CERTAIN TRANSFERS OF FINANCIAL ASSETS (Tables)

9 Months Ended

Sep. 30, 2016

The table below presents the unpaid principal balance of loans held for sale and related fair values at September 30, 2016 and December 31, 2015 (in thousands):



	September 30, 2016		December 31, 2015
Unpaid principal balance	$	620,207	$	82,853
Fair value	648,684		86,075
Fair value over/(under) unpaid principal balance	$	28,477	$	3,222

Servicing Asset at Amortized Cost

We generally retain the right to service the loans sold, creating mortgage servicing rights ("MSRs") which are recorded as assets on our balance sheet. A summary of MSR activities for the nine months ended September 30, 2016 is as follows (in thousands):



Servicing asset:
Balance, beginning of year(1)	$	423
Capitalized servicing rights	16,344
Amortization	(891		)
Balance, end of period	$	15,876
Valuation allowance:
Balance, beginning of year	$	—
Increase in valuation allowance	414
Balance, end of period	$	414
Servicing asset, net(1)	$	15,462
Fair value	$	15,970

Schedule of Fair Value Assumption, Date of Securitization or Asset-backed Financing Arrangement, Transferor's Continuing Involvement, Servicing Assets or Liabilities

September 30, 2016 and December 31, 2015, management used the following assumptions to determine the fair value of MSRs:



	September 30, 2016		December 31, 2015
Average discount rates	10.09	%	9.76	%
Expected prepayment speeds	11.18	%	9.66	%
Weighted average life, in years	6.5		7.3