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REAL ESTATE OWNED, NET

9 Months Ended

Sep. 30, 2022

The following table presents the changes in REO for the three and nine months ended September 30, 2022 and 2021 (in thousands):


	Three Months Ended September 30,				Nine Months Ended September 30,
	2022		2021		2022		2021
Balance, beginning of the period	$	340	$	763	$	852	$	816
Additions from loan foreclosures	—		89		—		512


Proceeds from dispositions of REO	—		—		(864)		(783)
Gain on sale of REO	—		—		352		307

Balance, end of the period	$	340	$	852	$	340	$	852

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, 2022 and December 31, 2021. The Company had $1.4 million and $609,000 of one- to four-family residential loans in the process of foreclosure at September 30, 2022 and December 31, 2021, respectively