REAL ESTATE OWNED, NET

9 Months Ended

Sep. 30, 2021

The following table presents the changes in REO for the three and nine months ended September 30, 2021 and 2020 (in thousands):


	Three Months Ended September 30,				Nine Months Ended September 30,
	2021		2020		2021		2020
Balance, beginning of the period	$	763	$	2,400	$	816	$	814
Additions from loan foreclosures	89		—		512		1,588


Proceeds from dispositions of REO	—		(707)		(783)		(805)
Gain on sale of REO	—		120		307		216
Valuation adjustments in the period	—		(18)		—		(18)
Balance, end of the period	$	852	$	1,795	$	852	$	1,795

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. The Company had no foreclosed one- to four-family residential real estate properties held as REO at both September 30, 2021 and December 31, 2020. The Company had $609,000 of one- to four-family residential loans in the process of foreclosure at both September 30, 2021 and December 31, 2020