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Fair Value Disclosures
9 Months Ended
Sep. 30, 2011
Fair Value Disclosures [Abstract] 
Fair Value Disclosures
9.   Fair value disclosures

ASC 820, "Fair Value Measurements and Disclosures," provides a framework for measuring fair value in generally accepted accounting principles and establishes a fair value hierarchy which requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. The fair value hierarchy can be summarized as follows:

 

  Level 1 Fair value determined based on quoted prices in active markets for identical assets or liabilities.

 

  Level 2 Fair value determined using significant observable inputs, generally either quoted prices in active markets for similar assets or liabilities or quoted prices in markets that are not active.

 

  Level 3 Fair value determined using significant unobservable inputs, such as pricing models, discounted cash flows, or similar techniques.

The Company's financial instruments measured at fair value on a recurring basis are summarized below ($000's omitted):

 

            Fair Value  

Financial Instrument

    Fair Value
Hierarchy		      September 30,
2011		     December 31,
2010		  

Residential mortgage loans available-for-sale

      Level 2       $ 173,956      $ 176,164   

Interest rate lock commitments

      Level 2         7,153        2,692   

Forward contracts

      Level 2         (6,218 )      3,544   

Whole loan commitments

      Level 2         64        2,319   

See Note 1 of these Consolidated Financial Statements regarding the fair value of mortgage loans available-for-sale and derivative instruments and hedging activities.

In addition, certain of the Company's assets are required to be recorded at fair value on a non-recurring basis when events and circumstances indicate that the carrying value may not be recoverable. The Company's assets measured at fair value on a non-recurring basis are summarized below ($000's omitted):

 

          Fair Value  
     Fair Value
Hierarchy		    September 30,
2011		      December 31,
2010		  

Loans held for investment

    Level 2    $ 2,016       $ 3,002   

House and land inventory

    Level 3      6,416         70,862   

The fair values included in the table above represent only those assets whose carrying values were adjusted to fair value in the current quarter. The Company measured certain of its loans held for investment at fair value because the cost of the loans exceeded their fair value. Fair value of the loans was determined based on the fair value of the underlying collateral. For house and land inventory, see Note 4 of these Consolidated Financial Statements for a more detailed discussion of the valuation method used.

The carrying amounts of cash and equivalents and restricted cash approximate their fair values due to their short-term nature. The fair values of senior notes are based on quoted market prices, when available. If quoted market prices are not available, fair values are based on quoted market prices of similar issues. The fair value of the senior notes outstanding approximated $3.0 billion at September 30, 2011 and $3.2 billion at December 31, 2010. The carrying values of the senior notes are presented in Note 10. The carrying value of collateralized short-term debt approximates fair value.