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Note 7 - Mortgage Loans Held for Sale
 12 Months Ended
Oct. 31, 2017
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, 2017
and
2016,
$
119.6
million and
$147.4
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, 2017
and
2016,
we had reserves specifically for
45
and
130
identified mortgage loans, respectively, as well as reserves for an estimate for future losses on mortgages sold but
not
yet identified to us. In fiscal
2017,
the adjustment to pre-existing provisions for losses from changes in estimates is primarily due to the settlement of a dispute for significantly less than the amount previously reserved.
 
The activity in our loan origination reserves in fiscal
2017
and
2016
was as follows:
 
   
Year Ended
  
   
October 31,
  
(In thousands)
  
2017
    
2016
  
                 
Loan origination reserves, beginning of period
   $
8,137
     $
8,025
  
Provisions for losses during the period
    
165
      
261
  
Adjustments to pre-existing provisions for losses from changes in estimates
    
(4,571
 )    
48
  
Payments/settlements
    
(573
 )    
(197
)
Loan origination reserves, end of period
   $
3,158
     $
8,137