Residential Mortgage Loans, At Fair Value

Certain of the Company’s residential mortgage loans, including distressed residential mortgage loans and second lien mortgages, are presented at fair value on its condensed consolidated balance sheets as a result of a fair value election made at time of acquisition. Subsequent changes in fair value are reported in current period earnings and presented in net gain on residential mortgage loans at fair value on the Company’s condensed consolidated statements of operations.

The Company’s residential mortgage loans at fair value consist of the following as of September 30, 2017 and December 31, 2016, respectively (dollar amounts in thousands):



	Principal		Premium/(Discount)			Unrealized Gains/(Losses)		Carrying Value
September 30, 2017	$	73,546	$	(4,258	)	$	224	$	69,512
December 31, 2016	$	17,540	$	229		$	—	$	17,769

The following table presents the components of net gain on residential mortgage loans at fair value for the nine months ended September 30, 2017 and 2016:



	September 30, 2017		September 30, 2016
Net realized gain on payoff and sale of loans	$	493	$	—
Net unrealized gains	$	224	$	—