Real Estate Owned

12 Months Ended

Dec. 31, 2015

Real Estate [Abstract]

Real Estate Owned

Real Estate Owned

At December 31, 2015, the Company had 182 REO properties with an aggregate carrying value of $28.0 million. At December 31, 2014, the Company had 46 REO properties with an aggregate carrying value of $5.5 million. During the years ended December 31, 2015 and 2014, the Company acquired 13 and 24 residential properties, for approximately $1.7 million and $2.6 million, respectively, in connection with the acquisition of residential whole loans.

During the years ended December 31, 2015 and 2014, the Company reclassified 186 and 22 mortgage loans to REO at an aggregate estimated fair value of $30.1 million and $2.9 million, respectively at the time of transfer. Such transfers occur when the Company takes possession of the property by foreclosing on the borrower or completes a “deed-in-lieu of foreclosure” transaction.

At December 31, 2015, $26.1 million of residential real estate property was held by the Company that was acquired either through a completed foreclosure proceeding or from completion of a deed-in-lieu of foreclosure or similar legal agreement. In addition, formal foreclosure proceedings were in process with respect to $17.3 million of residential whole loans at carrying value and $394.9 million of residential whole loans at fair value at December 31, 2015.

During the year ended December 31, 2015, the Company sold 63 REO properties for consideration of $6.5 million, realizing net gains of approximately $76,000 which are included in Other, net on the Company’s consolidated statements of operations. The Company did not sell any REO properties during the year ended December 31, 2014. In addition, following an updated assessment of liquidation amounts expected to be realized that was performed on all REO held at the end of each quarter during the year ended December 31, 2015, an aggregate adjustment of approximately $3.5 million was recorded to reflect certain REO properties at the lower of cost or estimated fair value for the year ended December 31, 2015.

The following table presents the activity in the Company’s REO for the years ended December 31, 2015 and 2014. The Company did not have REO prior to 2014.

	For the Year Ended December 31,
(In Thousands)	2015			2014
Balance at beginning of period	$	5,492		$	—
Adjustments to record at lower of cost or fair value	(3,475		)	—
Transfer from residential whole loans (1)	30,104			2,904
Purchases and capital improvements	2,461			2,588
Disposals	(6,556		)	—
Balance at end of period	$	28,026		$	5,492

(1)  Includes net gain recorded on transfer of approximately $1.7 million and $331,000, respectively, for the years ended December 31, 2015 and 2014.

Real estate owned is included in Prepaid and other assets in the Company’s consolidated balance sheets.