Real Estate Held for Investment, net and Other Real Estate Owned

6 Months Ended

Jun. 30, 2012

Real Estate Held For Investment Net And Other Real Estate Owned

Real Estate Held for Investment, net and Other Real Estate Owned

Real Estate Held for Investment, net and Other Real Estate Owned

During the six months ended June 30, 2012, the Company received title to properties with an aggregate estimated fair value at the time of foreclosure of $185.8 million, in full or partial satisfaction of non-performing mortgage loans for which those properties had served as collateral. These properties were classified as OREO, based on management's current intention to market them for sale in the near term.

In addition, during the six months ended June 30, 2012, the Company acquired $27.3 million of REHI land and other assets in a non-cash exchange for a noncontrolling interest in one of its consolidated subsidiaries. In conjunction with this transaction, the same consolidated subsidiary contributed REHI land with a recorded value of $11.6 million in a non-cash exchange for a 40% noncontrolling equity interest in a new venture. The Company did not recognize any gains or losses associated with these transactions.

Real Estate Held for Investment, net—REHI consisted of the following ($ in thousands):

	As of
	June 30, 2012			December 31, 2011
Land held for investment and development	$	738,459		$	711,072
Operating property
Buildings and improvements	382,919			379,644
Land	153,568			154,445
Less: accumulated depreciation and amortization	(25,265		)	(17,027		)
Real estate held for investment, net	$	1,249,681		$	1,228,134

The Company records REHI operating income in "Other income" and REHI operating expenses in "Operating costs—REHI and OREO," on the Company's Consolidated Statements of Operations, as follows ($ in thousands):

	For the Three Months Ended June 30,				For the Six Months Ended June 30,
	2012		2011		2012		2011
REHI operating income	$	14,756	$	6,687	$	29,150	$	14,149
REHI operating expenses	$	14,557	$	8,745	$	28,067	$	19,291

Other Real Estate Owned—During the six months ended June 30, 2012, the Company sold other real estate owned ("OREO") assets with a carrying value of $149.7 million, primarily comprised of sales of residential property units for which the Company recorded income from sales of $20.0 million. For the three and six months ended June 30, 2012, the Company recorded net impairment charges to OREO properties totaling $1.3 million and $3.9 million, respectively, and recorded net expenses related to holding costs for OREO properties of $7.9 million and $16.4 million, respectively.

For the three and six months ended June 30, 2011, the Company recorded net impairment charges to OREO properties totaling $2.8 million and $3.4 million, respectively, and recorded net expenses related to holding costs for OREO properties of $9.3 million and $16.5 million, respectively.