Investments in Foreclosed Real Estate and Distressed Loans

Investments in REO and distressed loans consisted of the following, as of the dates indicated (amounts in thousands):



	July 31, 2015		October 31, 2014
Investment in REO	$	57,524	$	69,799
Investment in distressed loans	1,935		4,001
	$	59,459	$	73,800

In prior periods, we presented our investments in REO and distressed loans in two separate line items on our Condensed Consolidated Balance Sheets. Our Condensed Consolidated Balance Sheet at October 31, 2014, has been reclassified to conform to the fiscal 2015 presentation.

Investments in REO

The table below provides, for the periods indicated, the activity in REO (amounts in thousands):



	Nine months ended July 31,						Three months ended July 31,
	2015			2014			2015			2014
Balance, beginning of period	$	69,799		$	72,972		$	63,680		$	76,652
Additions	2,304			21,203			400			13,167
Sales	(14,139		)	(13,558		)	(6,471		)	(9,366		)
Impairments	(183		)	(1,046		)				(1,044		)
Depreciation	(257		)	(252		)	(85		)	(90		)
Balance, end of period	$	57,524		$	79,319		$	57,524		$	79,319

As of July 31, 2015, approximately $7.3 million and $50.2 million of REO was classified as held-for-sale and held-and-used, respectively. As of July 31, 2014, approximately $2.2 million and $77.1 million of REO was classified as held-for-sale and held-and-used, respectively. The table below provides, for the periods indicated, gains we recorded from the acquisitions of REO through foreclosure (amounts in thousands):



	Nine months ended July 31,				Three months ended July 31,
	2015		2014		2015		2014
Gains from acquisition of REO through foreclosure	$	230	$	4,503	$	—	$	2,980

Investments in Distressed Loans

Our investments in distressed loans represent nonperforming loans classified as nonaccrual in accordance with ASC 310-10, “Receivable.” Interest income is not recognized on nonaccrual loans. When a loan is classified as nonaccrual, any subsequent cash receipt is accounted for using the cost recovery method.