SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM l0-Q
Quarterly Report Under Section 13 or 15(d)
of The Securities Exchange Act of 1934
For Quarter Ended March 31, 1995
Commission file number O-17248
OWENS MORTGAGE INVESTMENT FUND,
a California Limited Partnership
(Exact Name of Registrant as specified In Its charter)
California 68-0023931
(State or other jurisdiction I.R.S. Employer
of incorporation or organization) Identification No.)
2221 OlympIc Boulevard
Walnut Creek, California 94595
(Address of principal executive office) (Zip Code)
Registrant's Telephone number,
including area code (510) 935-3840
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_________
<PAGE>
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
OWENS MORTGAGE INVESTMENT FUND
(A California Limited Partnership)
BALANCE SHEETS -- MARCH 31, 1995 AND DECEMBER 31, 1994
March 31 December 31
1995 1994
---- ----
ASSETS
Cash and cash equivalents (Note 2) $ 4,693,573 $ 1,640,818
Certificates of Deposit 1,100,000 1,100,000
Loans secured by trust deeds (Notes 2 and 3) 145,172,983 145,050,213
less: Allowance for loan losses (Note 2) (2,750,000) (2,750,000)
Real estate held for sale (Note 5) 7,117,121 4,628,325
Unsecured Loan to General Partner (Note 4) 775,020 1,249,989
Interest receivable 1,268,990 1,193,764
----------- -----------
Total Assets $157,377,687 $152,625,997
=========== ===========
LIABILITIES AND PARTNERS' CAPITAL
LIABILITIES:
Accrued distributions payable $ 477,978 $ 446,625
Mortgage payable (Note 5) 398,312 0
Accounts payable 33,916 332,644
Deferred interest 75,085 0
----------- -----------
Total Liabilities 985,291 779,269
----------- -----------
PARTNERS' CAPITAL:
General partners (Note 6) 1,494,074 1,448,360
Limited partners (Note 6) 154,898,322 150,358,368
----------- -----------
Total Partners' Capital 156,392,396 151,846,728
----------- -----------
Total Liabilities and Partners' Capital $157,377,687 $152,625,997
=========== ===========
The accompanying notes are an integral part
of these financial statements.
<PAGE>
OWENS MORTGAGE INVESTMENT FUND
(A California Limited Partnership)
STATEMENTS OF INCOME
FOR THE THREE MONTHS ENDED MARCH 31, 1995 AND 1994
FOR THE THREE MONTHS ENDED
March 31 March 31
1995 1994
---- ----
REVENUES:
Interest income on loans
secured by trust deeds $ 3,830,641 $ 3,741,138
Other interest income 33,058 20,659
---------- ----------
Total revenues $ 3,863,699 $ 3,761,797
---------- ----------
OPERATING EXPENSES:
Management Fees (Note 6) $ 268,237 $ 490,945
Promotional interest (Note 3) 22,148 20,312
Administrative 14,129 14,129
Legal and accounting 22,750 42,986
Real Estate Owned expenses 54,857 10,758
Other 0 9,670
---------- ----------
Total operating expenses $ 382,121 $ 588,800
---------- ----------
Net income $ 3,481,578 $ 3,172,997
========== ==========
Net income allocated to
general partner $ 34,078 $ 31,076
========== ==========
Net income allocated to
limited partners $ 3,447,500 $ 3,141,921
========== ==========
Net income per limited partnership
unit (Note 8) $.022 $.022
==== ====
The accompanying notes are an integral part of these
financial statements.
<PAGE>
OWENS MORTGAGE INVESTMENT FUND
(A California Limited Partnersbip)
STATEMENTS OF CASH FLOWS
For the Three Months Ended March 31, 1995 and 1994
March 31 March 31
1995 1994
CASH FLOWS FROM OPERATING ACTIVITIES:
Net Income $ 3,481,578 $ 3,172,997
Adjustments to reconcile net Income
to net cash provided by operating activities
(Increase) in interest receivable (75,226) (18,959)
Increase (decrease) in accrued distribution
payable 31,353 11,112
Increase (decrease) in accounts payable (298,728) (37,982)
Increase (decrease) in deferred interest 75,085 (15,254)
----------- -----------
Total adjustment (267,516) (61,083)
----------- -----------
Net cash provided by operating activities 3,214,062 3,111,914
----------- -----------
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of loans secured by trust deeds (11,481,679) (8,692,930)
Principal collected 892,446 433,219
Loan payoffs 10,945,432 7,139,597
Investments in real estate (2,094,484) 0
Investments in Certificiates of Deposit (net) 0 (100,000)
----------- -----------
Net cash provided by (used in)
investing activities (1,738,285) (987,114)
----------- -----------
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from sale of partnership Units 4,894,455 5,288,531
Cash distributions (1,405,094) (1,292,901)
Capital withdrawals (2,425,271) (3,029,673)
----------- -----------
Net cash provided by (used in)
financing activities 1,064,090 965,957
----------- -----------
INCREASE (DECREASE) IN CASH AND CASH
EQUIVALENTS 2,539,867 3,090,760
CASH AND CASH EQUIVALENTS AT
BEGINNING OF PERIOD 2,153,706 1,640,818
----------- -----------
CASH AND CASH EQUIVALENTS AT
END OF PERIOD $ 4,693,573 $ 4,731,578
=========== ===========
The accompanying notes are an integral
part of these financial statements.
<PAGE>
OWENS MORTGAGE INVESTMENT FUND
(A California Limited Partnership)
NOTES TO FINANCIAL STATEMENTS
MARCH 31, 1995
(1) ORGANIZATION AND OPERATIONS
Owens Mortgage Investment Fund (the Partnership), a California limited
partnership, was formed on June 14, 1984 to invest in loans secured by first,
second and third trust deeds and wraparound mortgage loans. The Partnership
commenced operations on the date of formation and will continue until December
31, 2034 unless dissolved prior thereto under the provisions of the partnership
agreement.
The general partners include Owens Financial Group, Inc. (OFG), a
California Corporation, and certain individuals who are OFG's
shareholders/officers and/or employees. The individual partners have assigned to
OFG their interest in any present or future promotional allowance from the
Partnership. OFG is a California corporation engaged in the origination of real
estate mortgage loans and the subsequent servicing of these mortgages for the
Partnership and for other third-party investors.
The general partners are authorized to offer and sell and have outstanding
up to an aggregate of 250,000,000 units outstanding at $1.00 per unit,
representing $250,000,000 of limited partnership interest in the Partnership.
Limited Partnership Units outstanding were 155,094,342 at March 31, 1995. As of
March 31, 1995, the Partnership had registered $321,570,324 of limited
partnership interests with the Securities and Exchange Commission.
(2) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The following items comprise the significant accounting policies that the
Partnership follows in preparing and presenting its financial statements.
(a) Loans Secured by Trust Deeds
Loans secured by trust deeds are acquired from OFG and are recorded at
cost, which includes fees paid to OFG for origination, evaluation, and
acquisition services. The cost to the Partnership approximates the principal
amount outstanding. Interest income on loans is accrued by the simple interest
method. In May 1993, the Financial Accounting Standards Board issued Statement
No. 114, Accounting by Creditors for Impairment of a Loan. Statement No. 114
requires that impaired loans be measured on the present value of expected future
cash flows discounted at the loan's effective interest rate or, as a practical
expedient, at the loan's observable market price or the fair value of the
collateral if the loan is collateral dependent. The Partnership will be required
<PAGE>
to implement this new standard by 1995. Management of the Partnership has not
yet evaluated the impact that implementation of this standard will have on the
financial statements of the Partnership.
(b) Allowance for Loan Losses
The Partnership maintains an allowance for loan losses equal to $2,750,000
as of March 31, 1995. Management of the Partnership believes that based on
historical experience and a review of the loans and their respective collateral,
the allowance for loan losses is adequate in amount.
Through October 31, 1994, OFG made all delinquent interest payments on
Partnership loans originated prior to May 1, 1993 on a non-recourse basis.
However, effective November 1, 1994, OFG discontinued its practice of making
such payments for certain loans totaling $5,661,000 as of March 31, 1995 which
were originated prior to May 1, 1993. The Partnership discontinues the accrual
of interest on loans when, in the opinion of management, there is a significant
doubt as to the collectibility of interest or principal from either the borrower
or OFG or when the payment of principal or interest is ninety days past due,
unless OFG continues to advance interest payments to the Partnership. As of
March 31, 1995 and December 31, 1994, the Partnership had loans totaling
$5,092,000 and $4,923,000, respectively, classified as non-accrual loans.
The Partnership's investment in loans for which OFG has provided advances
for delinquent interest payments over 90 days was $4,169,233 and $3,445,747 at
March 31, 1995 and December 31, 1994, respectively. Advances for delinquent
interest payments and other payments, such as property taxes and mortgage
interest pursuant to senior indebtedness, made to or on behalf of the
Partnership by OFG for the three months ended March 31, 1995 and for the twelve
months ended December 31, 1994 which had not been reimbursed by the borrower as
of the same date, totaled approximately $271,000 and $1,149,000, respectively.
The Partnership has no obligation to repay these advances to OFG. During 1994,
OFG assumed through foreclosure one Partnership loan totaling $58,000. In
addition, the Partnership was foreclosed out of a loan by a senior lienholder in
the amount of $591,000. OFG assumed no Partnership loans through foreclosure for
the three month period ended March 31, 1995.
(c) Cash and Cash Equivalents
For purposes of the statements of cash flows, cash and cash equivalents
include interest-bearing or non interest-bearing bank deposits and short-term
certificates of deposit with original maturities of three months or less.
(d) Certificates of Deposit
Certificates of Deposit are held with various financial institutions with
original maturities of up to one year.
<PAGE>
(e) Real Estate Held for Sale
Real estate held for sale includes real estate acquired through foreclosure
and is carried at the lower of the recorded investment in the loan, inclusive of
any senior indebtedness, or the property's estimated fair market value, less
estimated cost to sell.
(f) Income Taxes
No provision is made for income taxes since the Partnership is not a
taxable entity. Accordingly, any income or loss is included in the tax returns
of the partners.
(3) LOANS SECURED BY TRUST DEEDS
Loans secured by trust deeds as of March 31, 1994 and December 31, 1994
were as follows:
March 31 December 31
1995 1994
---- ----
Income-producing properties $135,411,943 $135,128,661
Single-family residences 3,320,673 3,179,945
Unimproved land 6,440,367 6,741,607
----------- -----------
$145,172,983 $145,050,213
=========== ===========
First mortgages $131,631,800 $131,139,007
Second mortgages 12,959,602 13,228,818
Third mortgages or all-inclusive
deeds of trust 581,581 682,388
----------- -----------
$145,172,983 $145,050,213
=========== ===========
Loan maturities range from 1994 to 2011, with approximately 41%
($59,129,000) of the loan principal outstanding at March 31, 1995 maturing in
1995 and 1996. These maturities include $24,165,000 in loans which are past
maturity as of March 31, 1995, of which $4,699,000 represents loans for which
interest payments are delinquent over 90 days. The Partnership refinanced loan
totaling $3,095,000 and $11,266,000 during the three months ended March 31, 1995
and the year ended December 31, 1994, respectively, thereby extending the
maturity dates of such loans.
The Partnership's total investment in loans delinquent over ninety days is
$10,188,000 and $12,837,000 at March 31, 1995 and December 31, 1994,
respectively. As of March 31, 1995 and December 31, 1994, OFG is providing
non-recourse advances for the delinquent interest payments on $5,733,000 and
$4,432,000, respectively, of such loans.
As of March 31, 1995 and December 31, 1994, the Partnership's loans secured
by deeds of trust on real property collateral located in Northern California
totaled approximately 83% ($120,751,000) and 82% ($118,462,000), respectively of
<PAGE>
the loan portfolio. The Northern California region is a large geographic area
which has a diversified economic base. The ability of the borrowers to repay
loans is influenced by the strength of the region and the impact of prevailing
forces on the value of real estate. Such loans are secured by deeds of trust in
real estate properties and are expected to be repaid from the cash flow of the
properties or proceeds from the sale or refinancing of the properties. The
policy of the Partnership is to require real property collateral with a value,
net of senior indebtedness, that exceeds the carrying amount of the loan balance
and to record a deed of trust on the underlying property.
(4) UNSECURED LOANS DUE FROM GENERAL PARTNER
During 1993, OFG sold various properties that it had acquired from the
Partnership through foreclosure proceedings on Partnership loans assumed in 1992
and 1993. The sales proceeds were insufficient to repay the Partnership's
investment in the related mortgage notes; accordingly, OFG executed an unsecured
note payable to the Partnership in the aggregate amount of $1,411,112 to satisfy
OFG's obligation pursuant to an expired Limited Indemnification Agreement.
During 1994, OFG sold one property acquired through foreclosure proceedings
on a Partnership loans assumed in 1993. In addition, the Partnership was
foreclosed out of the second position by the holder of the first deed of trust.
Although not obligated to do so, OFG assumed the loss associated with these
transactions in the amount of $960,512 and added this amount to the outstanding
balance of the unsecured note payable. As of March 31, 1995, OFG has repaid
$1,596,604 in principal on this unsecured loan leaving a balance due of
$775,020. The note carries an interest rate of 8% and is current.
(5) REAL ESTATE HELD FOR SALE AND MORTGAGE PAYABLE
Real estate held for sale at March 31, 1995 consists of the following
properties acquired through foreclosure in 1993 and 1994:
Warehouse, Merced, California, net of valuation
allowance of $200,000 as of March 31, 1995 $ 800,074
Residential lots, Carmel, California 1,373,633
Light industrial, Emeryville, California 925,000
38.5% interest in residential lots, Belmont, California 577,395
70% interest in undeveloped land, Vallejo, California 538,705
Commercial lot, Sacramento, California, net of valuation
allowance of $200,000 as of March 31, 1995 358,407
Office building, Monterey, California 1,975,595
Residence, Oakland, California 513,312
Residential lot, Grass Valley, California 55,000
---------
Total $7,117,121
=========
Real estate held for sale has increased in recent years due to the
Corporate General Partner's policy to not acquire such properties through
foreclosure.
<PAGE>
(6) PARTNER'S CAPITAL
(a) Contributions
The limited partners contribute $1.00 for each unit subscribed. Registration
costs incurred by the Fund have been offset against contributed capital. Such
costs, which were incurred in 1989, amounted to approximately $198,000.
Prior to September 1, 1986, the general partners contributed cash in an amount
equal to 1% of the aggregate capital contribtions of the limited partners. After
such date, the general partners are required to make cash capital contributions
in the amount of 1/2 of 1% of the limited partners' aggregate capital
contributions.
(b) Allocations, Distributions and Withdrawals
In accordance with the partnership agreement, the Partnership's profits, gains
and losses are allocated to each limited partner and the corporate general
partner in proportion to their respective capital contributions.
Distributions are made monthly to the partners in proportion to the respective
units owned during the preceding calendar month. Accrued distributions payable
represent amounts to be paid to the partners in April, 1995 and January, 1995 on
their capital balances at March 31, 1995 and December 31, 1994, respectively.
The Partnership makes cash distributions to those limited partners who elect to
receive such distributions. Those limited partners who elect not to receive cash
distributions have their distributions reinvested in additional limited
partnership units. Such reinvested distributions totaled $2,076,484 and
$1,876,461 for the three months ended March 31, 1995 and 1994, respectively.
The limited partners may withdraw, or partially withdraw, from the Fund and
obtain the return of their outstanding capital accounts within 91 days after
written notices are delivered to the corporate general partner, subject to the
following limitations:
Any such payments are required to be made only from cash available for
distribution, net proceeds and capital contributions (as defined)
during said 91-day period.
A maximum of $75,000 may be withdrawn during any calendar quarter (or
$100,000 in the case of an estate of a deceased limited partner).
The general partners are not required to establish a reserve fund for
the purpose of funding such payments.
<PAGE>
No more than 10% of the outstanding limited partnership interests nay
be withdrawn during any calendar year except upon dissolution of the
Fund.
(c) Promotional Interest of General Partners
The general partners contributed cash to the Partnership's capital in the amount
of 0.5% of the limited partners aggregate capital contributions and, together
with their promotional interest, the general partners have an interest equal to
1% of the limited partners contributions. This promotional interest of the
general partners of up to 1/2 of 1% is expensed monthly to the Partnership and
credited as a contribution to the general partners capital account as additional
compensation. As of March 31, 1995, the general partners had made cash capital
contributions of $786,093 to the Partnership. The general partners have agreed
not to withdraw any portion of this capital from the Partnership, even though it
exceeds the 1/2 of 1% requirement, but they are not required to make any further
cash capital contributions to the Partnership until the amount falls below the
1/2 of 1% requirement.
The promotional interest expense charged to the Partnership was $22,148 and
$20,312 for the three months ended March 31, 1995 and 1994, respectively.
(7) CONTINGENCY RESERVES
In accordance with the partnership agreement and to satisfy the Partnership's
liquidity requirements, the Partnership is required to maintain contingency
reserves (as defined) in an aggregate amount of at least 1.5% of the gross
proceeds of the sale of limited partnership units. The cash capital contribution
of the general partners (amounting to $786,093 at March 31, 1995), up to a
maximum of .5% of the limited partners' capital contributions, will be available
as additional contingency reserve, if necessary.
The contingency reserves required at March 31, 1995 and December 31, 1994 were
$3,144,551 and $3,055,784, respectively. Cash and cash equivalents as of the
same dates were restricted accordingly.
(8) TRANSACTIONS WITH AFFILIATES
OFG is entitled to receive from the Partnership a management fee of up to 2.75%
per annum of the average unpaid balance of the Partnership's mortgage loans at
the end of each of the preceding twelve months for services redered as manager
of the Partnership. The maximum management fee is reduced to 1.75% per annum if
OFG has not provided during the preceeding calendar year any of the certain
services defined in the limited partnership agreement.
All of the Partnership's loans are serviced by OFG, in consideration for which
OFG receives fees up to .25% per annum of the unpaid principal balance of the
loans. Such servicing fees are paid from the interest income of the loans
<PAGE>
collected from the borrowers. In consideration for management services provided,
OFG receives fees up to 2.75% per annum of the average unpaid balance of the
Partnership's mortgage loans at the end of each of the 12 months in the then
current calendar year.
Interest income on loans secured by trust deeds is collected by OFG and, along
with advances on delinquent loans, is remitted to the Partnership. Interest
receivable amounted to $1,268,990 and $1,193,764 at March 31, 1995 and December
31, 1994, respectively.
OFG may, at its sole discretion and on a monthly basis, adjust the servicing and
management fees as long as such fees do not exceed the allowable .25% and 2.75%
annual limits, respectively. In determining the servicing and management fees,
and hence the yield to the Partnership, OFG may consider a number of factors,
including the then-current market yields. Service fee payments to OFG
approximated $99,000 and $89,000 for the three months ended March 31, 1995 and
1994, respectively. Management fee income to OFG earned on loans invested in by
the Fund approximated $268,000 and $491,000 for the three months ended March 31,
1995 and 1994, respectively.
OFG is the obligor on a note payable to the Partnership in the amount of
$490,322 which is secured by a property owned by OFG as of March 31, 1995. This
note is interest only, due on demand and is current. Although the terms of the
loan between the Partnership and OFG may or may not be at market rate, they are
considered adequate and reasonable.
OFG originates all loans the Partnership is invested in and receives an
investment evaluation fee payable by borrowers or the Partnership. Such fees,
payable by borrowers, earned by OFG amounted to approximately $263,000 and
$167,000 for the three months ended March 31, 1995 and 1994, respectively.
OFG receives late payment charges from borrowers who make delinquent payments.
Such charges are in addition to the normal monthly loan payments and totaled
approximately $16,000 and $48,000 for the three months ended March 31, 1995 and
1994, respectively.
(9) NET INCOME PER LIMITED PARTNERSHIP UNIT
Net income per limited partnership unit is computed using the weighted average
of limited partnership units outstanding during the three month periods. These
amounts were $157,579,824 and $140,763,796 for the three months ended March 31,
1995 and 1994, respectively.
<PAGE>
Item 2. Management's Discussion and Ana1ysis of Financial Condition and
Results of Operations
Results of Operations
The net income increases of $309,000 (9.73%) for the three months ended March
31, 1995 as compared to the three months ended March 31, 1994 was primarily
attributable to increases in the average mortgage investments and other notes
receivable from $135,327,000 to $146,834,000 for the three months ended March
31, 1994 and 1995, respectively.
The Partnership experienced decreases in its average net yield from 8.98% to
8.86% for the three months ended March 31, 1994 and 1995, respectively. This
decrease has resulted mainly from the fact that, as of November 1, 1994, the
Corporate General Partner discontinued its previous practice of making payments
on certain delinquent loans held by the Partnership which were originated prior
to May 1, 1993. The Partnership had $5,661,000 on non-performing loans as of
March 31, 1995 on which the Corporate General Partner was not advancing
payments.
Alrhough the average net yield for the Partnership decreased for the three month
period ended March 31, 1995 as compared to the three month period ended March
31, 1994, the sum of the servicing and management fees paid to the Corporate
General Partner decreased from approximately $580,000 to $367,000 for the three
months ended March 31, 1994 and 1995, respectively. This represents decreases in
the annualized rate of servicing and management fees to total trust deed
investments of the Partnership from 1.71% to 1.00% for the three month period
ended March 31, 1994 and 1995, respectively. These fees are well within the
limitation on such fees as imposed by the Limited Partnership Agreement. The net
yield represents the net income of the Partnership after all expenses with the
exception of the provision for losses on loans.
Portfolio Review
The number of Partnership mortgage investments decreased from 269 to 236 as of
March 31, 1994 and 1995, respectively. The average loan balance in this period
increased from $501,019 to $615,139 as of March 31, 1994 and 1995, respectively.
This average loan increase reflects the Partnership's ability to invest in
larger mortgage loans meeting the Partnership's objectives.
The Corporate General Partner has historically made all periodic interest
payments to the Partnership on all delinquent loans made or invested in by the
Partnership. However, on loans originated by the Corporate General Partner on or
after May 1, 1993, and effective November 1, 1994, for certain other loans
originated prior to May 1, 1993, the Corporate General Partner has adopted the
policy to not advance delinquent interest or principal. As of March 31, 1995,
there were $5,092,000 in loans held by the Partnership on which payments were
more than 90 days delinquent and on which payments were not being advanced by
the Corporate General Partner. The Corporate General Partner has advanced
approximately $197,000 in delinquent interest payments to the Partnership from
January 1, 1995 to March 31, 1995 that had not been collected from the borrower
by the Corporate General Partner as of March 31, 1995.
<PAGE>
Approximately $10,188,000 (7.0%) and $9,830,000 (6.8%) of the loans invested in
by the Fund were more than 90 days delinquent in payment as of March 31, 1995
and 1994, respectively. Of these amounts, approximately $8,484,000 (5.8%) and
$5,330,000 (3.7%) were in the process of foreclosure as of March 31, 1995 and
1994, respectively.
A loan loss reserve in the amount of $2,750,000 was created on the books of the
Partnership as of December 31, 1993. As of this date the General Partners have
determined that this loan loss reserve is adequate.
As of March 31, 1995 and December 31, 1994 approximately 83% and 82%,
respectively of the mortgage loans made or invested in by the Partnership are
secured by real property located in Northern California. The following table
sets forth the principal amount of mortgage investments, by classification of
property securing each loan, held by the Partnership on March 31, 1995 and
December 31, 1994:
Principal Amount
March 31 December 31
1995 1994
---- ----
(000) (000)
Single-Family Dwellings $ 3,321 $ 3,180
Income-Producing Property 135,412 135,129
Unimproved Land 6,440 6,741
------- -------
$145,173 $145,050
======= =======
First Mortgages $131,632 $131,139
Second Mortgages 12,960 13,229
Third Mortgages or All-inclusive
Deeds of Trust 581 682
------- -------
$145,173 $145,050
======= =======
The following amount of delinquent loans held by the Partnership have been
acquired and foreclosed upon by the Corporate General Partner from January 1,
1991 through March 31, 1995:
Delinquent Year
Principal Interest Foreclosed
--------- -------- ----------
$2,890,000 $258,602 1991
5,220,925 787,591 1992
1,025,581 150,295 1993
58,000 8,417 1994
The Corporate General Partner has advanced all delinquent interest to the
Partnership on these foreclosed loans. Of these foreclosed loans the Partnership
held one montgage in the amount of $490,322 as of March 31, 1995.
<PAGE>
Real Estate Owned
The Partnership currently holds title to the following nine properties which
were foreclosed on during 1993, 1994 and 1995:
Fund
Loan Senior Delinquent
Amount Loans Interest (1)
Description Amount
60,000 S.F. Light
Industrial Warehouse
Merced, CA $1,000,000 $ 0 $175,333
Residential Lots
Carmel Valley, CA $ 600,000 $ 0 $141,750
Residential Development
Belmont, CA $ 508,000 $ 0 $199,375
Light Industrial Warehouse
Emeryville, CA $ 925,000 $ 0 $235,721
Commercial Lot/Residential
Development
Vallejo, CA $ 525,000 $ 0 $ 83,949
Commerical Lot
Sacramento, CA $ 500,000 $ 0 $ 39,042
Office Building
Monterey, CA $ 550,000 $ 1,425,000 (2) $ 30,077
Residence
Oakland, CA $ 115,000 $ 398,312 $ 11,500
Residential Lot
Grass Valley, CA $ 55,000 $ 0 $ 6,302
(1) The delinquent interest was advanced by OFG to the Partnership. The
$83,949 of delinquent interest advanced by OFG on the Vallejo, California
property has been reimbursed by the Partnership.
(2) This senior loan was originally $2,102,646 including late charges and fees.
The Corporate General Partner arranged for this loan to be discounted to
$1,425,000 if the Partnership were to pay it off in full. The Partnership paid
this loan off prior to March 31, 1995.
<PAGE>
With the exception of the light industrial warehouse located in Emeryville,
California, these properties do not currently generate revenue and, as such, are
operating at a deficit. The General Partners believe that due to the values of
these properties, the Partnership should not sustain any losses of principal on
their ultimate disposition.
The Partnership's investment in Real Estate Owned has increased during 1993,
1994 and 1995 due to the Corporate General Partner's policy to not acquire
property subject to foreclosure on which the Partnership has a trust deed
investment.
Liquidity and Capital Resources
The Partnership relies upon purchases of limited partnership interests and loan
payoffs for the creation of capital for mortgage investments. The Partnership
has not and does not intend to borrow money for investment purposes.
Continency Reserves
The Partnership maintains cash and certificates of deposit as contingency
reserves in an aggregate amount of at least 2% of the gross proceeds of the sale
of Limited Partners' Units. To the extent that such funds are not sufficient to
pay expenses in excess of revenues or to meet any obligation of the Partnership,
it may be necessary for the Partnership to sell or otherwise liquidate certain
of its investments on terms which may not be favorable to the Partnership.
Current Economic Conditions
The Partnership has been affected by regional declines in commercial property
values and general economic conditions; however, the Partnership has not
sustained any principal losses to date. Due to the conservative loan-to-value
criteria established by the Corporate General Partner, the mortgage loans held
by the Partnership appear in general to be, in the opinion of the General
Partners, adequately secured.
The Partnership generally invests in relatively short-term commercial loans (1-7
years) which large financial institutions typically do not invest in. Due to
this, the net income of the Partnership has in recent years remained in the
range of 9-10 percent per year. If there were a reduction in the demand for
loans originated by the Corporate General Partner and, thus, fewer loans for the
Partnership to invest in, the Partnership would have to invest excess cash in
shorter term investments yielding considerably less than the current investment
portfolio.
The Partnership continues to receive substantial additional investments from new
and existing Limited Partners which provide capital for loans, purchases of
existing notes and redemption of existing Limited Partnership Units.
<PAGE>
PART II. OTHER INFORMATION
Item 1. Legal Proceedings
The Partnership is not presently involved in any material legal proceedings.
Item 6(b). Reports on Form 8-K
No reports on Form 8-K have been filed during the quarter for which this report
is filed.
<PAGE>
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.
Dated: May 11, 1995 OWENS MORTGAGE INVESTMENT FUND
a California Limited Partnership
(Registrant)
By: Owens Financial Group, Inc.
a General Partner
By: \s\ David Adler
David Adler
President
By: \s\ Bryan H. Draper
Bryan H. Draper
Controller
Principal Financial and
Accounting Officer
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
Financial Data Schedule for Owens Mortgage Investment Fund
</LEGEND>
<MULTIPLIER> 1
<CURRENCY> U.S. Dollars
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-START> JAN-01-1995
<PERIOD-END> MAR-31-1995
<EXCHANGE-RATE> 1
<CASH> 4,693,573
<SECURITIES> 1,100,000
<RECEIVABLES> 1,268,990
<ALLOWANCES> 0
<INVENTORY> 143,198,003
<CURRENT-ASSETS> 150,260,566
<PP&E> 7,117,121
<DEPRECIATION> 0
<TOTAL-ASSETS> 157,377,687
<CURRENT-LIABILITIES> 985,291
<BONDS> 0
<COMMON> 0
0
0
<OTHER-SE> 156,392,396
<TOTAL-LIABILITY-AND-EQUITY> 157,377,687
<SALES> 3,863,699
<TOTAL-REVENUES> 3,863,699
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 382,121
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 3,481,578
<INCOME-TAX> 0
<INCOME-CONTINUING> 3,481,578
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 3,481,578
<EPS-PRIMARY> .022
<EPS-DILUTED> .022
</TABLE>
