LOANS HELD FOR SALE

The composition of loans held for sale as of June 30, 2016 and December 31, 2015 was as follows:



	June 30, 2016		December 31, 2015
(amounts in thousands)
Commercial loans:
Mortgage warehouse loans at fair value	$	2,271,893	$	1,754,950
Multi-family loans at lower of cost or fair value	27,527		39,257
Commercial loans held for sale	2,299,420		1,794,207
Consumer loans:
Residential mortgage loans at fair value	2,401		2,857
Loans held for sale	$	2,301,821	$	1,797,064

Commercial loans held for sale consists primarily of mortgage warehouse loans. These mortgage warehouse lending transactions are subject to master repurchase agreements and are designated as held for sale and reported at fair value based on an election made to account for the loans at fair value. Pursuant to the agreements, Customers funds the pipelines for these mortgage lenders by sending payments directly to the closing agents for funded loans (i.e., the purchase event) and receives proceeds directly from third party investors when the loans are sold into the secondary market (i.e., the sale event). The fair value of the mortgage warehouse loans is estimated as the amount of cash initially advanced to fund the mortgage, plus accrued interest and fees, as specified in the respective agreements. The interest rate on these loans are variable and the lending transactions are short-term, with an average life of 19 days from purchase to sale. The primary goal of these lending transactions is to provide liquidity to mortgage companies.

Effective September 30, 2015, Customers Bank transferred $30.4 million of multi-family loans from held for sale to loans receivable (held for investment) because the Bank no longer has the intent to sell these loans. Customers Bank transferred these loans at their carrying value, which was lower than the estimated fair value at the time of transfer. No loans were transfered during 2016.