FAIR VALUE (Tables)

12 Months Ended

Dec. 31, 2017

Following is a table summarizing the methods used by management in estimating fair value as of December 31, 2017 and 2016:



	December 31, 2017
	% of Carrying Value
	Mortgage Loans, Net			Real Estate Held for Sale			Other REO
Basis for valuation	#	Percent		#	Percent		#	Percent
Third party valuations	2	50	%	1	50	%	—	—	%
Third party offers	—	—	%	1	50	%	4	27	%
Management analysis	2	50	%	—	—	%	11	73	%
Total portfolio	4	100	%	2	100	%	15	100	%



	December 31, 2016
	% of Carrying Value
	Mortgage Loans, Net			Real Estate Held for Sale			Other REO
Basis for valuation	#	Percent		#	Percent		#	Percent
Third party valuations	—	—	%	—	—	%	—	—	%
Third party offers	—	—	%	4	56	%	1	10	%
Management analysis	3	100	%	6	44	%	6	90	%
Total portfolio	3	100	%	10	100	%	7	100	%

Schedule Of Fair Value Valuation Methodology

A summary of the valuation approaches taken and key assumptions that we utilized to derive fair value, is as follows:



	December 31, 2017
	% of Carrying Value
	Mortgage Loans, Net			Real Estate Held for Sale			Other REO
Valuation methodology	#	Percent		#	Percent		#	Percent
Comparable sales (as-is)	4	100	%	1	50	%	11	73	%
Development approach	—	—	%	—	—	%	—	—	%
Income capitalization approach	—	—	%	—	—	%	—	—	%
Third party offers	—	—	%	1	50	%	4	27	%
Total portfolio	4	100	%	2	100	%	15	100	%



	December 31, 2016
	% of Carrying Value
	Mortgage Loans, Net			Real Estate Held for Sale			Other REO
Valuation methodology	#	Percent		#	Percent		#	Percent
Comparable sales (as-is)	3	100	%	6	44	%	6	90	%
Development approach	—	—	%	—	—	%	—	—	%
Income capitalization approach	—	—	%	—	—	%	—	—	%
Third party offers	—	—	%	4	56	%	1	10	%
Total portfolio	3	100	%	10	100	%	7	100	%

•

For properties that included either unentitled or entitled raw land lacking any vertical or horizontal improvements, given the limited opportunities to exploit real estate and credit markets, the development approach was deemed to be unsupportable because market participant data was insufficient or other assumptions were not readily available. In such cases, the “highest and best use” standard required such property to be classified as “held for investment” purposes until market conditions provide observable development activity to support a valuation model for the development of the planned site. As a result, we utilized a sales comparison approach using available data to determine fair value.


•	For properties containing partially or fully developed lots, the development approach is generally utilized, with assumptions made for pricing trends, absorption projections, holding costs, and the relative risk given these assumptions. There were no properties for which the development approach was utilized as of December 31, 2017 and 2016.

Fair Value, by Balance Sheet Grouping

A summary of our assets measured at fair value on a nonrecurring basis as of December 31, 2017 for which losses were recorded during the year ended December 31, 2017 follows (in thousands):



Description	December 31, 2017		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Impairment Charges
Mortgage loans, net	$	—	$	—	$	—	$	—
REO held for sale	$	—	$	—	$	—	$	—
Other REO	$	4,638	$	—	$	4,638	$	744