REAL ESTATE OWNED, NET

6 Months Ended

Jun. 30, 2018

Real Estate [Abstract]

REAL ESTATE OWNED, NET

REAL ESTATE OWNED, NET

The following table presents the changes in REO for the three and six months ended June 30, 2018 and 2017 (in thousands):

	Three Months Ended June 30,						Six Months Ended June 30,
	2018			2017			2018			2017
Balance, beginning of the period	$	328		$	3,040		$	360		$	11,081
Additions from loan foreclosures	393			46			521			46
Additions from capitalized costs	—			54			—			54
Proceeds from dispositions of REO	(314		)	(1,228		)	(314		)	(10,421		)
Gain on sale of REO	66			721			66			1,923
Valuation adjustments in the period	—			(206		)	(160		)	(256		)
Balance, end of the period	$	473		$	2,427		$	473		$	2,427

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 June 30, 2018 and December 31, 2017, the Company had $155,000 and $0, 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 $541,000 at June 30, 2018 compared with $2.0 million at December 31, 2017.