions were used by the Company in arriving at the fair value of the
Company’s other financial instruments in the following table:





a.     Cash and cash equivalents and
restricted cash:Estimated fair value approximates the
carrying value of such assets.





b.     Mortgage Loans Held in
Securitization Trusts - Mortgage loans held in the securitization trusts
are recorded at amortized cost. Fair value is estimated using pricing models and
taking into consideration the aggregated characteristics of groups of loans such
as, but not limited to, collateral type, index, interest rate, margin, length of
fixed-rate period, life cap, periodic cap, underwriting standards, age and
credit estimated using the estimated market prices for similar types of
loans.





c.     Financing arrangements, portfolio
investments – The fair value of these financing arrangements approximates
cost as they are short term in nature and mature in 30 days.





d.     Collateralized debt obligations –The fair value of these collateralized debt obligations is based on
discounted cashflows as well as market pricing on comparable
obligations.





e.     Subordinated debentures (net) –The fair value of these subordinated debentures (net) is based on
discounted cashflows using management’s estimate for market yields.





f.     Convertible preferred debentures
(net) –The fair value of the convertible preferred debentures (net) is
based on discounted cashflows using management’s estimate for market
yields.







11.
Capital Stock and Earnings per Share




The
Company had 400,000,000 shares of common stock, par value $0.01 per share,
authorized with 9,419,094 and 9,320,094 shares issued and outstanding as of
September 30, 2009 and December 31, 2008, respectively.  The Company
had 200,000,000 shares of preferred stock, par value $0.01 per share,
authorized, including 2,000,000 shares of Series A Cumulative Convertible
Redeemable Preferred Stock (“Series A Preferred Stock”)
authorized.  As of September 30, 2009 and December 31, 2008, the
Company had issued and outstanding 1,000,000 shares, of Series A Preferred
Stock.  Of the common stock authorized at September 30,
2009, 4,111 shares were reserved for issuance as Restricted Stock awards to
employees, officers and directors pursuant to the 2005 Stock Incentive
Plan.




20




On
February 21, 2008, the Company completed the issuance and sale of 7.5 million
shares of its common stock in a private placement at a price of $8.00 per
share.  This private offering of the Company’s common stock generated net
proceeds to the Company of $56.5 million after payment of private placement fees
and expenses. The Company filed a resale shelf registration statement on
Form S-3 on April 4, 2008, registering for resale the 7.5 million shares issued
in February 2008, which became effective on April 18, 2008.




The Board
of Directors declared a one-for-two reverse stock split of the Company’s common
stock, effective on May 27, 2008, decreasing the number of shares then
outstanding to approximately 9.3 million shares. All per share and share amounts
provided in the quarterly report have been restated to give to effect the
reverse stock split.




The
following table presents cash dividends declared by the Company on its common
stock from January 1, 2008 through September 30, 2009.




Period
                  Declaration
      Date
                  Record
      Date
                  Payment
      Date
                  
                  Cash
                    Dividend
                    Per
      ShareThird
      Quarter 2009
                  September
      29, 2009
                  October
      13, 2009
                  October
      26, 2009
                  
                  $
                  0.25Second
      Quarter 2009
                  June
      15, 2009
                  June
      26, 2009
                  July
      27, 2009
                  
                  
                  0.23First
      Quarter 2009
                  March
      25, 2009
                  April
      6, 2009
                  April
      27, 2009
                  
                  
                  0.18Fourth
      Quarter 2008
                  December
      23, 2008
                  January
      7, 2009
                  January
      26, 2009
                  
                  $
                  0.10Third
      Quarter 2008
                  September
      26, 2008
                  October
      10, 2008
                  October
      27, 2008
                  
                  
                  0.16Second
      Quarter 2008
                  June
      30, 2008
                  July
      10, 2008
                  July
      25, 2008
                  
                  
                  0.16First
      Quarter 2008
                  April
      21, 2008
                  April
      30, 2008
                  May
      15,2008
                  
                  
                  0.12








The
following table presents cash dividends declared by the Company on its Series A
Preferred Stock from January 1, 2008 through September 30, 2009.




Period
                Declaration
      Date
                Record
      Date
                Payment
      Date
                
                Cash
                  Dividend
                  Per
      ShareThird
      Quarter 2009
                September
      29 , 2009
                September
      30, 2009
                October
      30, 2009
                
                $
                0.63Second
      Quarter 2009
                June
      15, 2009
                June
      30, 2009
                July
      30, 2009
                
                
                0.58First
      Quarter 2009
                March
      25, 2009
                March
      31, 2009
                April
      30, 2009
                
                
                0.50Fourth
      Quarter 2008
                December
      23, 2008
                December
      31, 2008
                January
      30,2009
                
                $
                0.50Third
      Quarter 2008
                September
      29, 2008
                September
      30, 2008
                October
      30, 2008
                
                
                0.50Second
      Quarter 2008
                June
      30, 2008
                June
      30, 2008
                July
      30, 2008
                
                
                0.50First
      Quarter 2008
                April
      21, 2008
                March
      31, 2008
                April
      30,2008
                
                
                0.50





The
Company calculates basic net income (loss) per share by dividing net income
(loss) for the period by the weighted-average shares of common stock outstanding
for that period.  Diluted net income (loss) per share takes into
account the effect of dilutive instruments, such as convertible preferred
stock, stock options and unvested restricted or performance stock, but uses
the average share price for the period in determining the number of incremental
shares that are to be added to the weighted-average number of shares
outstanding.




21




The
following table presents the computation of basic and diluted net income (loss)
per share for the periods indicated (in thousands, except per share
amounts):




For
      the Three Months Ended September 30,
                      
                      
                      For
      the Nine Months Ended September 30,2009
                      
                      
                      2008
                      
                      
                      2009
                      
                      
                      2008Numerator:Net
      income (loss) – Basic
                      
                      $
                      2,877
                      
                      
                      $
                      1,029
                      
                      
                      $
                      7,478
                      
                      
                      $
                      (18,966
                      )Net
      income (loss) from continuing operations
                      
                      
                      2,641
                      
                      
                      
                      744
                      
                      
                      
                      6,978
                      
                      
                      
                      (20,260
                      )Net
      income from discontinued operations (net of tax)
                      
                      
                      236
                      
                      
                      
                      285
                      
                      
                      
                      500
                      
                      
                      
                      1,294Effect
      of dilutive instruments:Convertible
      preferred debentures (1)
                      
                      
                      662
                      
                      
                      
                      537
                      
                      
                      
                      1,807
                      
                      
                      
                      1,612Net
      income  (loss) – Dilutive
                      
                      
                      3,539
                      
                      
                      
                      1,029
                      
                      
                      
                      9,285
                      
                      
                      
                      (18,966
                      )Net
      income (loss) from continuing operations
                      
                      
                      3,303
                      
                      
                      
                      744
                      
                      
                      
                      8,785
                      
                      
                      
                      (20,260
                      )Net
      income from discontinued operations (net of tax)
                      
                      $
                      236
                      
                      
                      $
                      285
                      
                      
                      $
                      500
                      
                      
                      $
                      1,294Denominator:Weighted
      average basis shares outstanding
                      
                      
                      9,406
                      
                      
                      
                      9,320
                      
                      
                      
                      9,349
                      
                      
                      
                      7,919Effect
      of dilutive instruments:Convertible
      preferred debentures (1)
                      
                      
                      2,500
                      
                      
                      
                      2,500
                      
                      
                      
                      2,500
                      
                      
                      
                      2,344Weighted
      average dilutive shares outstanding
                      
                      
                      11,906
                      
                      
                      
                      9,320
                      
                      
                      
                      11,849
                      
                      
                      
                      7,919EPS:Basic
      EPS
                      
                      $
                      0.31
                      
                      
                      $
                      0.11
                      
                      
                      $
                      0.80
                      
                      
                      $
                      (2.39
                      )Basic
      EPS from continuing operations
                      
                      
                      0.28
                      
                      
                      
                      0.08
                      
                      
                      
                      0.75
                      
                      
                      
                      (2.55
                      )Basic
      EPS from discontinued operations (net of tax)
                      
                      
                      0.03
                      
                      
                      
                      0.03
                      
                      
                      
                      0.05
                      
                      
                      
                      0.16Dilutive
      EPS
                      
                      $
                      0.30
                      
                      
                      $
                      0.11
                      
                      
                      $
                      0.78
                      
                      
                      $
                      (2.39
                      )Dilutive
      EPS from continuing operations
                      
                      
                      0.28
                      
                      
                      
                      0.08
                      
                      
                      
                      0.74
                      
                      
                      
                      (2.55
                      )Basic
      EPS from discontinued operations (net of tax)
                      
                      
                      0.02
                      
                      
                      
                      0.03
                      
                      
                      
                      0.04
                      
                      
                      
                      0.16


(1) –
Amount excluded from dilutive calculation in 2008 as it is
anti-dilutive.







12.Convertible
Preferred Debentures (net)




As of
September 30, 2009, there were 1.0 million shares of our Series A Preferred
Stock outstanding, with an aggregate redemption value of $20.0
million.  The Series A Preferred Stock matures on December 31,
2010, at which time any outstanding shares must be redeemed by the Company
at the $20.00 per share liquidation preference.  Because of this
mandatory redemption feature, the Company classifies these securities as a
liability on its balance sheet, and accordingly, the corresponding dividend as
an interest expense.




We issued
these shares of Series A Preferred Stock to JMP Group Inc. and certain of its
affiliates for an aggregate purchase price of $20.0 million.  The
Series A Preferred Stock entitles the holders to receive a cumulative
dividend of 10% per year, subject to an increase to the extent any future
quarterly common stock dividends exceed $0.20 per share.  The Company
paid a third quarter 2009 common stock dividend of $0.25, resulting in an
increase in the dividend rate for the Series A Preferred Stock in the 2009 third
quarter to 12.5% (per annum).  The Series A Preferred Stock is
convertible into shares of the Company’s common stock based on a conversion
price of $8.00 per share of common stock, which represents a conversion rate of
two and one-half (2 1⁄2) shares of common stock for each share of Series A
Preferred Stock.




13.Related
Party Transactions




On
January 18, 2008, the Company entered into an advisory agreement with Harvest
Capital Strategies LLC (“HCS”) (formerly known as JMP Asset Management LLC),
pursuant to which HCS is responsible for implementing and managing the Company’s
investments in alternative real estate-related and financial assets, which is
referred to in this report to as the “alternative investment strategy.” The
Company entered into the advisory agreement concurrent and in connection with
its private placement of Series A Preferred Stock to JMP Group Inc. and certain
of it affiliates. HCS is a wholly-owned subsidiary of JMP Group Inc. Pursuant to
Schedule 13D’s filed with the SEC, as of December 31, 2008, HCS and JMP Group
Inc. beneficially owned approximately 16.8% and 12.2%, respectively, of the
Company’s common stock, and 100%, collectively, of it Series A Preferred
Stock.




22




Pursuant
to the advisory agreement, HCS is responsible for managing investments made by
HC and NYMF (other than certain RMBS that are held in these entities for
regulatory compliance purposes) as well as any additional subsidiaries acquired
or formed in the future to hold investments made on the Company’s behalf by HCS.
The Company refers to these subsidiaries in its periodic reports filed with the
Securities and Exchange Commission as the “Managed Subsidiaries.” On March 31,
2009, the Company commenced its alternative investment strategy by purchasing
approximately $9.0 million in collateralized loan obligations. The Company’s
investment in these assets was completed in connection with the acquisition by
JMP Group Inc. of the investment adviser of the collateralized loan obligations.
The Company expects that, from time to time in the future, certain of its
alternative investments will take the form of a co-investment alongside or in
conjunction with JMP Group Inc. or certain of its affiliates. In accordance with
investment guidelines adopted by the Company’s Board of Directors, any
subsequent alternative investments by the Managed Subsidiaries must be approved
by the Board of Directors and must adhere to investment guidelines adopted by
the Board of Directors. The advisory agreement provides that HCS will be paid a
base advisory fee that is a percentage of the “equity capital” (as defined in
the advisory agreement) of the Managed Subsidiaries, which may include the net
asset value of assets held by the Managed Subsidiaries as of any fiscal quarter
end, and an incentive fee upon the Managed Subsidiaries achieving certain
investment hurdles. For the three and nine months ended September 30, 2009, HCS
earned a base advisory fee of approximately $0.2 million and $0.6 million,
respectively.  For the three and nine months ended September 30, 2008,
HCS earned a base advisory fee of approximately $0.2 million and $0.5 million,
respectively.  In addition, in the three months and nine months ended
September 30, 2009, HCS earned an incentive fee of approximately $0.3 million
and $0.3
million, respectively.  There was no incentive fee earned in the nine
months ended September 30, 2008. As of September 30, 2009, HCS was managing
approximately $41.3 million of assets on the Company’s behalf.




14.Income
Taxes




At
September 30, 2009, the Company had approximately $62.9 million of net operating
loss carryforwards which may be used to offset future taxable income. The
carryforwards will expire in 2024 through 2028. The Internal Revenue Code places
certain limitations on the annual amount of net operating loss carryforwards
that can be utilized if certain changes in the Company’s ownership occur. The
Company may have undergone an ownership change within the meaning of IRC section
382 that would impose such a limitation, but a final conclusion has not been
made. At this time, based on management’s initial assessment of the limitations,
management does not believe that the limitation would cause a significant amount
of the Company's net operating losses to expire unused.  The Company
continues to maintain a reserve for 100% of the deferred tax
benefits.







15.
Stock Incentive Plan




Pursuant
to the 2005 Stock Incentive Plan (the "Plan"), eligible employees, officers and
directors of the Company are offered the opportunity to acquire the Company's
common stock through the award of Restricted Stock under the Plan. The maximum
number of Restricted Stock awards that may be granted under the Plan is
103,111.




The
Company awarded 99,000 shares of Restricted Stock under the Plan on July 13,
2009, of which 34,335 shares have fully vested.  As of September
30, 2009, 4,111 shares remain available for issuance under the Plan. During the
three and nine months ended September 30, 2009, the Company recognized non-cash
compensation expense of $0.2 million and $0.2 million,
respectively.  Dividends are paid on all Restricted Stock issued,
whether those shares are vested or not. In general, unvested Restricted Stock is
forfeited upon the recipient's termination of employment.




23




A summary
of the status of the Company's non-vested Restricted Stock as of September 30,
2009 and changes during the nine months then ended is presented
below:




Number
      of
                              Non-vested
                              Restricted
                              Shares
                            
                            
                            Weighted
                              Average
                              Grant
      Date
                              Fair
      ValueNon-vested
      shares at beginning of year, January 1, 2009
                            
                            
                            -
                            
                            
                            $
                            -Granted
                            
                            
                            99,000
                            
                            
                            
                            5.28Forfeited
                            
                            
                            -
                            
                            
                            
                            -Vested
                            
                            
                            (34,335
                            )
                            
                            
                            5.28Non-vested
      shares as of  September 30, 2009
                            
                            
                            64,665
                            
                            
                            $
                            5.28Weighted-average
      fair value of Restricted Stock granted during the period
                            
                            
                            99,000
                            
                            
                            $
                            5.28




There was
no outstanding  non-vested Restricted Stock for the previous
period.




24




PART
II.  OTHER INFORMATION
  Item
6. Exhibits
  The
information set forth under “Exhibit Index” below is incorporated herein by
reference.
  47
 SIGNATURES
  Pursuant
to the requirements of the Securities Exchange Act of 1934, the registrant has
duly caused this report to be signed on its behalf by the undersigned thereunto
duly authorized.
  NEW
      YORK MORTGAGE TRUST, INC.Date:
      November 12, 2009
                By:
                /s/ Steven
      R. MummaSteven
      R. Mumma
                  Chief
      Executive Officer, President and Chief Financial Officer
                  (Principal
      Executive Officer and Principal Financial Officer)
   48
  EXHIBIT
INDEX
  Exhibit
              
              Description3.1(a)
              
              Articles
      of Amendment and Restatement of New York Mortgage Trust, Inc.
      (Incorporated by reference to Exhibit 3.1 to the Company’s Registration
      Statement on Form S-11 as filed with the Securities and Exchange
      Commission (Registration No. 333-111668), effective June 23,
      2004).3.1(b)
              
              Articles
      of Amendment of the Registrant (Incorporated by reference to Exhibit 3.1
      to the Company’s Current Report on Form 8-K filed on October 4,
      2007).3.1(c)
              
              Articles
      of Amendment of the Registrant (Incorporated by reference to Exhibit 3.2
      to the Company’s Current Report on Form 8-K filed on October 4,
      2007).3.1(d)
              
              Articles
      of Amendment of the Registrant (Incorporated by reference to Exhibit
      3.1(d) to the Company’s Current Report on Form 8-K filed on May 16,
      2008).3.1(e)
              
              Articles
      of Amendment of the Registrant (Incorporated by reference to Exhibit
      3.1(e) to the Company’s Current Report on Form 8-K filed on May 16,
      2008).3.1(f)
              
              Articles
      of Amendment of the Registrant (Incorporated by reference to Exhibit
      3.1(f) to the Company’s Current Report on Form 8-K filed on June 15,
      2009).3.2(a)
              
              Bylaws
      of New York Mortgage Trust, Inc. (Incorporated by reference to Exhibit 3.2
      to the Company’s Registration Statement on Form S-11 as filed with the
      Securities and Exchange Commission (Registration No. 333-111668),
      effective June 23, 2004).3.2(b)
              
              Amendment
      No. 1 to Bylaws of New York Mortgage Trust, Inc. (Incorporated by
      reference to Exhibit 3.2(b) to Registrant's Annual Report on Form 10-K
      filed on March 16, 2006).4.1
              
              Form
      of Common Stock Certificate. (Incorporated by reference to Exhibit 4.1 to
      the Company’s Registration Statement on Form S-11 as filed with the
      Securities and Exchange Commission (Registration No. 333-111668),
      effective June 23, 2004).4.2(a)
              
              Junior
      Subordinated Indenture between The New York Mortgage Company, LLC and
      JPMorgan Chase Bank, National Association, as trustee, dated
      September 1, 2005. (Incorporated by reference to Exhibit 4.1 to the
      Company’s Current Report on Form 8-K as filed with the Securities and
      Exchange Commission on September 6, 2005).4.2(b)
              
              Amended
      and Restated Trust Agreement among The New York Mortgage Company,
      LLC, JPMorgan Chase Bank, National Association, Chase Bank USA, National
      Association and the Administrative Trustees named therein, dated
      September 1, 2005. (Incorporated by reference to Exhibit 4.2 to the
      Company’s Current Report on Form 8-K as filed with the Securities and
      Exchange Commission on September 6, 2005).4.3(a)
              
              Articles
      Supplementary Establishing and Fixing the Rights and Preferences of
      Series A Cumulative Redeemable Convertible Preferred Stock of the
      Company   (Incorporated by reference to Exhibit 4.1 to the Company’s
      Current Report on Form 8-K filed on January 25, 2008).4.3(b)
              
              Form
      of Series A Cumulative Redeemable Convertible Preferred Stock Certificate
      (Incorporated by reference to Exhibit 4.2 to the Company’s Current Report
      on Form 8-K filed on January 25,
2008).
 
 49
 
 10.1
              
              Form
      of Restricted Stock Award Agreement for Officers (Incorporated by
      reference to Exhibit 10-1 to the Company’s Current Report on Form 8-K as
      filed with the Securities and Exchange Commission on July14,
      2009.)10.2
              
              Form
      of Restricted Stock Award Agreement for Directors (Incorporated by
      reference to Exhibit 10.2 to the Company’s Current Report on Form 8-K as
      filed with the Securities and Exchange Commission on July14,
      2009).31.1
              
              Section
      302 Certification of Chief Executive Officer and Chief Financial
      Officer.*32.1
              
              Section
      906 Certification of Chief Executive Officer and Chief Financial
      Officer.*
  * Filed
herewith.
  50