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REAL ESTATE OWNED, NET
 9 Months Ended
Sep. 30, 2017
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, 2017 and 2016 (in thousands):
 
Three Months Ended
September 30,
 
Nine Months Ended
September 30,
 
2017
 
2016
 
2017
 
2016
Balance, beginning of the period
$
2,427

 
$
6,147

 
$
11,081

 
$
11,627

Additions from loan foreclosures
—

 
156

 
46

 
534

Additions from acquisitions
—

 
—

 
—

 
400

Additions from capitalized costs
—

 
—

 
54

 
—

Proceeds from dispositions of REO
(961
)
 
(1,699
)
 
(11,382
)
 
(8,021
)
Gain on sale of REO
30

 
281

 
1,953

 
981

Valuation adjustments in the period
—

 
(168
)
 
(256
)
 
(804
)
Balance, end of the period
$
1,496

 
$
4,717

 
$
1,496

 
$
4,717



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, 2017 and December 31, 2016, the Company had none and $917,000, respectively, 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 $2.0 million at September 30, 2017 compared with $715,000 at December 31, 2016.