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REAL ESTATE OWNED, NET
 9 Months Ended
Sep. 30, 2016
Real Estate [Abstract]  
REAL ESTATE OWNED, NET
REAL ESTATE OWNED, NET

The following table presents the changes in REO for the three and nine months ended September 30, 2016 and 2015 (in thousands):
 
Three Months Ended
September 30,
 
Nine Months Ended
September 30,
 
2016
 
2015
 
2016
 
2015
Balance, beginning of the period
$
6,147

 
$
6,105

 
$
11,627

 
$
3,352

Additions from loan foreclosures
156

 
1,085

 
534

 
3,226

Additions from acquisitions
—

 
—

 
400

 
2,525

Additions from capitalized costs
—

 
—

 
—

 
298

Proceeds from dispositions of REO
(1,699
)
 
(906
)
 
(8,021
)
 
(3,155
)
Gain on sale of REO
281

 
113

 
981

 
333

Valuation adjustments in the period
(168
)
 
(34
)
 
(804
)
 
(216
)
Balance, end of the period
$
4,717

 
$
6,363

 
$
4,717

 
$
6,363


 
 
 
 
 
 
 
 

REO properties are recorded at the estimated fair value of the property, less expected selling costs, establishing a new cost basis.  Subsequently, REO properties are carried at the lower of the new cost basis or updated fair market values, based on updated appraisals of the underlying properties, as received.  Valuation allowances on the carrying value of REO may be recognized based on updated appraisals or on management’s authorization to reduce the selling price of a property. At September 30, 2016, the Company had $593,000 of foreclosed one- to four-family residential real estate properties held as REO. The recorded investment in one- to four-family residential loans in the process of foreclosure was $1.1 million at September 30, 2016.