10.	Loans Held for Sale, at Fair Value

Loans held for sale represent originated loans that are typically sold within 45 days from the date that the mortgage loan is funded. The Company initially and subsequently measures all loans held for sale at fair value on the accompanying unaudited condensed consolidated statement of financial condition. This fair value measurement falls within the definition of a Level 2 measurement (significant other observable inputs) within the fair value hierarchy. For additional information, see Note 13 – “Fair Value of Financial Assets and Liabilities.” Electing to use fair value provides a better offset of the change in fair value of the loan and the change in fair value of the derivative instruments used as economic hedges. Loans held for sale had a cost basis and fair value as follows (in thousands):

	June 30, 2018		December 31, 2017
Cost basis	$	540,680	$	360,440
Fair Value		547,968		362,635

As of June 30, 2018 and December 31, 2017, respectively, there were no loans held for sale that were 90 days or more past due or in nonaccrual status.

During the period prior to its sale, interest income on a loan held for sale is calculated in accordance with the terms of the individual loan. Interest income on Loans held for sale was $5.0 million and $12.7 million for the three months ended June 30, 2018 and 2017, respectively and $9.7 million and $19.2 million for the six months ended June 30, 2018 and 2017. Interest income on Loans held for sale is included as part of “Interest income” in the Company’s unaudited condensed consolidated statements of operations. During the three months ended June 30, 2018 and 2017, the Company recognized losses of $7.8 million and $2.2 million, respectively, for the change in fair value on loans held for sale. During the six months ended June 30, 2018 and 2017, the Company recognized a gain of $7.3 million and loss of $0.1 million, respectively, for the change in fair value on loans held for sale.