Loans Held for Sale, at Fair Value

3 Months Ended

Mar. 31, 2018

Loans Receivable Held For Sale Net [Abstract]

Loans Held for Sale, at Fair Value

(9) Loans Held for Sale, at Fair Value

Loans held for sale represent originated loans that are typically sold within 45 days from the date of the mortgage loan is funded. Newmark initially and subsequently measures all loans held for sale at fair value on the accompanying unaudited condensed consolidated balance sheets. The fair value measurement falls within the definition of a Level 2 measurement (significant other observable inputs) within the fair value hierarchy. Electing to use fair value allows a better offset of the change in the 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):

	Cost Basis		Fair Value
March 31, 2018	$	950,514	$	965,639
December 31, 2017	$	360,440	$	362,635

As of March 31, 2018 and December 31, 2017, 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 $4.7 million and $6.5 million for the three months ended March 31, 2018 and 2017, respectively. Interest income on loans held for sale in included in “Management services, servicing fees and other” in Newmark’s unaudited condensed consolidated statements of operations. During the three months ended March 31, 2018 and 2017, Newmark also recognized gains of $15.1 and $2.1 million, respectively, for the change in fair value on loans held for sale.  These gains were included in “Gains from mortgage banking activity/originations, net” in Newmark’s unaudited condensed consolidated statements of operations.