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Note 7 - Mortgage Loans Held for Sale
 12 Months Ended
Oct. 31, 2016
Notes to Financial Statements  
Loans, Notes, Trade and Other Receivables Disclosure [Text Block]
7.
Mortgage Loans Held for Sale
 
Our mortgage banking subsidiary originates mortgage loans, primarily from the sale of our homes. Such mortgage loans are sold in the
secondary
mortgage market within a short period of time of origination. Mortgage loans held for sale consist primarily of single family residential loans collateralized by the underlying property. We have elected the fair value option to record loans held for sale and therefore these loans are recorded at fair value with the changes in the value recognized in the Consolidated Statements of Operations in “Revenues: Financial services.” We currently use forward sales of mortgage backed securities (“MBS”), interest rate commitments from borrowers and mandatory and/or best efforts forward commitments to sell loans to
third
party purchasers to protect us from interest rate fluctuations. These short term instruments, which do not require any payments to be made to the counterparty or purchaser in connection with the execution of the commitments, are recorded at fair value. Gains and losses on changes in the fair value are recognized in the Consolidated Statements of Operations in “Revenues: Financial services.”
 
At
October
31,
2016
and
2015,
$147.4
million and
$114.0
million, respectively, of mortgages held for sale were pledged against our mortgage warehouse lines of credit (see Note
8).
We
may
incur losses with respect to mortgages that were previously sold that are delinquent and which had underwriting defects, but only to the extent the losses are not covered by mortgage insurance or resale value of the home. The reserves for these estimated losses are included in the “Financial services – Accounts payable and other liabilities” balances on the Consolidated Balance Sheets. As of
October 31, 2016
and
2015,
we had reserves specifically for
130
and
131
identified mortgage loans, respectively, as well as reserves for an estimate for future losses on mortgages sold but not yet identified to us.
 
 
The activity in our loan origination reserves in fiscal
2016
and
2015
was as follows:
 
 
 
Year Ended
 
 
 
October 31,
 
(In thousands)
 
2016
 
 
2015
 
             
Loan origination reserves, beginning of period
  
$8,025
    
$7,352
  
Provisions for losses during the period
  
261
    
221
  
Adjustments to pre-existing provisions for losses from changes in estimates
  
48
    
452
  
Payments/settlements
 
(197
)
  
-
  
Loan origination reserves, end of period
  
$8,137
    
$8,025