Chris Farrar: Yes, sure. It’s a good question. I think we see a lot of the former that you posed. But most of those, we end up passing on because it kind of feels to us like somebody who’s distressed or stretched in and probably not a good risk. So, we kind of pass on those. The ones that we end up doing, and we see that our most successful, are the more seasoned, experienced flippers who know their markets. And there’s still a lot of aged housing out there that needs to be rehabbed and refurbished and those are the folks that we like to bet on.
Steve Delaney: Okay. So, it’s nice to hear that activity is still running along nicely for you. Curious why — I was looking at Page 11. Maybe it’s an anomaly, but it appears that the charge-offs were down a good bit. Trying to just get a handle on why that would be necessarily, just looking at your — where you are in the third quarter versus the first two quarters of the year.
Chris Farrar: Yes. Mark, do you want to handle that one?
Mark Szczepaniak: Yes. On that one, if you recall, on our second quarter earnings call, in the $716,000 charge-off, there was $393,000 that, that charge-off probably should have been less by $393,000. There was a borrower payment that came into our servicer of $393,000 that lowers the carrying value of the loan, therefore it lowered the charge-off. But we didn’t get that information from the servicers after a closed out the quarter, and that was $393,000 — I’m sorry, it’s immaterial to our total P&L. So, we just said, well, we’ll book that recovery in Q4. So that’s what you’re seeing there, Steve. So, if you really wanted to normalize it, you’d lower the $716,000 by $393,000 and put it in Q3.
Steve Delaney: Got it. Okay. Well, thanks, I wasn’t aware of that anomaly. That makes this — no trend there. I would have been surprised if it was going down that much anyway. So — and just one final thing. Not a bit surprising, obviously, to see NPLs going up year-over-year to about 10%. Chris, I guess, when you’re looking at these situations, is there one primary cause of this? Or is it multiple? I mean the cost of carry, the first thing that comes to my mind, it’s just a heck of a lot more expensive to be a borrower these days. But we’re also running into problems with terminal fair market value of properties or the problems with borrower execution. Just curious, kind of looking back anecdotally, when you look at your set of workout loans, problem loans, is there one major dynamic that you would point to?
Chris Farrar: Yes. Good question, Steve. There’s not one dynamic that I would point to. What — I do agree with you completely that there’s a lot of cost burdens on borrowers. We’re fixed rate loans, so I think we’ve helped them in quite a bit there. But if someone’s getting behind, and they’re starting to dig a hole, it’s hard to get out of it. The interesting thing that, to me, that I would sort of add to that, or that I see out there, is I think the most significant part of that uptick — just anecdotally, I don’t have a hard data for you. But just being in the business and close to it and talking to our asset managers is, I think, we’re seeing a lot of people that were speculating get flushed out, particularly on the 1-to-4 side, peak borrowers who saw a show on TV and said, I’m going to flip some homes and found out it’s not quite as easy as they maybe thought.
So, I think we’re seeing that on the 1-to-4s. On the small commercial assets, the delinquency rates are actually lower there than they are even in the 1-to-4s, and they’re holding up extremely well. So I think it goes to, kind of, like I said, that neighborhood-serving characteristic that are still in high demand, but definitely seeing some of the speculators get washed out on the 1-to-4s.
