Document and Entity Information	9 Months Ended
Document and Entity Information	Sep. 30, 2012	Nov. 07, 2012
Document and Entity Information
Entity Registrant Name	Tree.com, Inc.
Entity Central Index Key	0001434621
Document Type	10-Q
Document Period End Date	Sep. 30, 2012
Amendment Flag	false
Current Fiscal Year End Date	--12-31
Entity Current Reporting Status	Yes
Entity Filer Category	Smaller Reporting Company
Entity Common Stock, Shares Outstanding		11,366,504
Document Fiscal Year Focus	2012
Document Fiscal Period Focus	Q3

CONSOLIDATED STATEMENTS OF OPERATIONS (USD $) In Thousands, except Per Share data, unless otherwise specified	3 Months Ended		9 Months Ended
	Sep. 30, 2012	Sep. 30, 2011	Sep. 30, 2012	Sep. 30, 2011
Revenue	$ 23,296	$ 13,101	$ 53,501	$ 43,951
Costs and expenses
Cost of revenue	1,231	1,001	2,830	3,529
Selling and marketing expense	13,376	8,475	34,997	39,246
General and administrative expense	5,532	4,388	16,166	15,059
Product development	853	681	2,383	2,677
Litigation settlements and contingencies	510	212	948	5,206
Restructuring expense (gain)	(48)	498	(109)	990
Amortization of intangibles	101	213	314	787
Depreciation	934	1,393	3,204	3,677
Asset impairments				29,250
Total costs and expenses	22,489	16,861	60,733	100,421
Operating income (loss)	807	(3,760)	(7,232)	(56,470)
Other expense
Interest expense	(349)	(110)	(606)	(266)
Total other expense, net	(349)	(110)	(606)	(266)
Income (loss) before income taxes	458	(3,870)	(7,838)	(56,736)
Income tax benefit (provision)	(188)	464	3,086	12,128
Net income (loss) from continuing operations	270	(3,406)	(4,752)	(44,608)
Gain from sale of discontinued operations, net of tax		7,752	24,313	7,752
Income (loss) from operations of discontinued operations, net of tax	4,112	8,969	24,745	(23,829)
Income (loss) from discontinued operations	4,112	16,721	49,058	(16,077)
Net income (loss) attributable to common shareholders	$ 4,382	$ 13,315	$ 44,306	$ (60,685)
Weighted average common shares outstanding (in shares)	11,389	11,037	11,293	10,978
Weighted average diluted shares outstanding (in shares)	12,003	11,037	11,293	10,978
Net income (loss) per share from continuing operations
Basic (in dollars per share)	$ 0.02	$ (0.31)	$ (0.42)	$ (4.06)
Diluted (in dollars per share)	$ 0.02	$ (0.31)	$ (0.42)	$ (4.06)
Net income (loss) per share from discontinued operations
Basic (in dollars per share)	$ 0.36	$ 1.52	$ 4.34	$ (1.47)
Diluted (in dollars per share)	$ 0.35	$ 1.52	$ 4.34	$ (1.47)
Net income (loss) per share attributable to common shareholders
Basic (in dollars per share)	$ 0.38	$ 1.21	$ 3.92	$ (5.53)
Diluted (in dollars per share)	$ 0.37	$ 1.21	$ 3.92	$ (5.53)

CONSOLIDATED BALANCE SHEETS (USD $) In Thousands, unless otherwise specified	Sep. 30, 2012	Dec. 31, 2011
ASSETS:
Cash and cash equivalents	$ 89,780	$ 45,541
Restricted cash and cash equivalents	29,425	12,451
Accounts receivable, net of allowance of $94 and $86, respectively	10,415	5,474
Prepaid and other current assets	1,524	1,060
Current assets of discontinued operations	479	232,425
Total current assets	131,623	296,951
Property and equipment, net	6,924	8,375
Goodwill	3,632	3,632
Intangible assets, net	10,874	11,189
Other non-current assets	166	246
Non-current assets of discontinued operations	236	10,947
Total assets	153,455	331,340
LIABILITIES:
Accounts payable, trade	3,963	9,072
Deferred revenue	1,162	176
Deferred income taxes	4,335	4,335
Accrued expenses and other current liabilities	17,367	16,712
Current liabilities of discontinued operations	31,784	250,030
Total current liabilities	58,611	280,325
Income taxes payable		7
Other long-term liabilities	1,094	4,070
Deferred income taxes	568	435
Non-current liabilities of discontinued operations	331	1,032
Total liabilities	60,604	285,869
Commitments and contingencies (Note 9)
SHAREHOLDERS' EQUITY:
Preferred stock $.01 par value; authorized 5,000,000 shares; none issued or outstanding
Common stock $.01 par value; authorized 50,000,000 shares; issued 12,546,501 and 12,169,226 shares, respectively, and outstanding 11,393,804 and 11,045,965 shares, respectively	125	121
Additional paid-in capital	915,417	911,987
Accumulated deficit	(813,799)	(858,105)
Treasury stock of 1,152,697 and 1,123,261 shares, respectively	(8,892)	(8,532)
Total shareholders' equity	92,851	45,471
Total liabilities and shareholders' equity	$ 153,455	$ 331,340

CONSOLIDATED BALANCE SHEETS (Parenthetical) (USD $) In Thousands, except Share data, unless otherwise specified	Sep. 30, 2012	Dec. 31, 2011
CONSOLIDATED BALANCE SHEETS
Accounts receivable, allowance (in dollars)	$ 94	$ 86
Preferred stock, par value (in dollars per share)	$ 0.01	$ 0.01
Preferred stock, authorized shares	5,000,000	5,000,000
Preferred stock, issued shares	0	0
Preferred stock, outstanding shares	0	0
Common stock, par value (in dollars per share)	$ 0.01	$ 0.01
Common stock, authorized shares	50,000,000	50,000,000
Common stock, issued shares	12,546,501	12,169,226
Common stock, outstanding shares	11,393,804	11,045,965
Treasury stock, shares	1,152,697	1,123,261

CONSOLIDATED STATEMENT OF SHAREHOLDERS' EQUITY (USD $) In Thousands, unless otherwise specified	Total	Common Stock	Additional Paid-in Capital	Accumulated Deficit	Treasury Stock
Balance at Dec. 31, 2011	$ 45,471	$ 121	$ 911,987	$ (858,105)	$ (8,532)
Balance (in shares) at Dec. 31, 2011		12,169			1,123
Comprehensive income:
Net income for the nine months ended September 30, 2012	44,306			44,306
Non-cash compensation	3,735		3,735
Issuance of common stock upon exercise of stock options and vesting of restricted stock units, net of withholding taxes	(301)	4	(305)
Issuance of common stock upon exercise of stock options and vesting of restricted stock units, net of withholding taxes (in shares)		377
Purchase of treasury stock	(360)				(360)
Purchase of treasury stock (in shares)					30
Balance at Sep. 30, 2012	$ 92,851	$ 125	$ 915,417	$ (813,799)	$ (8,892)
Balance (in shares) at Sep. 30, 2012		12,546			1,153

- Definition

Total of all stockholders' equity (deficit) items, net of receivables from officers, directors, owners, and affiliates of the entity which are attributable to the parent. The amount of the economic entity's stockholders' equity attributable to the parent excludes the amount of stockholders' equity which is allocable to that ownership interest in subsidiary equity which is not attributable to the parent (noncontrolling interest, minority interest). This excludes temporary equity and is sometimes called permanent equity.

+ References+ Details

- Definition

Equity impact of the cost of common and preferred stock that were repurchased during the period. Recorded using the cost method.

+ References+ Details

CONSOLIDATED STATEMENTS OF CASH FLOWS (USD $) In Thousands, unless otherwise specified	9 Months Ended
	Sep. 30, 2012	Sep. 30, 2011
Cash flows from operating activities attributable to continuing operations:
Net income (loss)	$ 44,306	$ (60,685)
Less (income) loss from discontinued operations, net of tax	(49,058)	16,077
Net income (loss) from continuing operations	(4,752)	(44,608)
Adjustments to reconcile net loss from continuing operations to net cash used in operating activities attributable to continuing operations:
Loss on disposal of fixed assets	344	210
Amortization of intangibles	314	787
Depreciation	3,204	3,677
Intangible impairment		29,250
Non-cash compensation expense	3,565	2,731
Deferred income taxes	134	(12,144)
Bad debt expense (recovery)	(4)	32
Changes in current assets and liabilities:
Accounts receivable	(4,938)	(1,911)
Prepaid and other current assets	401	(122)
Accounts payable and other current liabilities	(2,492)	385
Income taxes payable	(658)	(58)
Deferred revenue	986	(96)
Other, net	(410)	988
Net cash used in operating activities attributable to continuing operations	(4,306)	(20,879)
Cash flows from investing activities attributable to continuing operations:
Capital expenditures	(2,046)	(5,480)
Increase in restricted cash	(4,047)	(1,488)
Net cash used in investing activities attributable to continuing operations	(6,093)	(6,968)
Cash flows from financing activities attributable to continuing operations:
Vesting and issuance of common stock, net of withholding taxes	(301)	(950)
Purchase of treasury stock	(360)
(Increase) decrease in restricted cash	4,150	(3,325)
Net cash provided by (used in) financing activities attributable to continuing operations	3,489	(4,275)
Total cash used in continuing operations	(6,910)	(32,122)
Net cash provided by (used in) operating activities attributable to discontinued operations	222,885	(58,317)
Net cash provided by (used in) investing activities attributable to discontinued operations	25,923	(9,310)
Net cash provided by (used in) financing activities attributable to discontinued operations	(197,659)	41,261
Total cash provided by (used in) discontinued operations	51,149	(26,366)
Net increase (decrease) in cash and cash equivalents	44,239	(58,488)
Cash and cash equivalents at beginning of period	45,541	68,819
Cash and cash equivalents at end of period	$ 89,780	$ 10,331

ORGANIZATION

9 Months Ended

Sep. 30, 2012

ORGANIZATION

ORGANIZATION

NOTE 1—ORGANIZATION

Company Overview

Tree.com, Inc. (“we”, “Tree.com” or the “Company”) is the parent of LendingTree, LLC, which owns several brands and businesses that provide information, tools, advice, products and services for critical transactions in consumers’ lives. Our family of brands includes: LendingTree.com®, GetSmart®, DegreeTree®, LendingTreeAutos, DoneRight®, ServiceTreeSM, InsuranceTree® and HealthTree. Together, these brands serve as an ally for consumers who are looking to comparison shop for loans and other services from multiple businesses and professionals who will compete for their business. We refer to the collection of these brands and businesses as our Exchanges business, which comprises our continuing operations, as detailed herein.

Segment Reporting

Through the quarter ended March 31, 2011, we operated in two reportable business segments: LendingTree Loans and Exchanges. Until the completion on June 6, 2012 of the sale of substantially all of the operating assets of our LendingTree Loans business to a wholly-owned subsidiary of Discover Financial Services, discussed below and in Note 6, the LendingTree Loans segment originated, processed, approved and funded various residential real estate loans through Home Loan Center, Inc. dba LendingTree Loans (“HLC”). The business operated by HLC under the HLC and LendingTree Loans brand names is referred to in this report as “LendingTree Loans.” Discover Financial Services and/or any of its affiliates are collectively referred to in this report as “Discover.”

The Exchanges segment consists of online lead generation networks and call centers that connect consumers and service providers principally in the lending, higher education, automobile, home services and insurance marketplaces.

In connection with entering into the agreement in the second quarter of 2011 that provided for the sale of substantially all of the operating assets of our LendingTree Loans business, management re-evaluated its reporting segments based on our continuing operations and determined that our continuing operations were one reportable segment, which represents the previous “Exchanges” segment. Prior period results have been reclassified to conform with discontinued operations presentation and the change in reportable segments.

We maintain operations solely in the United States.

Discontinued Operations

The businesses of RealEstate.com and RealEstate.com, REALTORS® (which together represent the former Real Estate segment) and LendingTree Loans are presented as discontinued operations in the accompanying consolidated balance sheets and consolidated statements of operations and cash flows for all periods presented. The notes accompanying these consolidated financial statements reflect our continuing operations and, unless otherwise noted, exclude information related to the discontinued operations.

Real Estate

LendingTree Loans

On May 12, 2011, we entered into an asset purchase agreement, as amended by an amendment to the asset purchase agreement dated as of February 7, 2012, for the sale of substantially all of the operating assets of our LendingTree Loans business. We completed the sale on June 6, 2012.

The asset purchase agreement as amended provided for a purchase price of approximately $55.9 million in cash for the assets, subject to certain conditions. Of this total purchase price, $8.0 million was paid prior to the closing, $37.9 million was paid upon the closing and $10.0 million is due on the first anniversary of the closing, subject to us meeting certain conditions.

Discover generally did not assume liabilities of the LendingTree Loans business that arose before the closing date, except for certain liabilities directly related to assets Discover acquired. Approximately $17.1 million of the initial purchase price payment is being held in escrow pending resolution of certain actual and/or contingent liabilities that remain with us following the sale. The escrowed amount is recorded as restricted cash at September 30, 2012.

Separate from the asset purchase agreement, we agreed to provide certain marketing-related services to Discover in connection with its mortgage origination business for approximately seventeen months following the closing, or such earlier point as the agreed-upon services are satisfactorily completed. Discover is also now a participating lender on our lending network.

The unaudited pro forma financial information in the table below summarizes our results as if the sale of substantially all of the operating assets of LendingTree Loans had occurred as of January 1, 2011. The unaudited pro forma financial information is presented for informational purposes only and is not necessarily indicative of what the results would have been had the sale occurred as of January 1, 2011.

	Nine Months Ended September 30, 2012			Nine Months Ended September 30, 2011
Revenue	$	53,501		$	43,951
Net loss from continuing operations	(4,752		)	(44,608		)
Net loss attributable to common shareholders	(4,752		)	(44,608		)
Basic earnings per share attributable to common shareholders	(0.42		)	(4.06		)
Diluted earnings per share attributable to common shareholders	(0.42		)	(4.06		)

Business Combinations

On March 15, 2011, our wholly-owned subsidiary, HLC, completed its acquisition of certain assets of First Residential Mortgage Network, Inc. dba SurePoint Lending, pursuant to an asset purchase agreement dated November 15, 2010. SurePoint, a LendingTree network lender for eleven years, was a full-service residential mortgage provider licensed in 45 states and employed over 500 people, including more than 300 licensed loan officers. HLC purchased certain specified assets and assumed certain liabilities of SurePoint related to its business of originating, refinancing, processing, underwriting, funding and closing residential mortgage loans; providing title and escrow services; and providing other mortgage-related services. The acquired assets also included the equity interests of Real Estate Title Services, LLC. HLC paid $8.0 million in cash upon the closing of the transaction, subject to certain adjustments as described in the asset purchase agreement, and $0.2 million in cash for contingent consideration subsequent to the close. HLC used available cash to fund the acquisition.

This asset purchase was accounted for under the acquisition method of accounting. Accordingly, the purchase price was allocated to the acquired assets and liabilities based on their estimated fair values at the acquisition date. The purchase price was allocated as $5.6 million to goodwill, $0.7 million to intangible assets with useful lives of three months to five years, and $1.7 million to equipment and other assets. The pro forma effect of this purchase was not material to our results of operations.

Correction of an Error

As disclosed in our Form 10-K for the year ended December 31, 2011, during the process of preparing our financial statements for the year ended December 31, 2011, we determined that a $29.0 million impairment charge related to trade names and trademarks that we determined to exist as of October 1, 2011, as determined in our annual impairment testing, should have been recorded in the second quarter of 2011 pursuant to the impairment test we performed as a result of our entry into the asset purchase agreement for the sale of substantially all of the assets of our LendingTree Loans business. As a result of this error, certain previously reported amounts in the condensed consolidated financial statements for the quarter ended September 30, 2011 were materially misstated; accordingly we have restated the prior period financial statements.

The restated condensed consolidated statement of operations for the three months ended September 30, 2011 is as follows:

	As Previously Presented			Impairment Correction		As Restated
Income tax benefit	$	185		$	279	$	464
Net loss from continuing operations	(3,685		)	279		(3,406		)
Income from operations of discontinued operations, net of tax	8,531			438		8,969
Income from discontinued operations	16,283			438		16,721
Net income attributable to common shareholders	12,598			717		13,315
Basic and diluted net loss per share from continuing operations	(0.33		)	0.02		(0.31		)
Basic and diluted net income per share from discontinued operations	1.47			0.05		1.52
Basic and diluted net income per share attributable to common shareholders	1.14			0.07		1.21

The restated condensed consolidated statement of operations for the nine months ended September 30, 2011 is as follows:

	As Previously Presented			Impairment Correction			As Restated
Asset impairments	$	250		$	29,000		$	29,250
Total costs and expenses	71,421			29,000			100,421
Operating loss	(27,470		)	(29,000		)	(56,470		)
Loss before income taxes	(27,736		)	(29,000		)	(56,736		)
Income tax benefit (provision)	(117		)	12,245			12,128
Net loss from continuing operations	(27,853		)	(16,755		)	(44,608		)
Loss from operations of discontinued operations, net of tax	(24,615		)	786			(23,829		)
Loss from discontinued operations	(16,863		)	786			(16,077		)
Net loss attributable to common shareholders	(44,716		)	(15,969		)	(60,685		)
Basic and diluted net loss per share from continuing operations	(2.54		)	(1.52		)	(4.06		)
Basic and diluted net loss per share from discontinued operations	(1.53		)	0.06			(1.47		)
Basic and diluted net loss per share from attributable to common shareholders	(4.07		)	(1.46		)	(5.53		)

The restated cash flows from operating activities section of the condensed consolidated statement of cash flows for the nine months ended September 30, 2011 is as follows:

	As Previously Presented			Impairment Correction			As Restated
Cash Flows from Operating Activities:
Net loss	$	(44,716	)	$	(15,969	)	$	(60,685	)
Less loss from discontinued operations, net of tax	16,863			(786		)	16,077
Net loss from continuing operations	(27,853		)	(16,755		)	(44,608		)
Intangible impairment	250			29,000			29,250
Deferred income taxes	101			(12,245		)	(12,144		)

Out of Period Adjustment

Our results of operations for the three and nine months ended September 30, 2012 include a reduction to net income of approximately $0.3 million resulting from additional interest expense related to our shares of Series A Redeemable Preferred Stock of a wholly-owned subsidiary of Tree.com that should have been recorded as a reduction to net income or increase to net loss from the third quarter of 2008 through the third quarter of 2012. Because the amounts are not material to our consolidated financial statements in any prior period, and the cumulative amount is not expected to be material to the results of operations for the full year 2012, we recorded the cumulative effect of correcting these items during the three months ended September 30, 2012.

Basis of Presentation

The accompanying unaudited interim consolidated financial statements as of September 30, 2012 and 2011 and for the three and nine months then ended have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) for interim financial information and the rules and regulations of the U.S. Securities and Exchange Commission (“SEC”). Accordingly, they do not include all of the information and footnotes required by generally accepted accounting principles for annual financial statements. In the opinion of management, the unaudited interim consolidated financial statements have been prepared on the same basis as the audited financial statements, and include all adjustments, consisting only of normal recurring adjustments, necessary for the fair presentation of our financial position for the periods presented. The results for the three and nine months ended September 30, 2012 are not necessarily indicative of the results to be expected for the year ending December 31, 2012, or any other period. These financial statements and notes should be read in conjunction with the audited financial statements and notes thereto included in our annual report on Form 10-K for the year ended December 31, 2011.

- Definition

The entire disclosure for organization, consolidation and basis of presentation of financial statements disclosure.

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+ Details

SIGNIFICANT ACCOUNTING POLICIES

9 Months Ended

Sep. 30, 2012

SIGNIFICANT ACCOUNTING POLICIES

SIGNIFICANT ACCOUNTING POLICIES

NOTE 2—SIGNIFICANT ACCOUNTING POLICIES

Accounting Estimates

Management is required to make certain estimates and assumptions during the preparation of the consolidated financial statements in accordance with GAAP. These estimates and assumptions impact the reported amount of assets and liabilities and disclosures of contingent assets and liabilities as of the date of the consolidated financial statements. They also impact the reported amount of net earnings during any period. Actual results could differ from those estimates.

Significant estimates underlying the accompanying consolidated financial statements, including discontinued operations, include: valuation allowance for impaired loans held for sale; loan loss obligations; the fair value of loans held for sale and related derivatives; the recoverability of long-lived assets, goodwill and intangible assets; the determination of income taxes payable and deferred income taxes, including related valuation allowances; restructuring reserves; contingent consideration related to business combinations; various other allowances, reserves and accruals; and assumptions related to the determination of stock-based compensation.

Concentrations

One customer on our networks accounted for revenue representing 22% and 11% for the three and nine months ended September 30, 2012, respectively. No customer accounted for more than 10% of revenue for the three or nine months ended September 30, 2011.

Cash and Cash Equivalents

Cash and cash equivalents include cash and short-term, highly liquid money market investments with original maturities of three months or less.

Restricted Cash

Restricted cash and cash equivalents consists of the following (in thousands):

	September 30, 2012		December 31, 2011
Cash in escrow for loan loss obligations	$	20,127	$	—
Cash in escrow for surety bonds	6,501		6,500
Cash in escrow for corporate purchasing card program	800		800
Minimum required balances for warehouse lines of credit	—		4,250
Other	1,997		901
Total restricted cash and cash equivalents	$	29,425	$	12,451

Cash in escrow for loan loss obligations includes $17.1 million held in escrow pursuant to the asset purchase agreement for the sale of substantially all of the operating assets of our LendingTree Loans business, pending the resolution of certain actual and/or contingent liabilities that remain with us following the closing of such sale, and $3.0 million is held by an investor that purchased loans from LendingTree Loans to secure potential loan loss obligations.

Revenue Recognition

Revenue principally represents match fees and closed-loan fees paid by lenders that received a transmitted loan request and/or closed a loan for a consumer that originated through one of our websites or affiliates. Revenue also includes match fees paid by institutions of higher education and businesses and professionals in the automobile, home services and insurance industries for a transmitted lead or service request. Match fees are recognized at the time qualification forms are transmitted. Closed-loan fees are recognized at the time the lender reports the closed loan to us, which may be several months after the loan request is transmitted. Revenue also includes fees paid by advertisers on our websites. In addition, during the nine months ended September 30, 2012, we recognized approximately $1.3 million of revenue from marketing-related services provided to Discover discussed above, which is recognized in the period the services are provided.

Recent Accounting Pronouncements

In May 2011, the FASB issued amendments to the fair value accounting guidance. The amendments clarify the application of the highest and best use, and valuation premise concepts, preclude the application of blockage factors in the valuation of all financial instruments and include criteria for applying the fair value measurement principles to portfolios of financial instruments. The amendments additionally prescribe enhanced financial statement disclosures for Level 3 fair value measurements. The new amendments were effective on January 1, 2012. The adoption of this guidance did not have a material impact on our consolidated financial statements. See Note 6 for further information.

In September 2011, the FASB issued the updated accounting standard on testing goodwill for impairment. The update simplifies how an entity tests goodwill for impairment. The amendments allow both public and nonpublic entities an option to first assess qualitative factors to determine whether it is necessary to perform the two-step quantitative goodwill impairment test. Under that option, an entity no longer would be required to calculate the fair value of a reporting unit unless the entity determines, based on that qualitative assessment, that it is more likely than not that its fair value is less than its carrying amount. The amendments were effective for annual and interim goodwill impairment tests performed for fiscal years beginning after December 15, 2011. The adoption of this guidance did not have a material impact on our consolidated financial statements.

In December 2011, the FASB issued new accounting guidance that requires additional disclosures on financial instruments and derivative instruments that are either offset in accordance with existing accounting guidance or are subject to an enforceable master netting arrangement or similar agreement. The new requirements do not change the accounting guidance on netting, but rather enhance the disclosures to more clearly show the impact of netting arrangements on a company’s financial position. This new accounting guidance will be effective, on a retrospective basis for all comparative periods presented, beginning on January 1, 2013. The adoption of this guidance is not expected to have a material impact on our consolidated financial statements.

In July 2012, the FASB issued new guidance which allows an entity to first assess qualitative factors to determine whether the existence of events and circumstances indicates that it is more likely than not that the indefinite-lived intangible asset is impaired. This assessment should be used as a basis for determining whether it is necessary to perform the quantitative impairment test. An entity would not be required to calculate the fair value of the intangible asset and perform the quantitative test unless the entity determines, based upon its qualitative assessment, that it is more likely than not that its fair value is less than its carrying value. The update expands previous guidance by providing more examples of events and circumstances that an entity should consider in determining whether it is more likely than not that the fair value of an indefinite-lived intangible asset is less than its carrying amount. The update also allows an entity the option to bypass the qualitative assessment for any indefinite-lived intangible asset in any period and proceed directly to performing the quantitative impairment test. An entity will be able to resume performing the qualitative assessment in any subsequent period. This update is effective for annual and interim periods beginning after September 15, 2012, with early adoption permitted. The adoption of this guidance is not expected to have a material impact on our consolidated financial statements.

- Definition

The entire disclosure for all significant accounting policies of the reporting entity.

+ References+ Details

GOODWILL AND INTANGIBLE ASSETS

9 Months Ended

Sep. 30, 2012

GOODWILL AND INTANGIBLE ASSETS

GOODWILL AND INTANGIBLE ASSETS

NOTE 3—GOODWILL AND INTANGIBLE ASSETS

The balance of goodwill and intangible assets, net is as follows (in thousands):

	September 30, 2012		December 31, 2011
Goodwill	$	3,632	$	3,632
Intangible assets with indefinite lives	$	10,142	$	10,142
Intangible assets with definite lives, net	732		1,047
Total intangible assets, net	$	10,874	$	11,189

Intangible assets with indefinite lives relate principally to the LendingTree trademark.

At September 30, 2012, intangible assets with definite lives relate to the following (in thousands):

	Cost		Accumulated Amortization			Net		Weighted Average Amortization Life (Years)
Purchase agreements	$	50,411	$	(50,329	)	$	82	5.0
Technology	25,194		(25,142		)	52		3.0
Customer lists	6,682		(6,090		)	592		4.2
Other	1,516		(1,510		)	6		2.5
Total	$	83,803	$	(83,071	)	$	732

At December 31, 2011, intangible assets with definite lives relate to the following (in thousands):

	Cost		Accumulated Amortization			Net		Weighted Average Amortization Life (Years)
Purchase agreements	$	50,411	$	(50,293	)	$	118	5.0
Technology	25,194		(25,034		)	160		3.0
Customer lists	6,682		(6,045		)	637		4.2
Other	1,516		(1,384		)	132		2.5
Total	$	83,803	$	(82,756	)	$	1,047

Amortization of intangible assets with definite lives is computed on a straight-line basis and, based on September 30, 2012 balances, such amortization for the next five years is estimated to be as follows (in thousands):

	Amount
Three months ending December 31, 2012	$	43
Year ending December 31, 2013	147
Year ending December 31, 2014	86
Year ending December 31, 2015	60
Year ending December 31, 2016	60
Thereafter	336
Total	$	732

- Definition

The entire disclosure for the aggregate amount of goodwill and a description of intangible assets, which may include (a) for amortizable intangible assets (also referred to as finite-lived intangible assets), the carrying amount, the amount of any significant residual value, and the weighted-average amortization period, (b) for intangible assets not subject to amortization (also referred to as indefinite-lived intangible assets), the carrying amount, and (c) the amount of research and development assets acquired and written off in the period, including the line item in the income statement in which the amounts written off are aggregated, if not readily apparent from the income statement. Also discloses (a) for amortizable intangibles assets in total and by major class, the gross carrying amount and accumulated amortization, the total amortization expense for the period, and the estimated aggregate amortization expense for each of the five succeeding fiscal years, (b) for intangible assets not subject to amortization the carrying amount in total and by major class, and (c) for goodwill, in total and for each reportable segment, the changes in the carrying amount of goodwill during the period (including the aggregate amount of goodwill acquired, the aggregate amount of impairment losses recognized, and the amount of goodwill included in the gain (loss) on disposal of a reporting unit). If any part of goodwill has not been allocated to a reportable segment, discloses the unallocated amount and the reasons for not allocating. For each impairment loss recognized related to an intangible asset (excluding goodwill), discloses: (a) a description of the impaired intangible asset and the facts and circumstances leading to the impairment, (b) the amount of the impairment loss and the method for determining fair value, (c) the caption in the income statement or the statement of activities in which the impairment loss is aggregated, and (d) the segment in which the impaired intangible asset is reported. For each goodwill impairment loss recognized, discloses: (a) a description of the facts and circumstances leading to the impairment, (b) the amount of the impairment loss and the method of determining the fair value of the associated reporting unit, and (c) if a recognized impairment loss is an estimate not finalized and the reasons why the estimate is not final. May also disclose the nature and amount of any significant adjustments made to a previous estimate of an impairment loss.

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PROPERTY AND EQUIPMENT

9 Months Ended

Sep. 30, 2012

PROPERTY AND EQUIPMENT

PROPERTY AND EQUIPMENT

NOTE 4—PROPERTY AND EQUIPMENT

The balance of property and equipment, net is as follows (in thousands):

	September 30, 2012			December 31, 2011
Computer equipment and capitalized software	$	26,571		$	24,940
Leasehold improvements	2,055			2,042
Furniture and other equipment	1,488			1,450
Projects in progress	612			826
	30,726			29,258
Less: accumulated depreciation and amortization	(23,802		)	(20,883		)
Total property and equipment, net	$	6,924		$	8,375

- Definition

The entire disclosure for long-lived, physical assets that are used in the normal conduct of business to produce goods and services and not intended for resale. Examples include land, buildings, machinery and equipment, and other types of furniture and equipment including, but not limited to, office equipment, furniture and fixtures, and computer equipment and software. This disclosure may include property plant and equipment accounting policies and methodology, a schedule of property, plant and equipment gross, additions, deletions, transfers and other changes, depreciation, depletion and amortization expense, net, accumulated depreciation, depletion and amortization expense and useful lives, income statement disclosures, assets held for sale and public utility disclosures.

+ References+ Details

ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES

9 Months Ended

Sep. 30, 2012

ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES

ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES

NOTE 5—ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES

Accrued expenses and other current liabilities consist of the following (in thousands):

	September 30, 2012		December 31, 2011
Litigation accruals	$	500	$	3,077
Accrued advertising expense	5,044		2,659
Accrued compensation and benefits	4,776		624
Accrued professional fees	1,019		635
Accrued restructuring costs	341		439
Customer deposits and escrows	1,941		2,211
Deferred rent	212		186
Other	3,534		6,881
Total accrued expenses and other current liabilities	$	17,367	$	16,712

Accrued compensation and benefits at September 30, 2012 includes $3.1 million of compensation that was previously classified as a long-term liability, but became a current liability in the third quarter of 2012 as the amount is payable within twelve months of September 30, 2012. See Note 10—Subsequent Event for further information. The other category above reflects franchise taxes, self-insured health claims and other miscellaneous accrued expenses.

An additional $0.6 million and $0.9 million of accrued restructuring liabilities are classified in other long term liabilities at September 30, 2012 and December 31, 2011, respectively.

DISCONTINUED OPERATIONS

9 Months Ended

Sep. 30, 2012

DISCONTINUED OPERATIONS

DISCONTINUED OPERATIONS

NOTE 6—DISCONTINUED OPERATIONS

On March 10, 2011, management made the decision and finalized a plan to close all of the field offices of the proprietary full-service real estate brokerage business known as RealEstate.com, REALTORS®. We exited all markets by March 31, 2011. In September 2011, we sold the remaining assets of RealEstate.com, which consisted primarily of internet domain names and trademarks. Accordingly, these Real Estate businesses are presented as discontinued operations in the accompanying consolidated balance sheets and consolidated statements of operations and cash flows for all periods presented. No significant future cash flows are anticipated from the disposition of this business.

On May 12, 2011, we entered into an asset purchase agreement that provided for the sale of substantially all of the operating assets of our LendingTree Loans business to Discover. On February 7, 2012, we entered into an amendment to the asset purchase agreement. We completed the sale on June 6, 2012. Discover is now a participating lender on our lending network. We have evaluated the facts and circumstances of the transaction and the applicable accounting guidance for discontinued operations, and have concluded that the LendingTree Loans business should be reflected as discontinued operations in the accompanying consolidated balance sheets and consolidated statements of operations and cash flows for all periods presented. The continuing cash flows related to this transaction are not significant, and accordingly, are not deemed to be direct cash flows of the divested business.

We have agreed to indemnify Discover for a breach or inaccuracy of any representation, warranty or covenant made by us in the asset purchase agreement, for any liability of ours that was not assumed, for any claims by our stockholders against Discover and for our failure to comply with any applicable bulk sales law, subject to certain limitations. Discover has submitted a claim for indemnification relating to our sale prior to the closing of certain loans that were listed in the asset purchase agreement as to be conveyed to Discover at closing. We have evaluated this matter as a potential loss contingency, and have determined that it is probable that a loss could be incurred. We also evaluated a range of potential losses, and a reserve of $1.6 million has been established for this matter, which is reflected as a reduction in gain from sale of discontinued operations and in current liabilities of discontinued operations.

The revenue and net loss for the Real Estate businesses that are reported as discontinued operations for the applicable periods were as follows (in thousands):

	Three Months Ended September 30,
	2012			2011
Revenue	$	2		$	515
Loss before income taxes	$	(282	)	$	(637	)
Income tax provision	—			—
Gain from sale of discontinued operations	—			7,752
Net income (loss)	$	(282	)	$	7,115

	Nine Months Ended September 30,
	2012			2011
Revenue	$	77		$	3,633
Loss before income taxes	$	(442	)	$	(16,936	)
Income tax provision	—			—
Gain from sale of discontinued operations	—			7,752
Net loss	$	(442	)	$	(9,184	)

Net loss for the nine months ended September 30, 2011 includes goodwill disposal charges of $8.0 million, intangible asset impairment charges of $4.1 million and restructuring charges of $2.5 million.

The revenue and net income (loss) for LendingTree Loans that are reported as discontinued operations for the applicable periods were as follows (in thousands):

	Three Months Ended September 30,
	2012			2011
Revenue	$	5,943		$	37,094
Income before income taxes	$	4,470		$	9,606
Income tax provision	(76		)	—
Net income	$	4,394		$	9,606

	Nine Months Ended September 30,
	2012			2011
Revenue	$	87,338		$	81,726
Income (loss) before income taxes	$	27,660		$	(6,893	)
Income tax provision	(2,473		)	—
Gain from sale of discontinued operations, net of tax of $1,267 and $-0-	24,313			—
Net income (loss)	$	49,500		$	(6,893	)

Net income for the nine months ended September 30, 2012 includes intangible asset impairment charges of $1.4 million. Net loss for the nine months ended September 30, 2011 includes restructuring charges of $4.0 million.

The assets and liabilities of Real Estate that are reported as discontinued operations as of September 30, 2012 and December 31, 2011 were as follows (in thousands):

	September 30, 2012			December 31, 2011
Current assets	$	—		$	33
Current liabilities	390			702
Non-current liabilities	—			54
Net liabilities	$	(390	)	$	(723	)

The assets and liabilities of LendingTree Loans that are reported as discontinued operations as of September 30, 2012 and December 31, 2011 were as follows (in thousands):

	September 30, 2012			December 31, 2011
Loans held for sale	$	—		$	217,467
Other current assets	479			14,925
Current assets	479			232,392
Property and equipment	—			4,181
Goodwill	—			5,579
Other non-current assets	236			1,187
Non-current assets	236			10,947
Warehouse lines of credit	—			197,659
Other current liabilities	31,394			56,383
Current liabilities	31,394			254,042
Non-current liabilities	331			978
Net liabilities	$	(31,010	)	$	(11,681	)

Significant Assets and Liabilities of LendingTree Loans

Upon closing of the sale of substantially all of the operating assets of our LendingTree Loans business on June 6, 2012, LendingTree Loans ceased to originate consumer loans and no longer has additional borrowings available under warehouse lines of credit. The remaining operations are being wound down. These wind-down activities have included, among other things, selling the balance of loans held for sale to investors, which is substantially complete, and paying off and then terminating the warehouse lines of credit, which occurred on July 21, 2012. Additionally, liability for losses on previously sold loans will remain with LendingTree Loans. Below is a discussion of these significant items.

Loans Held for Sale

LendingTree Loans originated all of its residential real estate loans with the intent to sell them in the secondary market. Loans held for sale consisted primarily of residential first mortgage loans that were secured by residential real estate throughout the United States.

The following table represents the loans held for sale by type of loan as of September 30, 2012 and December 31, 2011 ($ amounts in thousands):

	September 30, 2012				December 31, 2011
	Amount		%		Amount		%
Conforming	$	—	—	%	$	171,375	79	%
FHA	—		—	%	40,433		18	%
Jumbo	—		—	%	5,659		3	%
Total	$	—	—	%	$	217,467	100	%

The following presents the difference between the aggregate principal balance of loans on nonaccrual status for which the fair value option has been elected and for loans measured at lower of cost or market valuation as of September 30, 2012 and December 31, 2011 (in thousands):

	As of September 30, 2012
	Loans on Nonaccrual— Measured at Fair Value			Loans on Nonaccrual— Measured at LOCOM		Total Loans on Nonaccrual
Aggregate unpaid principal balance	$	412		$	—	$	412
Difference between fair value and aggregate unpaid principal balance	(412		)	—		(412		)
Loans on nonaccrual	$	—		$	—	$	—

	As of December 31, 2011
	Loans on Nonaccrual— Measured at Fair Value			Loans on Nonaccrual— Measured at LOCOM		Total Loans on Nonaccrual
Aggregate unpaid principal balance	$	539		$	—	$	539
Difference between fair value and aggregate unpaid principal balance	(244		)	—		(244		)
Loans on nonaccrual	$	295		$	—	$	295

There is one repurchased loan included within the loans on nonaccrual status at September 30, 2012 and no repurchased loans included within the loans on nonaccrual status at December 31, 2011. During the nine months ended September 30, 2012, LendingTree Loans repurchased two loans with a total unpaid principal balance of $0.7 million. During the nine months ended September 30, 2011, LendingTree Loans did not repurchase any loans.

Fair Value Measurements

We categorize our assets and liabilities measured at fair value into a fair value hierarchy that prioritizes the assumptions used in pricing the asset or liability into the following three levels:

· Level 1: Observable inputs such as quoted prices for identical assets and liabilities in active markets obtained from independent sources.

· Level 2: Other inputs that are observable directly or indirectly, such as quoted prices for similar assets or liabilities in active markets, quoted prices for identical or similar assets or liabilities in markets that are not active and inputs that are derived principally from or corroborated by observable market data.

· Level 3: Unobservable inputs for which there is little or no market data and which require us to develop our own assumptions, based on the best information available in the circumstances, about the assumptions market participants would use in pricing the asset or liability.

A financial instrument’s categorization within the fair value hierarchy is based upon the lowest level of input that is significant to the fair value measurement. Transfers in and out of Level 1, 2 or 3 are recorded at fair value at the beginning of the reporting period.

Following is a description of valuation methodologies used for instruments measured at fair value as well as the general classification of such instruments pursuant to the fair value hierarchy.

LendingTree Loans entered into commitments with consumers to originate loans at specified interest rates (interest rate lock commitments—“IRLCs”). We reported IRLCs as derivative instruments at fair value with changes in fair value being recorded in discontinued operations. IRLCs for loans to be sold to investors using a mandatory or assignment of trade (“AOT”) method were hedged using “to be announced mortgage-backed securities” (“TBA MBS”) and were valued using quantitative risk models. The IRLCs derive their base value from an underlying loan type with similar characteristics using the TBA MBS market, which is actively quoted and easily validated through external sources. The most significant data inputs used in this valuation included, but were not limited to, loan type, underlying loan amount, note rate, loan program, and expected sale date of the loan. IRLCs for loans sold to investors on a best-efforts basis were hedged using best-efforts forward delivery commitments and were valued on an individual loan basis using a proprietary database program prior to January 1, 2012. These valuations were based on investor pricing tables stratified by product, note rate and term. The valuations were adjusted at the loan level to consider the servicing release premium and loan pricing adjustments specific to each loan. Effective January 1, 2012, LendingTree Loans began valuing IRLCs for loans sold to investors on a best-efforts basis using quantitative risk models on a loan level basis. The decision to modify the valuation calculation for IRLCs for loans sold on a best-efforts basis evolved from a desire to achieve principally two goals: 1) to include this portion of the IRLCs into the main operating system we used for fair value (known as QRM), allowing us to improve our estimate of loan funding probability and 2) to include elements of the all-in fair value that we could not previously calculate in the previous models. The most significant data inputs used in the valuation of these IRLCs included, but were not limited to, investor pricing tables stratified by product, note rate and term, adjusted for current market conditions. These valuations were adjusted at the loan level to consider the servicing release premium and loan pricing adjustments specific to each loan. LendingTree Loans applied an anticipated loan funding probability based on its own experience to value IRLCs, which resulted in the classification of these derivatives as Level 3. The value of the underlying loans and the anticipated loan funding probability were the most significant assumptions affecting the valuation of IRLCs. A significant change in the unobservable inputs could have resulted in a significant change in the ending fair value measurement.

Loans held for sale measured at fair value and sold to investors using a mandatory or AOT method were also hedged using TBA MBS and valued using quantitative risk models. The valuation was based on the loan amount, note rate, loan program and expected sale date of the loan. Loans held for sale measured at fair value and sold to investors on a best-efforts basis were hedged using best-efforts forward delivery commitments and were valued using a proprietary database program prior to January 1, 2012. The best-efforts valuations prior to that date were based on daily investor pricing tables stratified by product, note rate and term. These valuations were adjusted at the loan level to consider the servicing release premium and loan pricing adjustments specific to each loan. Effective January 1, 2012, LendingTree Loans began valuing the loans held for sale and sold to investors on a best-efforts basis using quantitative risk models. The most significant data inputs used in the valuation of these loans included investor pricing tables stratified by product, note rate and term, adjusted for current market conditions. Loans held for sale, excluding impaired loans, were classified as Level 2. Loans held for sale measured at fair value that become impaired were transferred from Level 2 to Level 3, as the estimate of fair value was based on LendingTree Loans’ experience considering lien position and current status of the loan. A significant change in the unobservable inputs could have resulted in a significant change in the ending fair value measurement. LendingTree Loans recognized interest income separately from other changes in fair value.

Under LendingTree Loans’ risk management policy, LendingTree Loans economically hedged the changes in fair value of IRLCs and loans held for sale caused by changes in interest rates by using TBA MBS and entering into best-efforts forward delivery commitments. These hedging instruments were recorded at fair value with changes in fair value recorded in current earnings as a component of revenue from the origination and sale of loans. TBA MBS used to hedge both IRLCs and loans were valued using quantitative risk models based primarily on inputs related to characteristics of the MBS stratified by product, coupon and settlement date. These derivatives were classified as Level 2. Prior to January 1, 2012, best-efforts forward delivery commitments were valued using a proprietary database program using investor pricing tables considering the current base loan price. Effective January 1, 2012, best-efforts forward delivery commitments were valued using quantitative risk models based on investor pricing tables stratified by product, note rate and term, adjusted for current market conditions. An anticipated loan funding probability was applied to value best-efforts commitments hedging IRLCs, which resulted in the classification of these contracts as Level 3. The current base loan price and the anticipated loan funding probability were the most significant assumptions affecting the value of the best-efforts commitments. A significant change in the unobservable inputs could have resulted in a significant change in the ending fair value measurement. The best-efforts forward delivery commitments hedging loans held for sale were classified as Level 2, so such contracts were transferred from Level 3 to Level 2 at the time the underlying loan was originated. For the purposes of the tables below, we refer to TBA MBS and best-efforts forward delivery commitments collectively as “Forward Delivery Contracts”.

Assets and liabilities measured at fair value on a recurring basis

The following presents our assets and liabilities that are measured at fair value on a recurring basis at September 30, 2012 and December 31, 2011 (in thousands):

As of September 30, 2012

Recurring Fair Value Measurements Using

Quoted Market
Prices in Active
Markets for
Identical
Assets
(Level 1)

Significant
Other
Observable
Inputs
(Level 2)

Significant
Unobservable
Inputs
(Level 3)

Total
Fair Value
Measurements

Loans held for sale

—

Forward delivery contracts

—

Total

—

	As of December 31, 2011
	Recurring Fair Value Measurements Using
	Quoted Market Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)			Significant Unobservable Inputs (Level 3)		Total Fair Value Measurements
Loans held for sale	$	—	$	217,172		$	295	$	217,467
Interest rate lock commitments (“IRLCs”)	—		—			9,122		9,122
Forward delivery contracts	—		(4,107		)	19		(4,088		)
Total	$	—	$	213,065		$	9,436	$	222,501

The following presents the changes in our assets and liabilities that are measured at fair value on a recurring basis using significant unobservable inputs (Level 3) for the three and nine months ended September 30, 2012 and 2011 (in thousands):

	Three Months Ended September 30, 2012
	Interest Rate Lock Commitments		Forward Delivery Contracts		Loans Held for Sale
Balance at July 1, 2012	$	—	$	—	$	167
Transfers into Level 3	—		—		124
Transfers out of Level 3	—		—		—
Total net gains (losses) included in earnings (realized and unrealized)	—		—		(380		)
Purchases, sales, and settlements
Purchases	—		—		—
Sales	—		—		90
Settlements	—		—		(1		)
Transfers of IRLCs to closed loans	—		—		—
Balance at September 30, 2012	$	—	$	—	$	—

	Nine Months Ended September 30, 2012
	Interest Rate Lock Commitments			Forward Delivery Contracts			Loans Held for Sale
Balance at January 1, 2012	$	9,122		$	19		$	295
Transfers into Level 3	—			—			564
Transfers out of Level 3	—			(845		)	—
Total net gains (losses) included in earnings (realized and unrealized)	73,378			846			(147		)
Purchases, sales, and settlements
Purchases	—			—			—
Sales	(5,640		)	(20		)	(491		)
Settlements	(3,401		)	—			(221		)
Transfers of IRLCs to closed loans	(73,459		)	—			—
Balance at September 30, 2012	$	—		$	—		$	—

	Three Months Ended September 30, 2011
	Interest Rate Lock Commitments			Forward Delivery Contracts			Loans Held for Sale
Balance at July 1, 2011	$	6,278		$	220		$	861
Transfers into Level 3	—			—			72
Transfers out of Level 3	—			(257		)	—
Total net gains (losses) included in earnings (realized and unrealized)	40,680			69			(83		)
Purchases, sales, and settlements
Purchases	—			—			—
Sales	—			—			(538		)
Settlements	(2,255		)	—			(4		)
Transfers of IRLCs to closed loans	(31,956		)	—			—
Balance at September 30, 2011	$	12,747		$	32		$	308

	Nine Months Ended September 30, 2011
	Interest Rate Lock Commitments			Forward Delivery Contracts			Loans Held for Sale
Balance at January 1, 2011	$	5,986		$	3		$	884
Transfers into Level 3	—			—			732
Transfers out of Level 3	—			(215		)	—
Total net gains (losses) included in earnings (realized and unrealized)	81,847			302			(86		)
Purchases, sales, and settlements
Purchases(a)	970			(58		)	—
Sales	—			—			(1,041		)
Settlements	(8,252		)	—			(181		)
Transfers of IRLCs to closed loans	(67,804		)	—			—
Balance at September 30, 2011	$	12,747		$	32		$	308

(a) Purchased in conjunction with the acquisition of certain assets of SurePoint.

The following presents the gains (losses) included in earnings for the three and nine months ended September 30, 2012 and 2011 relating to our assets and liabilities that are measured at fair value on a recurring basis using significant unobservable inputs (Level 3) (in thousands):

	Three Months Ended September 30, 2012							Nine Months Ended September 30, 2012
	Interest Rate Lock Commitments		Forward Delivery Contracts		Loans Held for Sale			Interest Rate Lock Commitments		Forward Delivery Contracts		Loans Held for Sale
Total net gains (losses) included in earnings, which are included in discontinued operations	$	—	$	—	$	(380	)	$	73,378	$	846	$	(147	)
Change in unrealized losses relating to assets and liabilities still held at September 30, 2012, which are included in discontinued operations	$	—	$	—	$	(412	)	$	—	$	—	$	(412	)

	Three Months Ended September 30, 2011							Nine Months Ended September 30, 2011
	Interest Rate Lock Commitments		Forward Delivery Contracts		Loans Held for Sale			Interest Rate Lock Commitments		Forward Delivery Contracts		Loans Held for Sale
Total net gains (losses) included in earnings, which are included in discontinued operations	$	40,680	$	69	$	(83	)	$	81,847	$	302	$	(86	)
Change in unrealized gains (losses) relating to assets and liabilities still held at September 30, 2011, which are included in discontinued operations	$	12,747	$	32	$	—		$	12,747	$	32	$	(44	)

The following table summarizes our derivative instruments not designated as hedging instruments as of September 30, 2012 and December 31, 2011 (in thousands):

	September 30, 2012			December 31, 2011
	Balance Sheet Location	Fair Value		Balance Sheet Location	Fair Value
Interest Rate Lock Commitments	Current assets of discontinued operations	$	—	Current assets of discontinued operations	$	9,282
Forward Delivery Contracts	Current assets of discontinued operations	—		Current assets of discontinued operations	480
Interest Rate Lock Commitments	Current liabilities of discontinued operations	—		Current liabilities of discontinued operations	(160		)
Forward Delivery Contracts	Current liabilities of discontinued operations	—		Current liabilities of discontinued operations	(4,568		)
Total Derivatives		$	—		$	5,034

The gain (loss) recognized in the consolidated statements of operations for derivatives for the three and nine months ended September 30, 2012 and 2011 was as follows (in thousands):

	Location of Gain/(Loss)	Three Months Ended					Nine Months Ended
	Recognized in Income on Derivative	September 30, 2012		September 30, 2011			September 30, 2012		September 30, 2011
Interest Rate Lock Commitments	Discontinued operations	$	—	$	40,680		$	73,378	$	81,847
Forward Delivery Contracts	Discontinued operations	2,193		(3,262		)	4,244		(3,818		)
Total		$	2,193	$	37,418		$	77,622	$	78,029

Assets and liabilities under the fair value option

LendingTree Loans elected to account for loans held for sale originated on or after January 1, 2008 at fair value. Electing the fair value option allowed a better offset of the changes in fair values of the loans and the forward delivery contracts used to economically hedge them without the burden of complying with the requirements for hedge accounting.

LendingTree Loans did not elect the fair value option on loans held for sale originated prior to January 1, 2008 and on loans that were repurchased from investors on or subsequent to that date. As of September 30, 2012 and December 31, 2011, there were no loans held for sale or carried at the lower of cost or market (“LOCOM”) value assessed on an individual loan basis.

The following presents the difference between the aggregate principal balance of loans held for sale for which the fair value option has been elected and for loans measured at LOCOM as of September 30, 2012 and December 31, 2011 (in thousands):

	As of September 30, 2012
	Loans Held for Sale— Measured at Fair Value			Loans Held for Sale— Measured at LOCOM		Total Loans Held For Sale
Aggregate unpaid principal balance	$	412		$	—	$	412
Difference between fair value and aggregate unpaid principal balance	(412		)	—		(412		)
Loans held for sale	$	—		$	—	$	—

	As of December 31, 2011
	Loans Held for Sale— Measured at Fair Value		Loans Held for Sale— Measured at LOCOM		Total Loans Held For Sale
Aggregate unpaid principal balance	$	208,918	$	—	$	208,918
Difference between fair value and aggregate unpaid principal balance	8,549		—		8,549
Loans held for sale	$	217,467	$	—	$	217,467

During the nine months ended September 30, 2012 and 2011, the change in fair value of loans held for sale for which the fair value option was elected was a gain of $2.7 million and $3.7 million, respectively, and is included in discontinued operations in the accompanying consolidated statements of operations.

Loan Loss Obligations

LendingTree Loans sold loans it originated to investors on a servicing-released basis, so the risk of loss or default by the borrower was generally transferred to the investor. However, LendingTree Loans was required by these investors to make certain representations and warranties relating to credit information, loan documentation and collateral. These representations and warranties may extend through the contractual life of the loan. Subsequent to the loan sale, if underwriting deficiencies, borrower fraud or documentation defects are discovered in individual loans, LendingTree Loans may be obligated to repurchase the respective loan or indemnify the investors for any losses from borrower defaults if such deficiency or defect cannot be cured within the specified period following discovery. In the case of early loan payoffs and early defaults on certain loans, LendingTree Loans may be required to repay all or a portion of the premium initially paid by the investor.

Our HLC subsidiary continues to be liable for these indemnification obligations, repurchase obligations and premium repayment obligations following the sale of substantially all of the operating assets of our LendingTree Loans business in the second quarter of 2012. Approximately $17.1 million of the purchase price paid at closing is being held in escrow pending resolution of certain of these contingent liabilities. We have been negotiating with certain secondary market purchasers to settle any existing and future contingent liabilities, but we may not be able to complete such negotiations on acceptable terms, or at all.

The obligation for losses related to the representations and warranties and other provisions discussed above is initially recorded at its estimated fair value, which includes a projection of expected future losses as well as a market-based premium. Because LendingTree Loans does not service the loans it sold, it does not maintain nor generally have access to the current balances and loan performance data with respect to the individual loans previously sold to investors. Accordingly, LendingTree Loans is unable to determine, with precision, its maximum exposure for breaches of the representations and warranties it makes to the investors that purchase such loans.

During the third quarter of 2012, in order to reflect our exit from the mortgage loan origination business in the second quarter of 2012 and our current commercial objective to pursue bulk settlements with investors, management revised the estimation process for evaluating the adequacy of the reserve for loan losses. The revised methodology, which is described below, was effective as of September 30, 2012, and resulted in a $6.5 million reduction to the loss reserve on previously sold loans during the three months ended September 30, 2012.

Prior to the third quarter of 2012, in estimating our exposure to losses on loans previously sold, LendingTree Loans used a model that considered the original loan balance (before it was sold to an investor), historical and projected loss frequency and loss severity ratios by loan type, as well as analyses of losses in process. Subsequent adjustments to the obligation, if any, are not made based on changes in the fair value of the obligation, which might include an estimated change in losses that may be expected in the future, but are made once further losses are determined to be both probable and estimable. Further, LendingTree Loans segmented its loan sales into four segments, based on the extent of the documentation provided by the borrower to substantiate their income and/or assets (full or limited documentation) and the lien position of the mortgage in the underlying property (first or second position). Each of these segments typically has a different loss experience, with full documentation, first lien position loans generally having the lowest loss ratios, and limited documentation, second lien position loans generally having the highest loss ratios.

The revised methodology uses the model described above, but also incorporates into the estimation process (a) recent bulk settlements entered into by certain of our investors with governmental agencies and other counterparties, as applied to the attributes of the loans sold by LendingTree Loans and currently held by the investors and (b) our own recent investor bulk settlement experience. The historical model described above was weighted 50% in the revised analysis, and each of the other factors were weighted 25% to estimate the range of remaining loan losses, which was determined to be $18 million to $33 million at September 30, 2012. The reserve balance recorded as of September 30, 2012 was $26.6 million. Management has considered both objective and subjective factors in the estimation process, but given current general industry trends in mortgage loans as well as housing prices, market expectations and actual losses related to LendingTree Loans’ obligations could vary significantly from the obligation recorded as of the balance sheet date or the range estimated above.

Additionally, Tree.com has guaranteed certain loans sold to two investors in the event that LendingTree Loans is unable to satisfy its repurchase and warranty obligations related to such loans. The original principal balance of the loans sold to one of these investors is approximately $1.8 billion and $1.5 billion as of September 30, 2012 and December 31, 2011, respectively. The unpaid principal balance of the loans sold to the second investor is approximately $279.6 million and $32.4 million as of September 30, 2012 and December 31, 2011, respectively.

The following table represents the loans sold for the period shown and the aggregate loan losses through September 30, 2012:

	As of September 30, 2012
Period of Loan Sales	Number of loans sold	Original principal balance		Number of loans with losses	Original principal balance of loans with losses		Amount of aggregate losses
		(in billions)			(in millions)		(in millions)
Nine months ended September 30, 2012	9,200	$	1.9	—	$	—	$	—
2011	12,500	2.7		1	0.3		0.1
2010	12,400	2.8		4	1.1		0.1
2009	12,800	2.8		4	0.9		0.1
2008	11,000	2.2		33	6.9		2.2
2007	36,300	6.1		160	22.1		8.2
2006	55,000	7.9		207	24.5		13.4
2005 and prior years	86,700	13.0		89	12.3		5.0
Total	235,900	$	39.4	498	$	68.1	$	29.1

The pipeline of 365 requests for loan repurchases and indemnifications was considered in determining the appropriate reserve amount. The status of these loans varied from an initial review stage, which may result in a rescission of the request, to in-process, where the probability of incurring a loss is high, to indemnification, whereby LendingTree Loans has agreed to reimburse the purchaser of that loan if and when losses are incurred. The indemnification obligation may have a specific term, thereby limiting the exposure to LendingTree Loans. The original principal amount of these loans is approximately $70.9 million, comprised of approximately 70% full documentation first liens, 2% full documentation second liens, 24% limited documentation first liens and 4% limited documentation second liens.

In the fourth quarter of 2009, LendingTree Loans entered into settlement negotiations with two buyers of previously purchased limited documentation loans. The settlement with one buyer was completed in December 2009 and included a payment of $1.9 million related to all second lien loans sold to this buyer, including both full and limited documentation. The settlement was included as a charge-off to the reserve in 2009. Negotiations with the second buyer were completed in January 2010. This settlement of $4.5 million, which was paid in four equal quarterly installments in 2010, related to all then existing and future losses on limited documentation second lien loans sold to this buyer. LendingTree Loans was also required to pay an additional amount of up to $0.3 million in conjunction with this settlement, since it did not sell a certain volume of loans to this buyer in 2010. The entire $4.8 million is included in the total settlement amount and was included as a charge-off to the reserve in 2010. The $0.3 million additional liability was recorded as a separate liability from the loss reserve at December 31, 2011, and was paid in January 2012. In the second quarter of 2012, LendingTree Loans completed a settlement with a third buyer of previously purchased loans. This settlement of $3.3 million relates to all existing and substantially all future losses on loans sold to this buyer. The settlement amount was included as a charge-off to the reserve in the second quarter of 2012. The settlement amounts for all three of these settlements were not determined on an individual loan basis and are, therefore, not included in the loss amounts disclosed above for the years such loans were sold.

In December 2011, LendingTree Loans agreed to a $1.2 million settlement related to specific loans, which was included as a charge-off to the reserve in 2011 and is included in the table above. This $1.2 million settlement was recorded as a liability separate from the loss reserve at December 31, 2011, and was paid in January 2012.

Based on historical experience, it is anticipated that LendingTree Loans will continue to receive repurchase requests and incur losses on loans sold in prior years. However, the three settlements discussed above will substantially eliminate future repurchase requests from those buyers for the loan types included in those settlements.

The activity related to loss reserves on previously sold loans for the three and nine months ended September 30, 2012 and 2011, is as follows (in thousands):

	Three Months Ended September 30,						Nine Months Ended September 30,
	2012			2011			2012			2011
Balance, beginning of period	$	33,096		$	24,317		$	31,512		$	16,984
Provisions (recoveries)	(6,493		)	3,488			(109		)	11,050
Charge-offs to reserves	(14		)	(785		)	(4,814		)	(1,014		)
Balance, end of period	$	26,589		$	27,020		$	26,589		$	27,020

The liability for losses on previously sold loans is included in current liabilities of discontinued operations in the accompanying consolidated balance sheet.

Warehouse Lines of Credit

Borrowings on warehouse lines of credit were $-0- and $197.7 million at September 30, 2012 and December 31, 2011, respectively.

As a result of the closing of the sale of substantially all of the operating assets of our LendingTree Loans business on June 6, 2012, all three then-existing warehouse lines of credit expired and terminated on July 21, 2012. Borrowings under these lines of credit were used to fund, and were secured by, consumer residential loans that were held for sale. Loans under these lines of credit were repaid using proceeds from the sales of loans by LendingTree Loans.

- Definition

The entire disclosure for the facts and circumstances leading to the completed or expected disposal, manner and timing of disposal, the gain (loss) recognized in the income statement and the income statement caption that includes that gain (loss), amounts of revenues and pretax profit or loss reported in discontinued operations, the segment in which the disposal group was reported, and the classification (whether sold or classified as held for sale) and carrying value of the assets and liabilities comprising the disposal group. Includes all disposal groups, including those classified as components of the entity (discontinued operations).

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-Publisher FASB

-Name Statement of Financial Accounting Standard (FAS)

-Number 144

-Paragraph 43-48

-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

+ Details

EARNINGS PER SHARE AND STOCK-BASED COMPENSATION

9 Months Ended

Sep. 30, 2012

EARNINGS PER SHARE AND STOCK-BASED COMPENSATION

EARNINGS PER SHARE AND STOCK-BASED COMPENSATION

NOTE 7—EARNINGS PER SHARE AND STOCK-BASED COMPENSATION

The following table sets forth the computation of Basic and Diluted earnings per share:

	Three Months Ended September 30,
	2012				2011
	Basic		Diluted		Basic			Diluted
	(In thousands, except per share data)
Numerator:
Income (loss) from continuing operations	$	270	$	270	$	(3,406	)	$	(3,406	)
Income from discontinued operations, net of tax	4,112		4,112		16,721			16,721
Net income attributable to common shareholders	$	4,382	$	4,382	$	13,315		$	13,315
Denominator:
Weighted average common shares	11,389		12,003		11,037			11,037
Income (loss) per share:
Income (loss) from continuing operations	$	0.02	$	0.02	$	(0.31	)	$	(0.31	)
Income from discontinued operations, net of tax	0.36		0.35		1.52			1.52
Net income per common share	$	0.38	$	0.37	$	1.21		$	1.21

	Nine Months Ended September 30,
	2012						2011
	Basic			Diluted			Basic			Diluted
	(In thousands, except per share data)
Numerator:
Loss from continuing operations	$	(4,752	)	$	(4,752	)	(44,608		)	(44,608		)
Income (loss) from discontinued operations, net of tax	49,058			49,058			(16,077		)	(16,077		)
Net income (loss) available to common shareholders	$	44,306		$	44,306		$	(60,685	)	$	(60,685	)
Denominator:
Weighted average common shares	11,293			11,293			10,978			10,978
Income (loss) per share:
Loss from continuing operations	$	(0.42	)	$	(0.42	)	$	(4.06	)	$	(4.06	)
Income (loss) from discontinued operations, net of tax	4.34			4.34			(1.47		)	(1.47		)
Net income (loss) per common share	$	3.92		$	3.92		$	(5.53	)	$	(5.53	)

The sum of the first, second, and third quarters of 2012 diluted earnings per share from discontinued operations does not equal the year-to-date total due to a revision of approximately $0.03 per share to the first quarter amount. The impact of this correction is considered immaterial to the previously reported financial statements.

For the nine months ended September 30, 2012 and the three and nine months ended September 30, 2011, we had losses from continuing operations and, as a result, no potentially dilutive securities were included in the denominator for computing diluted earnings per share because the impact would have been anti-dilutive. Accordingly, the weighted average basic shares outstanding were used to compute earnings per share amounts for these periods. For the three and nine months ended September 30, 2012, approximately 0.3 million and 2.1 million shares, respectively, related to potentially dilutive securities were excluded from the calculation of diluted earnings per share because their inclusion would have been anti-dilutive. For the three and nine months ended September 30, 2011, approximately 1.9 million shares related to potentially dilutive securities were excluded from the calculation of diluted earnings per share because their inclusion would have been anti-dilutive.

Non-cash compensation expense related to equity awards is included in the following line items in the accompanying consolidated statements of operations for the three and nine months ended September 30, 2012 and 2011 (in thousands):

	Three Months Ended September 30,					Nine Months Ended September 30,
	2012		2011			2012		2011
Cost of revenue	$	2	$	(1	)	$	6	$	3
Selling and marketing expense	145		50			504		314
General and administrative expense	1,026		712			2,662		2,196
Product development	136		63			393		218
Non-cash compensation expense	$	1,309	$	824		$	3,565	$	2,731

The forms of stock-based awards granted to our employees are principally restricted stock units (“RSUs”), restricted stock and stock options. RSUs are awards in the form of units, denominated in a hypothetical equivalent number of shares of our common stock and with the value of each award equal to the fair value of our common stock at the date of grant. RSUs may be settled in cash, stock or both, as determined by the compensation committee of our board of directors at the time of grant. Each stock-based award is subject to service-based vesting, where a specific period of continued employment must pass before an award vests. Certain restricted stock awards also include performance-based vesting, where certain performance targets set at the time of grant must be achieved before an award vests. We recognize expense for all stock-based awards for which vesting is considered probable. For stock-based awards, the accounting charge is measured at the grant date as the fair value of the shares of our common stock subject to the award and expensed ratably as non-cash compensation over the vesting term. For performance-based awards, the expense is measured at the grant date as the fair value of the shares of our common stock subject to the award and expensed as non-cash compensation over the vesting period if the performance targets are considered probable of being achieved.

The amount of stock-based compensation expense recognized in the consolidated statement of operations is reduced by estimated forfeitures, as the amount recorded is based on awards ultimately expected to vest. The forfeiture rate is estimated at the grant date based on historical experience and revised, if necessary, in subsequent periods if the actual forfeiture rate differs from the estimated rate.

A summary of changes in outstanding stock options for the nine months ended September 30, 2012 is as follows:

	Shares		Weighted Average Exercise Price		Weighted Average Remaining Contractual Term	Aggregate Intrinsic Value
					(In years)	(In thousands)
Outstanding at January 1, 2012	1,046,746		$	9.09
Granted	150,000		7.43
Exercised	(79,660	)	7.49
Forfeited	—		—
Expired	(26,635	)	10.33
Outstanding at September 30, 2012	1,090,451		$	8.95	5.9	$	3,422
Options exercisable at September 30, 2012	248,021		$	12.26	4.2	$	513

The following table summarizes the information about stock options outstanding and exercisable as of September 30, 2012:

	Options Outstanding				Options Exercisable
Range of Exercise Prices	Outstanding at September 30, 2012	Weighted Average Remaining Contractual Life in Years	Weighted Average Exercise Price		Exercisable at September 30, 2012	Weighted Average Exercise Price
$.01 to $4.99	4,363	1.0	$	3.22	4,363	$	3.22
$5.00 to $7.45	306,821	8.9	6.65		54,241	5.92
$7.46 to $9.99	635,597	5.3	8.42		45,747	7.63
$10.00 to $14.99	16,117	2.0	12.37		16,117	12.37
$15.00 to $19.99	80,890	2.7	15.02		80,890	15.02
$20.00 to $24.99	46,663	2.7	20.19		46,663	20.19
	1,090,451	5.9	$	8.95	248,021	$	12.26

Included in the table above, on March 1, 2012 our Chairman and CEO was granted an option to purchase up to 150,000 shares of our common stock that vests in three equal installments beginning on March 1, 2013. The weighted average exercise price and the weighted average fair value related to this stock option were $7.43 and $3.63, respectively.

Nonvested RSUs and restricted stock outstanding as of September 30, 2012 and changes during the nine months ended September 30, 2012 were as follows:

	RSUs				Restricted Stock
	Number of Shares		Weighted Average Grant Date Fair Value		Number of Shares		Weighted Average Grant Date Fair Value
Nonvested at January 1, 2012	933,051		$	6.48	299,642		$	6.70
Granted	343,218		11.09		—		—
Vested	(318,429	)	7.19		(112,142	)	5.45
Forfeited	(104,495	)	6.68		—		—
Nonvested at September 30, 2012	853,345		$	8.09	187,500		$	7.44

INCOME TAXES

9 Months Ended

Sep. 30, 2012

INCOME TAXES

INCOME TAXES

NOTE 8—INCOME TAXES

For the three months ended September 30, 2012 and 2011, we recorded a tax (provision) benefit of $(0.2) million and $0.5 million, respectively, which represents effective tax rates of 41.1% and 12.0%, respectively. For the nine months ended September 30, 2012 and 2011, we recorded a tax benefit of $3.1 million and $12.1 million, respectively, which represents effective tax rates of 39.4% and 21.3%, respectively. For the three and nine months ended September 30, 2012, our tax rate is higher than the federal statutory rate of 35% primarily due to the impact of state income taxes. For the three months ended September 30, 2011, our tax rate was lower than the federal statutory rate of 35% due to a change in the valuation allowance on deferred tax assets. For the nine months ended September 30, 2011, our tax rate was lower than the federal statutory rate of 35% due to a change in the valuation allowance on deferred tax assets, partially offset by the tax impact of an impairment charge related to an intangible asset.

For the three and nine months ended September 30, 2012 and 2011, we used the standard method of calculating a projected annual tax rate to determine the current period’s tax provision. We are recognizing the tax effect of discontinued operations discretely in the respective interim periods and in accordance with the intra-period accounting rules. An offsetting tax benefit is recorded in continuing operations in the interim period.

- Definition

The entire disclosure for income taxes. Disclosures may include net deferred tax liability or asset recognized in an enterprise's statement of financial position, net change during the year in the total valuation allowance, approximate tax effect of each type of temporary difference and carryforward that gives rise to a significant portion of deferred tax liabilities and deferred tax assets, utilization of a tax carryback, and tax uncertainties information.

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+ Details

CONTINGENCIES

9 Months Ended

Sep. 30, 2012

CONTINGENCIES

CONTINGENCIES

NOTE 9—CONTINGENCIES

During the nine months ended September 30, 2012 and 2011, provisions for litigation settlements and contingencies of $0.9 million and $5.2 million, respectively, were recorded in litigation settlements and contingencies in the accompanying consolidated statements of operations. The balance of the related liability was $0.5 million and $3.1 million at September 30, 2012 and December 31, 2011, respectively. The litigation matters were either settled, or we extended a firm offer for settlement, thereby establishing an accrual amount that is both probable and reasonably estimable.

The Massachusetts Division of Banks (the “Division”) delivered to LendingTree, LLC on February 11, 2011 a Report of Examination/Inspection which identified various alleged violations of Massachusetts and federal laws, including the alleged insufficient delivery by LendingTree, LLC of various disclosures to its customers. On October 14, 2011, the Division provided a proposed Consent Agreement and Order to settle the Division’s allegations, which the Division had shared with other state mortgage lending regulators. Twenty-four of such state mortgage lending regulators (the “Joining Regulators”) indicated that if LendingTree, LLC would enter into the Consent Agreement and Order, they would agree not to pursue any analogous allegations that they otherwise might assert. As of the date of this report, none of the Joining Regulators have asserted any such allegations.

The proposed Consent Agreement and Order calls for a fine to be allocated among the Division and the Joining Regulators and for LendingTree, LLC to adopt various new procedures and practices. We have commenced negotiations toward an acceptable Consent Agreement and Order. We do not believe our lending Exchanges violates any federal or state mortgage lending laws; nor do we believe that any past operations of the lending Exchanges have resulted in a material violation of any such laws. Should the Division or any Joining Regulator bring any actions relating to the matters alleged in the February 2011 Report of Examination/Inspection, we intend to defend against such actions vigorously. The range of possible loss is estimated to be between $0.5 million and $7.1 million, and a reserve of $0.5 million has been established for this matter as of September 30, 2012 and December 31, 2011.

In the ordinary course of business, we are party to various lawsuits. We establish reserves for specific legal matters when we determine that the likelihood of an unfavorable outcome is probable and the loss is reasonably estimable. Management has also identified certain other legal matters where it believes an unfavorable outcome is not probable and, therefore, no reserve is established. We also evaluate other contingent matters, including tax contingencies, to assess the probability and estimated extent of potential loss.

SUBSEQUENT EVENTS

9 Months Ended

Sep. 30, 2012

SUBSEQUENT EVENTS

SUBSEQUENT EVENTS

NOTE 10—SUBSEQUENT EVENT

On August 20, 2008, in connection with the spin-off of Tree.com, Inc. by IAC/InterActiveCorp, our Chairman and CEO received restricted shares of Series A Redeemable Preferred Stock of a wholly-owned subsidiary of Tree.com, Inc. The shares of preferred stock had an aggregate liquidation preference of $5,000,000 and vested in three equal annual installments on the first three anniversaries of the spin-off.

The preferred stock provides for cumulative dividends at a rate of 12% per annum, and unpaid dividends compound quarterly at a rate of 12% per annum. The wholly-owned subsidiary is required to redeem all outstanding preferred stock on the fifth anniversary of the grant date, which is August 20, 2013. The redemption price is the liquidation preference of the outstanding shares plus compounded accrued and unpaid dividends.

On August 30, 2010, we entered into a share exchange agreement with our Chairman and CEO pursuant to which he exchanged 2,902.33 shares of preferred stock and most of the accrued and unpaid dividends in respect of such shares for a total of 534,900 newly-issued shares of Tree.com common stock. Immediately following such transaction, he held 2,097.67 shares of preferred stock.

On November 7, 2012, our audit committee, compensation committee and board of directors approved an early redemption of the remaining 2,097.67 outstanding shares of preferred stock owned by our Chairman and CEO, including all accrued dividends, for $3.3 million in cash. The redemption will close on November 30, 2012. The redemption value of the preferred stock was determined in part based on a third-party valuation of the discounted remaining dividend stream through the mandatory redemption date of August 20, 2013.

SIGNIFICANT ACCOUNTING POLICIES (Policies)

9 Months Ended

Sep. 30, 2012

SIGNIFICANT ACCOUNTING POLICIES

Accounting Estimates

Accounting Estimates

Concentrations

Concentrations

Cash and Cash Equivalents

Cash and Cash Equivalents

Cash and cash equivalents include cash and short-term, highly liquid money market investments with original maturities of three months or less.

Restricted Cash

Restricted Cash

Restricted cash and cash equivalents consists of the following (in thousands):

	September 30, 2012		December 31, 2011
Cash in escrow for loan loss obligations	$	20,127	$	—
Cash in escrow for surety bonds	6,501		6,500
Cash in escrow for corporate purchasing card program	800		800
Minimum required balances for warehouse lines of credit	—		4,250
Other	1,997		901
Total restricted cash and cash equivalents	$	29,425	$	12,451

Revenue Recognition

Revenue Recognition

Recent Accounting Pronouncements

Recent Accounting Pronouncements

- Definition

Disclosure of accounting policy for cash and cash equivalents, including the policy for determining which items are treated as cash equivalents. Other information that may be disclosed includes (1) the nature of any restrictions on the entity's use of its cash and cash equivalents, (2) whether the entity's cash and cash equivalents are insured or expose the entity to credit risk, (3) the classification of any negative balance accounts (overdrafts), and (4) the carrying basis of cash equivalents (for example, at cost) and whether the carrying amount of cash equivalents approximates fair value.

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- Definition

Entity's cash and cash equivalents accounting policy with respect to restricted balances. Restrictions may include legally restricted deposits held as compensating balances against short-term borrowing arrangements, contracts entered into with others, or company statements of intention with regard to particular deposits; however, time deposits and short-term certificates of deposit are not generally included in legally restricted deposits.

+ References+ Details

- Definition

Disclosure of accounting policy for credit risk.

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+ Details

- Definition

Disclosure of accounting policy for revenue recognition. If the entity has different policies for different types of revenue transactions, the policy for each material type of transaction is generally disclosed. If a sales transaction has multiple element arrangements (for example, delivery of multiple products, services or the rights to use assets) the disclosure may indicate the accounting policy for each unit of accounting as well as how units of accounting are determined and valued. The disclosure may encompass important judgment as to appropriateness of principles related to recognition of revenue. The disclosure also may indicate the entity's treatment of any unearned or deferred revenue that arises from the transaction.

+ References+ Details

- Definition

Disclosure of accounting policy for the use of estimates in the preparation of financial statements in conformity with generally accepted accounting principles.

+ References+ Details

ORGANIZATION (Tables)

9 Months Ended

Sep. 30, 2012

ORGANIZATION

Schedule of unaudited pro forma financial information as if the sale of substantially all of the operating assets had occurred as of January 1, 2011

	Nine Months Ended September 30, 2012			Nine Months Ended September 30, 2011
Revenue	$	53,501		$	43,951
Net loss from continuing operations	(4,752		)	(44,608		)
Net loss attributable to common shareholders	(4,752		)	(44,608		)
Basic earnings per share attributable to common shareholders	(0.42		)	(4.06		)
Diluted earnings per share attributable to common shareholders	(0.42		)	(4.06		)

Schedule of restated condensed consolidated statement of operations

The restated condensed consolidated statement of operations for the three months ended September 30, 2011 is as follows:

	As Previously Presented			Impairment Correction		As Restated
Income tax benefit	$	185		$	279	$	464
Net loss from continuing operations	(3,685		)	279		(3,406		)
Income from operations of discontinued operations, net of tax	8,531			438		8,969
Income from discontinued operations	16,283			438		16,721
Net income attributable to common shareholders	12,598			717		13,315
Basic and diluted net loss per share from continuing operations	(0.33		)	0.02		(0.31		)
Basic and diluted net income per share from discontinued operations	1.47			0.05		1.52
Basic and diluted net income per share attributable to common shareholders	1.14			0.07		1.21

The restated condensed consolidated statement of operations for the nine months ended September 30, 2011 is as follows:

	As Previously Presented			Impairment Correction			As Restated
Asset impairments	$	250		$	29,000		$	29,250
Total costs and expenses	71,421			29,000			100,421
Operating loss	(27,470		)	(29,000		)	(56,470		)
Loss before income taxes	(27,736		)	(29,000		)	(56,736		)
Income tax benefit (provision)	(117		)	12,245			12,128
Net loss from continuing operations	(27,853		)	(16,755		)	(44,608		)
Loss from operations of discontinued operations, net of tax	(24,615		)	786			(23,829		)
Loss from discontinued operations	(16,863		)	786			(16,077		)
Net loss attributable to common shareholders	(44,716		)	(15,969		)	(60,685		)
Basic and diluted net loss per share from continuing operations	(2.54		)	(1.52		)	(4.06		)
Basic and diluted net loss per share from discontinued operations	(1.53		)	0.06			(1.47		)
Basic and diluted net loss per share from attributable to common shareholders	(4.07		)	(1.46		)	(5.53		)

Schedule of restated cash flows from operating activities section of the condensed consolidated statement of cash flows

	As Previously Presented			Impairment Correction			As Restated
Cash Flows from Operating Activities:
Net loss	$	(44,716	)	$	(15,969	)	$	(60,685	)
Less loss from discontinued operations, net of tax	16,863			(786		)	16,077
Net loss from continuing operations	(27,853		)	(16,755		)	(44,608		)
Intangible impairment	250			29,000			29,250
Deferred income taxes	101			(12,245		)	(12,144		)

- Definition

Tabular disclosure of pro forma results of operations for a material business acquisition or series of individually immaterial business acquisitions that are material in the aggregate.

+ References+ Details

SIGNIFICANT ACCOUNTING POLICIES (Tables)

9 Months Ended

Sep. 30, 2012

SIGNIFICANT ACCOUNTING POLICIES

Schedule of restricted cash and cash equivalents

Restricted cash and cash equivalents consists of the following (in thousands):

	September 30, 2012		December 31, 2011
Cash in escrow for loan loss obligations	$	20,127	$	—
Cash in escrow for surety bonds	6,501		6,500
Cash in escrow for corporate purchasing card program	800		800
Minimum required balances for warehouse lines of credit	—		4,250
Other	1,997		901
Total restricted cash and cash equivalents	$	29,425	$	12,451

- Definition

Tabular disclosure of the cash and cash items which are restricted as to withdrawal or usage. The provisions of any restrictions are described in a note to the financial statements. Restrictions may include legally restricted deposits held as compensating balances against short-term borrowing arrangements, contracts entered into with others, or entity statements of intention with regard to particular deposits; however, time deposits and short-term certificates of deposit are not generally included in legally restricted deposits.

+ References+ Details

GOODWILL AND INTANGIBLE ASSETS (Tables)

9 Months Ended

Sep. 30, 2012

GOODWILL AND INTANGIBLE ASSETS

Schedule of balance of goodwill and intangible assets, net

The balance of goodwill and intangible assets, net is as follows (in thousands):

	September 30, 2012		December 31, 2011
Goodwill	$	3,632	$	3,632
Intangible assets with indefinite lives	$	10,142	$	10,142
Intangible assets with definite lives, net	732		1,047
Total intangible assets, net	$	10,874	$	11,189

Schedule of intangible assets with definite lives

At September 30, 2012, intangible assets with definite lives relate to the following (in thousands):

	Cost		Accumulated Amortization			Net		Weighted Average Amortization Life (Years)
Purchase agreements	$	50,411	$	(50,329	)	$	82	5.0
Technology	25,194		(25,142		)	52		3.0
Customer lists	6,682		(6,090		)	592		4.2
Other	1,516		(1,510		)	6		2.5
Total	$	83,803	$	(83,071	)	$	732

At December 31, 2011, intangible assets with definite lives relate to the following (in thousands):

	Cost		Accumulated Amortization			Net		Weighted Average Amortization Life (Years)
Purchase agreements	$	50,411	$	(50,293	)	$	118	5.0
Technology	25,194		(25,034		)	160		3.0
Customer lists	6,682		(6,045		)	637		4.2
Other	1,516		(1,384		)	132		2.5
Total	$	83,803	$	(82,756	)	$	1,047

Schedule of amortization of intangible assets with definite lives for the next five years

	Amount
Three months ending December 31, 2012	$	43
Year ending December 31, 2013	147
Year ending December 31, 2014	86
Year ending December 31, 2015	60
Year ending December 31, 2016	60
Thereafter	336
Total	$	732

PROPERTY AND EQUIPMENT (Tables)

9 Months Ended

Sep. 30, 2012

PROPERTY AND EQUIPMENT

Schedule of balance of property and equipment, net

The balance of property and equipment, net is as follows (in thousands):

	September 30, 2012			December 31, 2011
Computer equipment and capitalized software	$	26,571		$	24,940
Leasehold improvements	2,055			2,042
Furniture and other equipment	1,488			1,450
Projects in progress	612			826
	30,726			29,258
Less: accumulated depreciation and amortization	(23,802		)	(20,883		)
Total property and equipment, net	$	6,924		$	8,375

- Definition

Tabular disclosure of the useful life and salvage value of long-lived, physical assets that are used in the normal conduct of business to produce goods and services and not intended for resale. Examples include land, buildings, machinery and equipment, and other types of furniture and equipment including, but not limited to, office equipment, furniture and fixtures, and computer equipment and software.

+ References+ Details

ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES (Tables)

9 Months Ended

Sep. 30, 2012

ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES

Schedule of accrued expenses and other current liabilities

Accrued expenses and other current liabilities consist of the following (in thousands):

	September 30, 2012		December 31, 2011
Litigation accruals	$	500	$	3,077
Accrued advertising expense	5,044		2,659
Accrued compensation and benefits	4,776		624
Accrued professional fees	1,019		635
Accrued restructuring costs	341		439
Customer deposits and escrows	1,941		2,211
Deferred rent	212		186
Other	3,534		6,881
Total accrued expenses and other current liabilities	$	17,367	$	16,712

DISCONTINUED OPERATIONS (Tables)

9 Months Ended

Sep. 30, 2012

RealEstate.com

DISCONTINUED OPERATIONS

Schedule of revenue and net income (loss) of the discontinued operations

The revenue and net loss for the Real Estate businesses that are reported as discontinued operations for the applicable periods were as follows (in thousands):

	Three Months Ended September 30,
	2012			2011
Revenue	$	2		$	515
Loss before income taxes	$	(282	)	$	(637	)
Income tax provision	—			—
Gain from sale of discontinued operations	—			7,752
Net income (loss)	$	(282	)	$	7,115

	Nine Months Ended September 30,
	2012			2011
Revenue	$	77		$	3,633
Loss before income taxes	$	(442	)	$	(16,936	)
Income tax provision	—			—
Gain from sale of discontinued operations	—			7,752
Net loss	$	(442	)	$	(9,184	)

Schedule of assets and liabilities of the discontinued operations

The assets and liabilities of Real Estate that are reported as discontinued operations as of September 30, 2012 and December 31, 2011 were as follows (in thousands):

	September 30, 2012			December 31, 2011
Current assets	$	—		$	33
Current liabilities	390			702
Non-current liabilities	—			54
Net liabilities	$	(390	)	$	(723	)

LendingTree Loans

DISCONTINUED OPERATIONS

Schedule of revenue and net income (loss) of the discontinued operations

The revenue and net income (loss) for LendingTree Loans that are reported as discontinued operations for the applicable periods were as follows (in thousands):

	Three Months Ended September 30,
	2012			2011
Revenue	$	5,943		$	37,094
Income before income taxes	$	4,470		$	9,606
Income tax provision	(76		)	—
Net income	$	4,394		$	9,606

	Nine Months Ended September 30,
	2012			2011
Revenue	$	87,338		$	81,726
Income (loss) before income taxes	$	27,660		$	(6,893	)
Income tax provision	(2,473		)	—
Gain from sale of discontinued operations, net of tax of $1,267 and $-0-	24,313			—
Net income (loss)	$	49,500		$	(6,893	)

Schedule of assets and liabilities of the discontinued operations

The assets and liabilities of LendingTree Loans that are reported as discontinued operations as of September 30, 2012 and December 31, 2011 were as follows (in thousands):

	September 30, 2012			December 31, 2011
Loans held for sale	$	—		$	217,467
Other current assets	479			14,925
Current assets	479			232,392
Property and equipment	—			4,181
Goodwill	—			5,579
Other non-current assets	236			1,187
Non-current assets	236			10,947
Warehouse lines of credit	—			197,659
Other current liabilities	31,394			56,383
Current liabilities	31,394			254,042
Non-current liabilities	331			978
Net liabilities	$	(31,010	)	$	(11,681	)

Schedule of loans held for sale by type of loan

The following table represents the loans held for sale by type of loan as of September 30, 2012 and December 31, 2011 ($ amounts in thousands):

	September 30, 2012				December 31, 2011
	Amount		%		Amount		%
Conforming	$	—	—	%	$	171,375	79	%
FHA	—		—	%	40,433		18	%
Jumbo	—		—	%	5,659		3	%
Total	$	—	—	%	$	217,467	100	%

Schedule of difference between the aggregate principal balance of loans on nonaccrual status for which the fair value option has been elected and for loans measured at lower of cost or market valuation

	As of September 30, 2012
	Loans on Nonaccrual— Measured at Fair Value			Loans on Nonaccrual— Measured at LOCOM		Total Loans on Nonaccrual
Aggregate unpaid principal balance	$	412		$	—	$	412
Difference between fair value and aggregate unpaid principal balance	(412		)	—		(412		)
Loans on nonaccrual	$	—		$	—	$	—

	As of December 31, 2011
	Loans on Nonaccrual— Measured at Fair Value			Loans on Nonaccrual— Measured at LOCOM		Total Loans on Nonaccrual
Aggregate unpaid principal balance	$	539		$	—	$	539
Difference between fair value and aggregate unpaid principal balance	(244		)	—		(244		)
Loans on nonaccrual	$	295		$	—	$	295

Schedule of assets and liabilities that are measured at fair value on a recurring basis

The following presents our assets and liabilities that are measured at fair value on a recurring basis at September 30, 2012 and December 31, 2011 (in thousands):

As of September 30, 2012

Recurring Fair Value Measurements Using

Quoted Market
Prices in Active
Markets for
Identical
Assets
(Level 1)

Significant
Other
Observable
Inputs
(Level 2)

Significant
Unobservable
Inputs
(Level 3)

Total
Fair Value
Measurements

Loans held for sale

—

Forward delivery contracts

—

Total

—

	As of December 31, 2011
	Recurring Fair Value Measurements Using
	Quoted Market Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)			Significant Unobservable Inputs (Level 3)		Total Fair Value Measurements
Loans held for sale	$	—	$	217,172		$	295	$	217,467
Interest rate lock commitments (“IRLCs”)	—		—			9,122		9,122
Forward delivery contracts	—		(4,107		)	19		(4,088		)
Total	$	—	$	213,065		$	9,436	$	222,501

Schedule of changes in assets and liabilities that are measured at fair value on a recurring basis using significant unobservable inputs (Level 3)

	Three Months Ended September 30, 2012
	Interest Rate Lock Commitments		Forward Delivery Contracts		Loans Held for Sale
Balance at July 1, 2012	$	—	$	—	$	167
Transfers into Level 3	—		—		124
Transfers out of Level 3	—		—		—
Total net gains (losses) included in earnings (realized and unrealized)	—		—		(380		)
Purchases, sales, and settlements
Purchases	—		—		—
Sales	—		—		90
Settlements	—		—		(1		)
Transfers of IRLCs to closed loans	—		—		—
Balance at September 30, 2012	$	—	$	—	$	—

	Nine Months Ended September 30, 2012
	Interest Rate Lock Commitments			Forward Delivery Contracts			Loans Held for Sale
Balance at January 1, 2012	$	9,122		$	19		$	295
Transfers into Level 3	—			—			564
Transfers out of Level 3	—			(845		)	—
Total net gains (losses) included in earnings (realized and unrealized)	73,378			846			(147		)
Purchases, sales, and settlements
Purchases	—			—			—
Sales	(5,640		)	(20		)	(491		)
Settlements	(3,401		)	—			(221		)
Transfers of IRLCs to closed loans	(73,459		)	—			—
Balance at September 30, 2012	$	—		$	—		$	—

	Three Months Ended September 30, 2011
	Interest Rate Lock Commitments			Forward Delivery Contracts			Loans Held for Sale
Balance at July 1, 2011	$	6,278		$	220		$	861
Transfers into Level 3	—			—			72
Transfers out of Level 3	—			(257		)	—
Total net gains (losses) included in earnings (realized and unrealized)	40,680			69			(83		)
Purchases, sales, and settlements
Purchases	—			—			—
Sales	—			—			(538		)
Settlements	(2,255		)	—			(4		)
Transfers of IRLCs to closed loans	(31,956		)	—			—
Balance at September 30, 2011	$	12,747		$	32		$	308

	Nine Months Ended September 30, 2011
	Interest Rate Lock Commitments			Forward Delivery Contracts			Loans Held for Sale
Balance at January 1, 2011	$	5,986		$	3		$	884
Transfers into Level 3	—			—			732
Transfers out of Level 3	—			(215		)	—
Total net gains (losses) included in earnings (realized and unrealized)	81,847			302			(86		)
Purchases, sales, and settlements
Purchases(a)	970			(58		)	—
Sales	—			—			(1,041		)
Settlements	(8,252		)	—			(181		)
Transfers of IRLCs to closed loans	(67,804		)	—			—
Balance at September 30, 2011	$	12,747		$	32		$	308

(a) Purchased in conjunction with the acquisition of certain assets of SurePoint.

Schedule of gains (losses) included in earnings relating to assets and liabilities that are measured at fair value on a recurring basis using significant unobservable inputs (Level 3)

	Three Months Ended September 30, 2012							Nine Months Ended September 30, 2012
	Interest Rate Lock Commitments		Forward Delivery Contracts		Loans Held for Sale			Interest Rate Lock Commitments		Forward Delivery Contracts		Loans Held for Sale
Total net gains (losses) included in earnings, which are included in discontinued operations	$	—	$	—	$	(380	)	$	73,378	$	846	$	(147	)
Change in unrealized losses relating to assets and liabilities still held at September 30, 2012, which are included in discontinued operations	$	—	$	—	$	(412	)	$	—	$	—	$	(412	)

	Three Months Ended September 30, 2011							Nine Months Ended September 30, 2011
	Interest Rate Lock Commitments		Forward Delivery Contracts		Loans Held for Sale			Interest Rate Lock Commitments		Forward Delivery Contracts		Loans Held for Sale
Total net gains (losses) included in earnings, which are included in discontinued operations	$	40,680	$	69	$	(83	)	$	81,847	$	302	$	(86	)
Change in unrealized gains (losses) relating to assets and liabilities still held at September 30, 2011, which are included in discontinued operations	$	12,747	$	32	$	—		$	12,747	$	32	$	(44	)

Summary of derivative instruments not designated as hedging instruments

The following table summarizes our derivative instruments not designated as hedging instruments as of September 30, 2012 and December 31, 2011 (in thousands):

	September 30, 2012			December 31, 2011
	Balance Sheet Location	Fair Value		Balance Sheet Location	Fair Value
Interest Rate Lock Commitments	Current assets of discontinued operations	$	—	Current assets of discontinued operations	$	9,282
Forward Delivery Contracts	Current assets of discontinued operations	—		Current assets of discontinued operations	480
Interest Rate Lock Commitments	Current liabilities of discontinued operations	—		Current liabilities of discontinued operations	(160		)
Forward Delivery Contracts	Current liabilities of discontinued operations	—		Current liabilities of discontinued operations	(4,568		)
Total Derivatives		$	—		$	5,034

Schedule of gain/(loss) recognized in the consolidated statements of operations for derivatives

The gain (loss) recognized in the consolidated statements of operations for derivatives for the three and nine months ended September 30, 2012 and 2011 was as follows (in thousands):

	Location of Gain/(Loss)	Three Months Ended					Nine Months Ended
	Recognized in Income on Derivative	September 30, 2012		September 30, 2011			September 30, 2012		September 30, 2011
Interest Rate Lock Commitments	Discontinued operations	$	—	$	40,680		$	73,378	$	81,847
Forward Delivery Contracts	Discontinued operations	2,193		(3,262		)	4,244		(3,818		)
Total		$	2,193	$	37,418		$	77,622	$	78,029

Schedule of difference between the aggregate principal balance of loans held for sale for which the fair value option has been elected and for loans measured at LOCOM

	As of September 30, 2012
	Loans Held for Sale— Measured at Fair Value			Loans Held for Sale— Measured at LOCOM		Total Loans Held For Sale
Aggregate unpaid principal balance	$	412		$	—	$	412
Difference between fair value and aggregate unpaid principal balance	(412		)	—		(412		)
Loans held for sale	$	—		$	—	$	—

	As of December 31, 2011
	Loans Held for Sale— Measured at Fair Value		Loans Held for Sale— Measured at LOCOM		Total Loans Held For Sale
Aggregate unpaid principal balance	$	208,918	$	—	$	208,918
Difference between fair value and aggregate unpaid principal balance	8,549		—		8,549
Loans held for sale	$	217,467	$	—	$	217,467

Schedule of loans sold for the period and the aggregate loan losses

	As of September 30, 2012
Period of Loan Sales	Number of loans sold	Original principal balance		Number of loans with losses	Original principal balance of loans with losses		Amount of aggregate losses
		(in billions)			(in millions)		(in millions)
Nine months ended September 30, 2012	9,200	$	1.9	—	$	—	$	—
2011	12,500	2.7		1	0.3		0.1
2010	12,400	2.8		4	1.1		0.1
2009	12,800	2.8		4	0.9		0.1
2008	11,000	2.2		33	6.9		2.2
2007	36,300	6.1		160	22.1		8.2
2006	55,000	7.9		207	24.5		13.4
2005 and prior years	86,700	13.0		89	12.3		5.0
Total	235,900	$	39.4	498	$	68.1	$	29.1

Schedule of activity related to loss reserves on previously sold loans

The activity related to loss reserves on previously sold loans for the three and nine months ended September 30, 2012 and 2011, is as follows (in thousands):

	Three Months Ended September 30,						Nine Months Ended September 30,
	2012			2011			2012			2011
Balance, beginning of period	$	33,096		$	24,317		$	31,512		$	16,984
Provisions (recoveries)	(6,493		)	3,488			(109		)	11,050
Charge-offs to reserves	(14		)	(785		)	(4,814		)	(1,014		)
Balance, end of period	$	26,589		$	27,020		$	26,589		$	27,020

EARNINGS PER SHARE AND STOCK-BASED COMPENSATION (Tables)

9 Months Ended

Sep. 30, 2012

EARNINGS PER SHARE AND STOCK-BASED COMPENSATION

Schedule of computation of Basic and Diluted earnings per share

	Three Months Ended September 30,
	2012				2011
	Basic		Diluted		Basic			Diluted
	(In thousands, except per share data)
Numerator:
Income (loss) from continuing operations	$	270	$	270	$	(3,406	)	$	(3,406	)
Income from discontinued operations, net of tax	4,112		4,112		16,721			16,721
Net income attributable to common shareholders	$	4,382	$	4,382	$	13,315		$	13,315
Denominator:
Weighted average common shares	11,389		12,003		11,037			11,037
Income (loss) per share:
Income (loss) from continuing operations	$	0.02	$	0.02	$	(0.31	)	$	(0.31	)
Income from discontinued operations, net of tax	0.36		0.35		1.52			1.52
Net income per common share	$	0.38	$	0.37	$	1.21		$	1.21

	Nine Months Ended September 30,
	2012						2011
	Basic			Diluted			Basic			Diluted
	(In thousands, except per share data)
Numerator:
Loss from continuing operations	$	(4,752	)	$	(4,752	)	(44,608		)	(44,608		)
Income (loss) from discontinued operations, net of tax	49,058			49,058			(16,077		)	(16,077		)
Net income (loss) available to common shareholders	$	44,306		$	44,306		$	(60,685	)	$	(60,685	)
Denominator:
Weighted average common shares	11,293			11,293			10,978			10,978
Income (loss) per share:
Loss from continuing operations	$	(0.42	)	$	(0.42	)	$	(4.06	)	$	(4.06	)
Income (loss) from discontinued operations, net of tax	4.34			4.34			(1.47		)	(1.47		)
Net income (loss) per common share	$	3.92		$	3.92		$	(5.53	)	$	(5.53	)

Schedule of non-cash compensation expense related to equity awards

	Three Months Ended September 30,					Nine Months Ended September 30,
	2012		2011			2012		2011
Cost of revenue	$	2	$	(1	)	$	6	$	3
Selling and marketing expense	145		50			504		314
General and administrative expense	1,026		712			2,662		2,196
Product development	136		63			393		218
Non-cash compensation expense	$	1,309	$	824		$	3,565	$	2,731

Summary of changes in outstanding stock options

	Shares		Weighted Average Exercise Price		Weighted Average Remaining Contractual Term	Aggregate Intrinsic Value
					(In years)	(In thousands)
Outstanding at January 1, 2012	1,046,746		$	9.09
Granted	150,000		7.43
Exercised	(79,660	)	7.49
Forfeited	—		—
Expired	(26,635	)	10.33
Outstanding at September 30, 2012	1,090,451		$	8.95	5.9	$	3,422
Options exercisable at September 30, 2012	248,021		$	12.26	4.2	$	513

Summary of the information about stock options outstanding and exercisable

The following table summarizes the information about stock options outstanding and exercisable as of September 30, 2012:

	Options Outstanding				Options Exercisable
Range of Exercise Prices	Outstanding at September 30, 2012	Weighted Average Remaining Contractual Life in Years	Weighted Average Exercise Price		Exercisable at September 30, 2012	Weighted Average Exercise Price
$.01 to $4.99	4,363	1.0	$	3.22	4,363	$	3.22
$5.00 to $7.45	306,821	8.9	6.65		54,241	5.92
$7.46 to $9.99	635,597	5.3	8.42		45,747	7.63
$10.00 to $14.99	16,117	2.0	12.37		16,117	12.37
$15.00 to $19.99	80,890	2.7	15.02		80,890	15.02
$20.00 to $24.99	46,663	2.7	20.19		46,663	20.19
	1,090,451	5.9	$	8.95	248,021	$	12.26

Schedule of non-vested RSUs and restricted stock outstanding as at the end of the period and changes during the reporting period

Nonvested RSUs and restricted stock outstanding as of September 30, 2012 and changes during the nine months ended September 30, 2012 were as follows:

	RSUs				Restricted Stock
	Number of Shares		Weighted Average Grant Date Fair Value		Number of Shares		Weighted Average Grant Date Fair Value
Nonvested at January 1, 2012	933,051		$	6.48	299,642		$	6.70
Granted	343,218		11.09		—		—
Vested	(318,429	)	7.19		(112,142	)	5.45
Forfeited	(104,495	)	6.68		—		—
Nonvested at September 30, 2012	853,345		$	8.09	187,500		$	7.44

- Definition

Tabular disclosure of the allocation of equity-based compensation costs to a given line item on the balance sheet and income statement for the period. This may include the reporting line for the costs and the amount capitalized and expensed.

+ References+ Details

- Definition

Tabular disclosure of option exercise prices, by grouped ranges, including the upper and lower limits of the price range, the number of shares under option, weighted average exercise price and remaining contractual option terms.

+ References+ Details

ORGANIZATION (Details) (USD $)	3 Months Ended	9 Months Ended	1 Months Ended	9 Months Ended
ORGANIZATION (Details) (USD $)	Mar. 31, 2011 segment	Sep. 30, 2012 segment	Sep. 30, 2011 RealEstate.com Internet domain names and trademarks	Sep. 30, 2012 LendingTree Loans	Sep. 30, 2011 LendingTree Loans	Sep. 30, 2012 LendingTree Loans Discover Bank	Jun. 30, 2012 LendingTree Loans Discover Bank	Feb. 07, 2012 LendingTree Loans Discover Bank
ORGANIZATION
Number of reportable business segments	2	1
Organization- Discontinued Operations
Proceeds from sale of assets			$ 8,300,000
Gain on sale of internet domain names and trademarks			7,800,000
Amount receivable for sale of assets								55,900,000
Amount received from sale of assets prior to closing								8,000,000
Amount received from sale of assets on the closing								37,900,000
Amount received from sale of assets on the first anniversary of the closing								10,000,000
Portion of the initial purchase price payment held in escrow for certain actual and/or contingent liabilities							17,100,000
Period for which marketing related services are to be provided						17 months
The pro forma financial information
Revenue				53,501,000	43,951,000
Net loss from continuing operations				(4,752,000)	(44,608,000)
Net loss attributable to common shareholders				$ (4,752,000)	$ (44,608,000)
Basic earnings per share attributable to common shareholders				$ (0.42)	$ (4.06)
Diluted earnings per share attributable to common shareholders				$ (0.42)	$ (4.06)

ORGANIZATION (Details 2) (USD $) In Millions, unless otherwise specified	1 Months Ended
	Mar. 31, 2011 item	Mar. 15, 2011 item
SurePoint and Real Estate Title Services, LLC
Business Combinations
Purchase price allocated to goodwill		$ 5.6
Purchase price allocated to intangible assets		0.7
Purchase price allocated to equipment and other assets		1.7
SurePoint and Real Estate Title Services, LLC \| Minimum
Business Combinations
Useful life of finite- lived intangible asset	3 months
SurePoint and Real Estate Title Services, LLC \| Maximum
Business Combinations
Useful life of finite- lived intangible asset	5 years
SurePoint and Real Estate Title Services, LLC \| HLC
Business Combinations
Cash paid upon closing of transaction		8.0
Contingent consideration		$ 0.2
SurePoint
Business Combinations
Period for which network lending services are provided	11 years
Number of states in which residential mortgage provider service is licensed		45
Number of employees		500
Number of licensed loan officers	300

ORGANIZATION (Details 3) (USD $)	3 Months Ended		9 Months Ended
ORGANIZATION (Details 3) (USD $)	Sep. 30, 2012	Sep. 30, 2011	Sep. 30, 2012	Sep. 30, 2011
Restated condensed consolidated statement of operations
Asset impairments				$ 29,250,000
Total costs and expenses	22,489,000	16,861,000	60,733,000	100,421,000
Operating loss	807,000	(3,760,000)	(7,232,000)	(56,470,000)
Loss before income taxes	458,000	(3,870,000)	(7,838,000)	(56,736,000)
Income tax benefit (provision)	(188,000)	464,000	3,086,000	12,128,000
Net loss from continuing operations	270,000	(3,406,000)	(4,752,000)	(44,608,000)
Loss from operations of discontinued operations, net of tax	4,112,000	8,969,000	24,745,000	(23,829,000)
Income (loss) from discontinued operations	4,112,000	16,721,000	49,058,000	(16,077,000)
Net loss attributable to common shareholders	4,382,000	13,315,000	44,306,000	(60,685,000)
Basic and diluted net loss per share from continuing operations (in dollars per share)	$ 0.02	$ (0.31)	$ (0.42)	$ (4.06)
Basic and diluted net income (loss) per share from discontinued operations (in dollars per share)	$ 0.36	$ 1.52	$ 4.34	$ (1.47)
Basic and diluted net income (loss) per share from attributable to common shareholders (in dollars per share)	$ 0.38	$ 1.21	$ 3.92	$ (5.53)
Cash Flows from Operating Activities:
Net loss	4,382,000	13,315,000	44,306,000	(60,685,000)
Less loss from discontinued operations, net of tax	(4,112,000)	(16,721,000)	(49,058,000)	16,077,000
Net loss from continuing operations	270,000	(3,406,000)	(4,752,000)	(44,608,000)
Intangible impairment				29,250,000
Deferred income taxes			134,000	(12,144,000)
Additional interest expense
Out of Period Adjustment
Additional interest expense	300,000		300,000
Impairment charge related to trade names and trademarks \| As Previously Presented
Restated condensed consolidated statement of operations
Asset impairments				250,000
Total costs and expenses				71,421,000
Operating loss				(27,470,000)
Loss before income taxes				(27,736,000)
Income tax benefit (provision)		185,000		(117,000)
Net loss from continuing operations		(3,685,000)		(27,853,000)
Loss from operations of discontinued operations, net of tax		8,531,000		(24,615,000)
Income (loss) from discontinued operations		16,283,000		(16,863,000)
Net loss attributable to common shareholders		12,598,000		(44,716,000)
Basic and diluted net loss per share from continuing operations (in dollars per share)		$ (0.33)		$ (2.54)
Basic and diluted net income (loss) per share from discontinued operations (in dollars per share)		$ 1.47		$ (1.53)
Basic and diluted net income (loss) per share from attributable to common shareholders (in dollars per share)		$ 1.14		$ (4.07)
Cash Flows from Operating Activities:
Net loss		12,598,000		(44,716,000)
Less loss from discontinued operations, net of tax		(16,283,000)		16,863,000
Net loss from continuing operations		(3,685,000)		(27,853,000)
Intangible impairment				250,000
Deferred income taxes				101,000
Impairment charge related to trade names and trademarks \| Impairment Correction
Restated condensed consolidated statement of operations
Asset impairments				29,000,000
Total costs and expenses				29,000,000
Operating loss				(29,000,000)
Loss before income taxes				(29,000,000)
Income tax benefit (provision)		279,000		12,245,000
Net loss from continuing operations		279,000		(16,755,000)
Loss from operations of discontinued operations, net of tax		438,000		786,000
Income (loss) from discontinued operations		438,000		786,000
Net loss attributable to common shareholders		717,000		(15,969,000)
Basic and diluted net loss per share from continuing operations (in dollars per share)		$ 0.02		$ (1.52)
Basic and diluted net income (loss) per share from discontinued operations (in dollars per share)		$ 0.05		$ 0.06
Basic and diluted net income (loss) per share from attributable to common shareholders (in dollars per share)		$ 0.07		$ (1.46)
Cash Flows from Operating Activities:
Net loss		717,000		(15,969,000)
Less loss from discontinued operations, net of tax		(438,000)		(786,000)
Net loss from continuing operations		279,000		(16,755,000)
Intangible impairment				29,000,000
Deferred income taxes				$ (12,245,000)

SIGNIFICANT ACCOUNTING POLICIES (Details)	3 Months Ended	9 Months Ended
SIGNIFICANT ACCOUNTING POLICIES (Details)	Sep. 30, 2012	Sep. 30, 2012
Concentrations
Number of major customers		1
Revenues \| Customer concentration
Concentrations
Concentration risk (as a percent)	22.00%	11.00%

SIGNIFICANT ACCOUNTING POLICIES (Details 2) (USD $)	9 Months Ended
SIGNIFICANT ACCOUNTING POLICIES (Details 2) (USD $)	Sep. 30, 2012	Dec. 31, 2011
Restricted cash
Restricted cash and cash equivalents	$ 29,425,000	$ 12,451,000
Revenue Recognition
Revenue related to marketing-related services	1,300,000
Cash in escrow for loan loss obligations
Restricted cash
Restricted cash and cash equivalents	20,127,000
Escrow pursuant to the asset purchase agreement \| LendingTree Loans
Restricted cash
Restricted cash and cash equivalents	17,100,000
Escrow held by an investor that purchased loans \| LendingTree Loans
Restricted cash
Restricted cash and cash equivalents	3,000,000
Cash in escrow for surety bonds
Restricted cash
Restricted cash and cash equivalents	6,501,000	6,500,000
Cash in escrow for corporate purchasing card program
Restricted cash
Restricted cash and cash equivalents	800,000	800,000
Minimum required balances for warehouse lines of credit
Restricted cash
Restricted cash and cash equivalents		4,250,000
Other
Restricted cash
Restricted cash and cash equivalents	$ 1,997,000	$ 901,000

- Definition

The carrying amounts of cash and cash equivalent items which are restricted as to withdrawal or usage. Restrictions may include legally restricted deposits held as compensating balances against short-term borrowing arrangements, contracts entered into with others, or entity statements of intention with regard to particular deposits; however, time deposits and short-term certificates of deposit are not generally included in legally restricted deposits. Excludes compensating balance arrangements that are not agreements which legally restrict the use of cash amounts shown on the balance sheet. For a classified balance sheet represents the current portion only (the noncurrent portion has a separate concept); there is a separate and distinct element for unclassified presentations.

+ References+ Details

GOODWILL AND INTANGIBLE ASSETS (Details) (USD $) In Thousands, unless otherwise specified	Sep. 30, 2012	Dec. 31, 2011
Balance of goodwill and intangible assets, net
Goodwill	$ 3,632	$ 3,632
Intangible assets with indefinite lives	10,142	10,142
Intangible assets with definite lives, net	732	1,047
Total intangible assets, net	$ 10,874	$ 11,189

- Definition

Carrying amount as of the balance sheet date, which is the cumulative amount paid and (if applicable) the fair value of any noncontrolling interest in the acquiree, adjusted for any amortization recognized prior to the adoption of any changes in generally accepted accounting principles (as applicable) and for any impairment charges, in excess of the fair value of net assets acquired in one or more business combination transactions.

+ References

Reference 1: http://www.xbrl.org/2003/role/presentationRef

-Publisher FASB

-Name Statement of Financial Accounting Standard (FAS)

-Number 141R

-Paragraph 68

-Subparagraph l

-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

Reference 2: http://www.xbrl.org/2003/role/presentationRef

-Publisher FASB

-Name Accounting Standards Codification

-Topic 350

-SubTopic 20

-Section 50

-Paragraph 1

-URI http://asc.fasb.org/extlink&oid=14024403&loc=d3e13816-109267

Reference 3: http://www.xbrl.org/2003/role/presentationRef

-Publisher FASB

-Name Accounting Standards Codification

-Topic 350

-SubTopic 20

-Section 45

-Paragraph 1

-URI http://asc.fasb.org/extlink&oid=6388280&loc=d3e13770-109266

Reference 4: http://www.xbrl.org/2003/role/presentationRef

-Publisher FASB

-Name Statement of Financial Accounting Standard (FAS)

-Number 142

-Paragraph 45

-Subparagraph e

-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

Reference 5: http://www.xbrl.org/2003/role/presentationRef

-Publisher FASB

-Name Statement of Financial Accounting Standard (FAS)

-Number 142

-Paragraph 43

-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

Reference 6: http://www.xbrl.org/2003/role/presentationRef

-Publisher FASB

-Name Statement of Financial Accounting Standard (FAS)

-Number 141R

-Paragraph 72

-Subparagraph d

-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

Reference 7: http://www.xbrl.org/2003/role/presentationRef

-Publisher FASB

-Name Statement of Financial Accounting Standard (FAS)

-Number 142

-Paragraph 45

-Subparagraph e

-Clause 1

-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

Reference 8: http://www.xbrl.org/2003/role/presentationRef

-Publisher FASB

-Name Statement of Financial Accounting Standard (FAS)

-Number 141R

-Paragraph 34

-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

+ Details

GOODWILL AND INTANGIBLE ASSETS (Details 2) (USD $) In Thousands, unless otherwise specified	9 Months Ended	12 Months Ended
	Sep. 30, 2012	Dec. 31, 2011
Intangible assets with definite lives
Cost	$ 83,803	$ 83,803
Accumulated Amortization	(83,071)	(82,756)
Net	732	1,047
Purchase agreements
Intangible assets with definite lives
Cost	50,411	50,411
Accumulated Amortization	(50,329)	(50,293)
Net	82	118
Purchase agreements \| Weighted average
Intangible assets with definite lives
Amortization Life (in years)	5 years	5 years
Technology
Intangible assets with definite lives
Cost	25,194	25,194
Accumulated Amortization	(25,142)	(25,034)
Net	52	160
Technology \| Weighted average
Intangible assets with definite lives
Amortization Life (in years)	3 years	3 years
Customer lists
Intangible assets with definite lives
Cost	6,682	6,682
Accumulated Amortization	(6,090)	(6,045)
Net	592	637
Customer lists \| Weighted average
Intangible assets with definite lives
Amortization Life (in years)	4 years 2 months 12 days	4 years 2 months 12 days
Other
Intangible assets with definite lives
Cost	1,516	1,516
Accumulated Amortization	(1,510)	(1,384)
Net	$ 6	$ 132
Other \| Weighted average
Intangible assets with definite lives
Amortization Life (in years)	2 years 6 months	2 years 6 months

GOODWILL AND INTANGIBLE ASSETS (Details 3) (USD $) In Thousands, unless otherwise specified	Sep. 30, 2012	Dec. 31, 2011
Amortization of intangible assets with definite lives computed on a straight-line basis
Three months ending December 31, 2012	$ 43
Year ending December 31, 2013	147
Year ending December 31, 2014	86
Year ending December 31, 2015	60
Year ending December 31, 2016	60
Thereafter	336
Net	$ 732	$ 1,047

PROPERTY AND EQUIPMENT (Details) (USD $) In Thousands, unless otherwise specified	Sep. 30, 2012	Dec. 31, 2011
PROPERTY AND EQUIPMENT
Property and equipment, gross	$ 30,726	$ 29,258
Less: accumulated depreciation and amortization	(23,802)	(20,883)
Total property and equipment, net	6,924	8,375
Computer equipment and capitalized software
PROPERTY AND EQUIPMENT
Property and equipment, gross	26,571	24,940
Leasehold improvements
PROPERTY AND EQUIPMENT
Property and equipment, gross	2,055	2,042
Furniture and other equipment
PROPERTY AND EQUIPMENT
Property and equipment, gross	1,488	1,450
Projects in progress
PROPERTY AND EQUIPMENT
Property and equipment, gross	$ 612	$ 826

- Definition

The cumulative amount of depreciation, depletion and amortization (related to property, plant and equipment, but not including land) that has been recognized in the income statement.

+ References+ Details

- Definition

Gross amount of long-lived physical assets used in the normal conduct of business and not intended for resale. Examples include, but are not limited to, land, buildings, machinery and equipment, office equipment, furniture and fixtures, and computer equipment.

+ References+ Details

- Definition

Amount, net of accumulated depreciation, depletion and amortization, of long-lived physical assets used in the normal conduct of business and not intended for resale. Examples include, but are not limited to, land, buildings, machinery and equipment, office equipment, furniture and fixtures, and computer equipment.

+ References+ Details

ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES (Details) (USD $)	Sep. 30, 2012	Dec. 31, 2011
Accrued expenses and other current liabilities
Litigation accruals	$ 500,000	$ 3,077,000
Accrued advertising expense	5,044,000	2,659,000
Accrued compensation and benefits	4,776,000	624,000
Accrued professional fees	1,019,000	635,000
Accrued restructuring costs	341,000	439,000
Customer deposits and escrows	1,941,000	2,211,000
Deferred rent	212,000	186,000
Other	3,534,000	6,881,000
Total accrued expenses and other current liabilities	17,367,000	16,712,000
Accrued compensation and benefits, amount moved from noncurrent to current during reporting period	3,100,000
Accrued restructuring liabilities classified in other long term liabilities	$ 600,000	$ 900,000

DISCONTINUED OPERATIONS (Details) (USD $)	3 Months Ended		9 Months Ended
DISCONTINUED OPERATIONS (Details) (USD $)	Sep. 30, 2012	Sep. 30, 2011	Sep. 30, 2012	Sep. 30, 2011	Dec. 31, 2011	Jun. 30, 2011
DISCONTINUED OPERATIONS
Probable loss						$ 1,600,000
Revenue and net income (loss) of discontinued operations
Gain from sale of discontinued operations		7,752,000	24,313,000	7,752,000
Income (loss) from discontinued operations	4,112,000	16,721,000	49,058,000	(16,077,000)
Intangible impairment				29,250,000
Restructuring charges	(48,000)	498,000	(109,000)	990,000
Assets and liabilities of facilities reported as discontinued operations
Current assets	479,000		479,000		232,425,000
Non-current assets	236,000		236,000		10,947,000
Current liabilities	31,784,000		31,784,000		250,030,000
Non-current liabilities	331,000		331,000		1,032,000
Real estate businesses
Revenue and net income (loss) of discontinued operations
Revenue	2,000	515,000	77,000	3,633,000
Income (loss) before income taxes	(282,000)	(637,000)	(442,000)	(16,936,000)
Gain from sale of discontinued operations		7,752,000		7,752,000
Income (loss) from discontinued operations	(282,000)	7,115,000	(442,000)	(9,184,000)
Goodwill disposal charges				8,000,000
Intangible impairment				4,100,000
Restructuring charges				2,500,000
Assets and liabilities of facilities reported as discontinued operations
Current assets					33,000
Current liabilities	390,000		390,000		702,000
Non-current liabilities					54,000
Net liabilities	(390,000)		(390,000)		(723,000)
LendingTree Loans
Revenue and net income (loss) of discontinued operations
Revenue	5,943,000	37,094,000	87,338,000	81,726,000
Income (loss) before income taxes	4,470,000	9,606,000	27,660,000	(6,893,000)
Income tax provision	(76,000)		(2,473,000)
Gain from sale of discontinued operations			24,313,000
Income (loss) from discontinued operations	4,394,000	9,606,000	49,500,000	(6,893,000)
Tax effect on gain from sale of discontinued operations			1,267,000	0
Intangible impairment			1,400,000
Restructuring charges				4,000,000
Assets and liabilities of facilities reported as discontinued operations
Loans held for sale					217,467,000
Other current assets	479,000		479,000		14,925,000
Current assets	479,000		479,000		232,392,000
Property and equipment					4,181,000
Goodwill					5,579,000
Other non-current assets	236,000		236,000		1,187,000
Non-current assets	236,000		236,000		10,947,000
Warehouse lines of credit					197,659,000
Other current liabilities	31,394,000		31,394,000		56,383,000
Current liabilities	31,394,000		31,394,000		254,042,000
Non-current liabilities	331,000		331,000		978,000
Net liabilities	$ (31,010,000)		$ (31,010,000)		$ (11,681,000)

DISCONTINUED OPERATIONS (Details 2) (LendingTree Loans, Discontinued operations, USD $) In Thousands, unless otherwise specified	Dec. 31, 2011
Loans held for sale
Loans held for sale	$ 217,467
Percentage of loan to total loans held for sale	100.00%
Conforming
Loans held for sale
Loans held for sale	171,375
Percentage of loan to total loans held for sale	79.00%
FHA
Loans held for sale
Loans held for sale	40,433
Percentage of loan to total loans held for sale	18.00%
Jumbo
Loans held for sale
Loans held for sale	$ 5,659
Percentage of loan to total loans held for sale	3.00%

- Definition

The aggregate carrying amount of loans receivable that will be sold to other entities. Includes mortgage and all other loans (collectively, loans) not classified as held for investment. Such loans are stated at the lower of cost or market, or elected fair value. Mortgage loans exclude mortgage-backed securities which are considered a debt security (other loan).

+ References

Reference 1: http://www.xbrl.org/2003/role/presentationRef

-Publisher FASB

-Name Accounting Standards Codification

-Topic 310

-SubTopic 10

-Section 45

-Paragraph 2

-URI http://asc.fasb.org/extlink&oid=6375948&loc=d3e4428-111522

Reference 2: http://www.xbrl.org/2003/role/presentationRef

-Publisher AICPA

-Name Statement of Position (SOP)

-Number 01-6

-Paragraph 13

-Subparagraph d

-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

Reference 3: http://www.xbrl.org/2003/role/presentationRef

-Publisher SEC

-Name Regulation S-X (SX)

-Number 210

-Section 03

-Paragraph 7

-Subparagraph a

-Article 9

Reference 4: http://www.xbrl.org/2003/role/presentationRef

-Publisher FASB

-Name Accounting Standards Codification

-Topic 942

-SubTopic 210

-Section S99

-Paragraph 1

-Subparagraph (SX 210.9-03.7(a))

-URI http://asc.fasb.org/extlink&oid=6876686&loc=d3e534808-122878

Reference 5: http://www.xbrl.org/2003/role/presentationRef

-Publisher FASB

-Name Accounting Standards Codification

-Topic 310

-SubTopic 10

-Section 35

-Paragraph 49

-URI http://asc.fasb.org/extlink&oid=16382521&loc=d3e3084-111518

Reference 6: http://www.xbrl.org/2003/role/presentationRef

-Publisher FASB

-Name Accounting Standards Codification

-Topic 948

-SubTopic 310

-Section 30

-Paragraph 1

-URI http://asc.fasb.org/extlink&oid=6490209&loc=d3e48214-111002

Reference 7: http://www.xbrl.org/2003/role/presentationRef

-Publisher FASB

-Name Statement of Financial Accounting Standard (FAS)

-Number 65

-Paragraph 4, 5, 6, 7, 9, 12, 28, 29

-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

Reference 8: http://www.xbrl.org/2003/role/presentationRef

-Publisher OTS

-Name Federal Regulation (FR)

-Number Title 12

-Section 563c.102

-Paragraph 8

-Subparagraph h

-Chapter V

-Subsection I

-LegacyDoc This is a non-GAAP reference that was included in the 2009 taxonomy. It will be removed from future versions of this taxonomy.

Reference 9: http://www.xbrl.org/2003/role/presentationRef

-Publisher FASB

-Name Statement of Financial Accounting Standard (FAS)

-Number 65

-Paragraph 4

-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

+ Details

DISCONTINUED OPERATIONS (Details 3) (LendingTree Loans, Loans held for sale, Discontinued operations, USD $)	3 Months Ended	9 Months Ended
	Sep. 30, 2012 item	Sep. 30, 2012 item	Dec. 31, 2011
Loans on Nonaccrual
Aggregate unpaid principal balance	$ 412,000	$ 412,000	$ 539,000
Difference between fair value and aggregate unpaid principal balance	(412,000)	(412,000)	(244,000)
Loans on nonaccrual			295,000
Number of loans on nonaccrual status repurchased	1	2
Net book value of repurchased loans	700,000	700,000
Measured at Fair Value
Loans on Nonaccrual
Aggregate unpaid principal balance	412,000	412,000	539,000
Difference between fair value and aggregate unpaid principal balance	(412,000)	(412,000)	(244,000)
Loans on nonaccrual			$ 295,000

DISCONTINUED OPERATIONS (Details 4) (LendingTree Loans, USD $) In Thousands, unless otherwise specified	Sep. 30, 2012	Dec. 31, 2011
Fair Value Measurements
Loans held for sale		$ 217,467
Assets and Liabilities at fair value	(31,010)	(11,681)
Fair value on a recurring basis \| Significant Other Observable Inputs (Level 2)
Fair Value Measurements
Loans held for sale		217,172
Assets and Liabilities at fair value		213,065
Fair value on a recurring basis \| Significant Other Observable Inputs (Level 2) \| Forward delivery contracts
Fair Value Measurements
Assets and Liabilities at fair value		(4,107)
Fair value on a recurring basis \| Significant Unobservable Inputs (Level 3)
Fair Value Measurements
Loans held for sale		295
Assets and Liabilities at fair value		9,436
Fair value on a recurring basis \| Significant Unobservable Inputs (Level 3) \| Interest Rate Lock Commitments
Fair Value Measurements
Assets and Liabilities at fair value		9,122
Fair value on a recurring basis \| Significant Unobservable Inputs (Level 3) \| Forward delivery contracts
Fair Value Measurements
Assets and Liabilities at fair value		19
Fair value on a recurring basis \| Total Fair Value Measurements
Fair Value Measurements
Loans held for sale		217,467
Assets and Liabilities at fair value		222,501
Fair value on a recurring basis \| Total Fair Value Measurements \| Interest Rate Lock Commitments
Fair Value Measurements
Assets and Liabilities at fair value		9,122
Fair value on a recurring basis \| Total Fair Value Measurements \| Forward delivery contracts
Fair Value Measurements
Assets and Liabilities at fair value		$ (4,088)

DISCONTINUED OPERATIONS (Details 5) (LendingTree Loans, Discontinued operations, USD $) In Thousands, unless otherwise specified	3 Months Ended		9 Months Ended
	Sep. 30, 2012	Sep. 30, 2011	Sep. 30, 2012	Sep. 30, 2011
Loans held for sale
Changes in assets that are measured at fair value on a recurring basis using significant unobservable inputs (Level 3)
Balance at the beginning of the period	$ 167	$ 861	$ 295	$ 884
Transfers into Level 3	124	72	564	732
Total net gains (losses) included in earnings (realized and unrealized)	(380)	(83)	(147)	(86)
Purchases, sales, and settlements
Sales	90	(538)	(491)	(1,041)
Settlements	(1)	(4)	(221)	(181)
Balance at the ending of the period		308		308
Interest Rate Lock Commitments
Changes in assets and liabilities that are measured at fair value on a recurring basis using significant unobservable inputs (Level 3)
Balance at the beginning of the period		6,278	9,122	5,986
Total net gains (losses) included in earnings (realized and unrealized)		40,680	73,378	81,847
Purchases, sales, and settlements
Purchases				970
Sales			(5,640)
Settlements		(2,255)	(3,401)	(8,252)
Transfers of IRLCs to closed loans		(31,956)	(73,459)	(67,804)
Balance at the ending of the period		12,747		12,747
Forward delivery contracts
Changes in assets and liabilities that are measured at fair value on a recurring basis using significant unobservable inputs (Level 3)
Balance at the beginning of the period		220	19	3
Transfers out of Level 3		(257)	(845)	(215)
Total net gains (losses) included in earnings (realized and unrealized)		69	846	302
Purchases, sales, and settlements
Purchases				(58)
Sales			(20)
Balance at the ending of the period		$ 32		$ 32

DISCONTINUED OPERATIONS (Details 6) (LendingTree Loans, Discontinued operations, USD $) In Thousands, unless otherwise specified	3 Months Ended		9 Months Ended
	Sep. 30, 2012	Sep. 30, 2011	Sep. 30, 2012	Sep. 30, 2011
Loans held for sale
Gains (losses) included in earnings relating to assets and liabilities that are measured at fair value on a recurring basis using significant unobservable inputs (Level 3)
Total net gains (losses) included in earnings relating to assets	$ (380)	$ (83)	$ (147)	$ (86)
Change in unrealized gains (losses) relating to assets still held at the end of the period	(412)		(412)	(44)
Interest Rate Lock Commitments
Gains (losses) included in earnings relating to assets and liabilities that are measured at fair value on a recurring basis using significant unobservable inputs (Level 3)
Total net gains included in earnings		40,680	73,378	81,847
Change in unrealized losses relating to assets and liabilities still held at the end of the period		12,747		12,747
Forward delivery contracts
Gains (losses) included in earnings relating to assets and liabilities that are measured at fair value on a recurring basis using significant unobservable inputs (Level 3)
Total net gains included in earnings		69	846	302
Change in unrealized losses relating to assets and liabilities still held at the end of the period		$ 32		$ 32

DISCONTINUED OPERATIONS (Details 7) (Not designated as hedging instrument, LendingTree Loans, Discontinued operations, USD $) In Thousands, unless otherwise specified	Dec. 31, 2011
Derivative instruments not designated as hedging instrument
Fair value of total derivatives	$ 5,034
Interest Rate Lock Commitments
Derivative instruments not designated as hedging instrument
Fair value of derivative assets included in current assets of discontinued operations	9,282
Fair value of derivative liabilities included in current liabilities of discontinued operations	(160)
Forward delivery contracts
Derivative instruments not designated as hedging instrument
Fair value of derivative assets included in current assets of discontinued operations	480
Fair value of derivative liabilities included in current liabilities of discontinued operations	$ (4,568)

- Definition

Fair value of derivative asset, presented on a gross basis even when the derivative instrument is subject to master netting arrangements and qualifies for net presentation in the statement of financial position.

+ References+ Details

- Definition

Fair value of derivative liability, presented on a gross basis even when the derivative instrument is subject to master netting arrangements and qualifies for net presentation in the statement of financial position.

+ References+ Details

DISCONTINUED OPERATIONS (Details 8) (LendingTree Loans, Discontinued operations, USD $) In Thousands, unless otherwise specified	3 Months Ended		9 Months Ended
	Sep. 30, 2012	Sep. 30, 2011	Sep. 30, 2012	Sep. 30, 2011
Gain/(loss) recognized in the consolidated statements of operations for derivatives
Gain/(Loss) recognized in Income on Derivative	$ 2,193	$ 37,418	$ 77,622	$ 78,029
Interest Rate Lock Commitments
Gain/(loss) recognized in the consolidated statements of operations for derivatives
Gain/(Loss) recognized in Income on Derivative		40,680	73,378	81,847
Forward delivery contracts
Gain/(loss) recognized in the consolidated statements of operations for derivatives
Gain/(Loss) recognized in Income on Derivative	$ 2,193	$ (3,262)	$ 4,244	$ (3,818)

DISCONTINUED OPERATIONS (Details 9) (LendingTree Loans, Discontinued operations, Loans held for sale, USD $)	9 Months Ended
	Sep. 30, 2012	Sep. 30, 2011	Dec. 31, 2011
Loans held for sale
Aggregate unpaid principal balance	$ 412,000		$ 208,918,000
Difference between fair value and aggregate unpaid principal balance	(412,000)		8,549,000
Loans held for sale			217,467,000
Measured at Fair Value
Loans held for sale
Aggregate unpaid principal balance	412,000		208,918,000
Difference between fair value and aggregate unpaid principal balance	(412,000)		8,549,000
Loans held for sale			217,467,000
Gain due to change in fair value of loans held for sale	$ 2,700,000	$ 3,700,000

DISCONTINUED OPERATIONS (Details 11) (LendingTree Loans, USD $)		9 Months Ended					3 Months Ended			9 Months Ended			3 Months Ended	1 Months Ended		12 Months Ended
	Jun. 30, 2012 Discover	Sep. 30, 2012 Discontinued operations item	Sep. 30, 2012 Discontinued operations Buyer one	Dec. 31, 2011 Discontinued operations Buyer one	Sep. 30, 2012 Discontinued operations Buyer two	Dec. 31, 2011 Discontinued operations Buyer two	Sep. 30, 2012 Loan loss obligations Discontinued operations item	Sep. 30, 2011 Loan loss obligations Discontinued operations	Dec. 31, 2009 Loan loss obligations Discontinued operations item	Sep. 30, 2012 Loan loss obligations Discontinued operations item segment	Sep. 30, 2011 Loan loss obligations Discontinued operations	Dec. 31, 2011 Loan loss obligations Discontinued operations	Jun. 30, 2012 Loan loss obligations Discontinued operations Buyer three	Dec. 31, 2009 Loan loss obligations Discontinued operations Buyer one	Jan. 31, 2010 Loan loss obligations Discontinued operations Buyer two	Dec. 31, 2010 Loan loss obligations Discontinued operations Buyer two item	Dec. 31, 2011 Loan loss obligations Discontinued operations Buyer two	Sep. 30, 2012 Loan loss obligations Discontinued operations Nine months ended September 30, 2012 item	Sep. 30, 2012 Loan loss obligations Discontinued operations 2011 item	Sep. 30, 2012 Loan loss obligations Discontinued operations 2010 item	Sep. 30, 2012 Loan loss obligations Discontinued operations 2009 item	Sep. 30, 2012 Loan loss obligations Discontinued operations 2008 item	Sep. 30, 2012 Loan loss obligations Discontinued operations 2007 item	Sep. 30, 2012 Loan loss obligations Discontinued operations 2006 item	Sep. 30, 2012 Loan loss obligations Discontinued operations 2005 and prior years item
Loan Loss Obligations
Number of investors to whom loans are guaranteed		2
Original principal amount of loans related to indemnification			$ 1,800,000,000	$ 1,500,000,000	$ 279,600,000	$ 32,400,000	$ 70,900,000			$ 70,900,000
Number of loan segments used to estimate loan loss obligation										4
Number of loans sold							235,900			235,900								9,200	12,500	12,400	12,800	11,000	36,300	55,000	86,700
Original principal balance							39,400,000,000			39,400,000,000								1,900,000,000	2,700,000,000	2,800,000,000	2,800,000,000	2,200,000,000	6,100,000,000	7,900,000,000	13,000,000,000
Number of loans with losses							498			498									1	4	4	33	160	207	89
Original principal balance of loans with losses							68,100,000			68,100,000									300,000	1,100,000	900,000	6,900,000	22,100,000	24,500,000	12,300,000
Amount of aggregate losses							29,100,000			29,100,000									100,000	100,000	100,000	2,200,000	8,200,000	13,400,000	5,000,000
Number of loan repurchase requests and indemnifications considered in determining the appropriate reserve amount							365			365
Percentage of full documentation first liens of original principal amount of loans related to indemnification							70.00%			70.00%
Percentage of full documentation second liens of original principal amount of loans related to indemnification							2.00%			2.00%
Percentage of limited documentation first liens of original principal amount of loans related to indemnification							24.00%			24.00%
Percentage of limited documentation second liens of original principal amount of loans related to indemnification							4.00%			4.00%
Number of buyers of previously purchased limited documentation loans with whom settlement negotiations are entered									2
Payment for settlement with buyers of previously purchased loans													3,300,000	1,900,000	4,500,000
Total settlement value																4,800,000
Additional amount of settlement payable to buyers of previously purchased loans is up to this amount												1,200,000					300,000
Number of quarterly installment payments																4
Number of settlements										3
Activity related to loss reserves on previously sold loans
Balance, beginning of period							33,096,000	24,317,000		31,512,000	16,984,000
Provisions (recoveries)							(6,493,000)	3,488,000		(109,000)	11,050,000
Charge offs to reserves							(14,000)	(785,000)		(4,814,000)	(1,014,000)
Balance, end of period							26,589,000	27,020,000		26,589,000	27,020,000
Portion of the initial purchase price payment held in escrow for certain actual and/or contingent liabilities	17,100,000
Reduction to loss reserve on previously sold loans							6,500,000			6,500,000
Weighted percentage for estimation of range of remaining loan losses in revised analysis										50.00%
Weighted percentage for estimation of range of remaining loan losses on other factor										25.00%
Estimated range of remaining possible losses due to loan losses, minimum							18,000,000			18,000,000
Estimated range of remaining possible losses due to loan losses, maximum							$ 33,000,000			$ 33,000,000

DISCONTINUED OPERATIONS (Details 12) (Warehouse lines of credit, LendingTree Loans, Discontinued operations, USD $) In Millions, unless otherwise specified	0 Months Ended
	Jul. 21, 2012 item	Sep. 30, 2012	Dec. 31, 2011
Warehouse lines of credit \| LendingTree Loans \| Discontinued operations
Warehouse Lines of Credit
Outstanding borrowings		$ 0	$ 197.7
Number of lines of credit expired	3

EARNINGS PER SHARE AND STOCK-BASED COMPENSATION (Details) (USD $) In Thousands, except Share data, unless otherwise specified	3 Months Ended			9 Months Ended
	Sep. 30, 2012	Mar. 31, 2012	Sep. 30, 2011	Sep. 30, 2012	Sep. 30, 2011
Numerator:
Income (loss) from continuing operations	$ 270		$ (3,406)	$ (4,752)	$ (44,608)
Income (loss) from discontinued operations, net of tax	4,112		16,721	49,058	(16,077)
Net income (loss) attributable to common shareholders	$ 4,382		$ 13,315	$ 44,306	$ (60,685)
Denominator:
Weighted average common shares	11,389,000		11,037,000	11,293,000	10,978,000
Net income (loss) per share attributable to common shareholders
Income (loss) from continuing operations (in dollars per share)	$ 0.02		$ (0.31)	$ (0.42)	$ (4.06)
Income (loss) from discontinued operations, net of tax (in dollars per share)	$ 0.36		$ 1.52	$ 4.34	$ (1.47)
Net income (loss) per common share, basic(in dollars per share)	$ 0.38		$ 1.21	$ 3.92	$ (5.53)
Net income (loss) per common share, diluted (in dollars per share)	$ 0.37		$ 1.21	$ 3.92	$ (5.53)
Additional disclosure
Revision in earnings per share (in dollars per share)		$ 0.03
Anti-dilutive securities excluded from calculation of diluted earnings per share	100,000		1,900,000	2,100,000	1,900,000

EARNINGS PER SHARE AND STOCK-BASED COMPENSATION (Details 2) (USD $) In Thousands, unless otherwise specified	3 Months Ended		9 Months Ended
	Sep. 30, 2012	Sep. 30, 2011	Sep. 30, 2012	Sep. 30, 2011
Non-cash compensation expense related to equity awards
Non-cash compensation expense	$ 1,309	$ 824	$ 3,565	$ 2,731
Cost of revenue
Non-cash compensation expense related to equity awards
Non-cash compensation expense	2	(1)	6	3
Selling and marketing expense
Non-cash compensation expense related to equity awards
Non-cash compensation expense	145	50	504	314
General and administrative expense
Non-cash compensation expense related to equity awards
Non-cash compensation expense	1,026	712	2,662	2,196
Product development
Non-cash compensation expense related to equity awards
Non-cash compensation expense	$ 136	$ 63	$ 393	$ 218

- Definition

Represents the expense recognized during the period arising from equity-based compensation arrangements (for example, shares of stock, unit, stock options or other equity instruments) with employees, directors and certain consultants qualifying for treatment as employees.

+ References+ Details

EARNINGS PER SHARE AND STOCK-BASED COMPENSATION (Details 3) (Stock options, USD $) In Thousands, except Share data, unless otherwise specified	9 Months Ended
	Sep. 30, 2012
Stock options
Stock options, Shares
Outstanding at the beginning of the period (in shares)	1,046,746
Granted (in shares)	150,000
Exercised (in shares)	(79,660)
Expired (in shares)	(26,635)
Outstanding at the end of the period (in shares)	1,090,451
Options exercisable at the end of the period (in shares)	248,021
Stock options, Weighted Average Exercise Price
Outstanding at the beginning of the period (in dollars per share)	$ 9.09
Granted (in dollars per share)	$ 7.43
Exercised (in dollars per share)	$ 7.49
Expired (in dollars per share)	$ 10.33
Outstanding at the end of the period (in dollars per share)	$ 8.95
Options exercisable at the end of the period (in dollars per share)	$ 12.26
Stock options, Weighted Average Remaining Contractual Term
Outstanding at the end of the period (in years)	5 years 10 months 24 days
Options exercisable at the end of the period (in years)	4 years 2 months 12 days
Stock options, Aggregate Intrinsic Value
Outstanding at the end of the period	$ 3,422
Options exercisable at the end of the period	$ 513

EARNINGS PER SHARE AND STOCK-BASED COMPENSATION (Details 4) (Stock options, USD $)	1 Months Ended	9 Months Ended
	Mar. 31, 2012	Sep. 30, 2012 item
Stock options outstanding and exercisable by range of exercise prices
Options Outstanding at the end of the period (in shares)		1,090,451
Options Outstanding - Weighted Average Remaining Contractual Term (in years)		5 years 10 months 24 days
Options Outstanding - Weighted Average Exercise Price (in dollars per share)		$ 8.95
Options Exercisable at the end of the period (in shares)		248,021
Options Exercisable - Weighted Average Exercise Price (in dollars per share)		$ 12.26
Granted (in shares)		150,000
Weighted average exercise price of stock options granted (in dollars per share)		$ 7.43
Chairman and CEO
Stock options outstanding and exercisable by range of exercise prices
Granted (in shares)	150,000
Number of equal installments for vesting of award		3
Weighted average exercise price of stock options granted (in dollars per share)		$ 7.43
Weighted average grant date fair value of stock options granted (in dollars per share)		$ 3.63
Range of exercise price $0.01 to $4.99
Stock options outstanding and exercisable by range of exercise prices
Exercise price, low end of the range (in dollars per share)		$ 0.01
Exercise price, high end of the range (in dollars per share)		$ 4.99
Options Outstanding at the end of the period (in shares)		4,363
Options Outstanding - Weighted Average Remaining Contractual Term (in years)		1 year
Options Outstanding - Weighted Average Exercise Price (in dollars per share)		$ 3.22
Options Exercisable at the end of the period (in shares)		4,363
Options Exercisable - Weighted Average Exercise Price (in dollars per share)		$ 3.22
Range of exercise price $5.00 to $7.45
Stock options outstanding and exercisable by range of exercise prices
Exercise price, low end of the range (in dollars per share)		$ 5.00
Exercise price, high end of the range (in dollars per share)		$ 7.45
Options Outstanding at the end of the period (in shares)		306,821
Options Outstanding - Weighted Average Remaining Contractual Term (in years)		8 years 10 months 24 days
Options Outstanding - Weighted Average Exercise Price (in dollars per share)		$ 6.65
Options Exercisable at the end of the period (in shares)		54,241
Options Exercisable - Weighted Average Exercise Price (in dollars per share)		$ 5.92
Range of exercise price $7.46 to $9.99
Stock options outstanding and exercisable by range of exercise prices
Exercise price, low end of the range (in dollars per share)		$ 7.46
Exercise price, high end of the range (in dollars per share)		$ 9.99
Options Outstanding at the end of the period (in shares)		635,597
Options Outstanding - Weighted Average Remaining Contractual Term (in years)		5 years 3 months 18 days
Options Outstanding - Weighted Average Exercise Price (in dollars per share)		$ 8.42
Options Exercisable at the end of the period (in shares)		45,747
Options Exercisable - Weighted Average Exercise Price (in dollars per share)		$ 7.63
Range of exercise price $10.00 to $14.99
Stock options outstanding and exercisable by range of exercise prices
Exercise price, low end of the range (in dollars per share)		$ 10.00
Exercise price, high end of the range (in dollars per share)		$ 14.99
Options Outstanding at the end of the period (in shares)		16,117
Options Outstanding - Weighted Average Remaining Contractual Term (in years)		2 years
Options Outstanding - Weighted Average Exercise Price (in dollars per share)		$ 12.37
Options Exercisable at the end of the period (in shares)		16,117
Options Exercisable - Weighted Average Exercise Price (in dollars per share)		$ 12.37
Range of exercise price $15.00 to $19.99
Stock options outstanding and exercisable by range of exercise prices
Exercise price, low end of the range (in dollars per share)		$ 15.00
Exercise price, high end of the range (in dollars per share)		$ 19.99
Options Outstanding at the end of the period (in shares)		80,890
Options Outstanding - Weighted Average Remaining Contractual Term (in years)		2 years 8 months 12 days
Options Outstanding - Weighted Average Exercise Price (in dollars per share)		$ 15.02
Options Exercisable at the end of the period (in shares)		80,890
Options Exercisable - Weighted Average Exercise Price (in dollars per share)		$ 15.02
Range of exercise price $20.00 to $24.99
Stock options outstanding and exercisable by range of exercise prices
Exercise price, low end of the range (in dollars per share)		$ 20.00
Exercise price, high end of the range (in dollars per share)		$ 24.99
Options Outstanding at the end of the period (in shares)		46,663
Options Outstanding - Weighted Average Remaining Contractual Term (in years)		2 years 8 months 12 days
Options Outstanding - Weighted Average Exercise Price (in dollars per share)		$ 20.19
Options Exercisable at the end of the period (in shares)		46,663
Options Exercisable - Weighted Average Exercise Price (in dollars per share)		$ 20.19

EARNINGS PER SHARE AND STOCK-BASED COMPENSATION (Details 5) (USD $)	9 Months Ended
	Sep. 30, 2012
RSUs
Nonvested RSUs and Restricted Stock, Number of Shares
Nonvested at the beginning of the period (in shares)	933,051
Granted (in shares)	343,218
Vested (in shares)	(318,429)
Forfeited (in shares)	(104,495)
Nonvested at the end of the period (in shares)	853,345
Nonvested RSUs and Restricted Stock, Weighted Average Grant Date Fair Value
Nonvested at the beginning of the period (in dollars per share)	$ 6.48
Granted (in dollars per share)	$ 11.09
Vested (in dollars per share)	$ 7.19
Forfeited (in dollars per share)	$ 6.68
Nonvested at the end of the period (in dollars per share)	$ 8.09
Restricted stock
Nonvested RSUs and Restricted Stock, Number of Shares
Nonvested at the beginning of the period (in shares)	299,642
Vested (in shares)	(112,142)
Nonvested at the end of the period (in shares)	187,500
Nonvested RSUs and Restricted Stock, Weighted Average Grant Date Fair Value
Nonvested at the beginning of the period (in dollars per share)	$ 6.70
Vested (in dollars per share)	$ 5.45
Nonvested at the end of the period (in dollars per share)	$ 7.44

INCOME TAXES (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended		9 Months Ended
	Sep. 30, 2012	Sep. 30, 2011	Sep. 30, 2012	Sep. 30, 2011
INCOME TAXES
Tax (provision) benefit	$ (188)	$ 464	$ 3,086	$ 12,128
Effective tax rates (as a percent)	41.10%	12.00%	39.40%	21.30%
Federal statutory rate (as a percent)		35.00%		35.00%

- Definition

A ratio calculated by dividing the reported amount of income tax expense attributable to continuing operations for the period by GAAP-basis pretax income from continuing operations.

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- Definition

The domestic federal statutory tax rate applicable under enacted tax laws to the Company's pretax income from continuing operations for the period. The "statutory" tax rate is the regular tax rate if there are alternative tax systems.

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- Definition

The sum of the current income tax expense or benefit and the deferred income tax expense or benefit pertaining to continuing operations.

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CONTINGENCIES (Details) (USD $)	3 Months Ended		9 Months Ended
CONTINGENCIES (Details) (USD $)	Sep. 30, 2012	Sep. 30, 2011	Sep. 30, 2012	Sep. 30, 2011	Dec. 31, 2011
CONTINGENCIES
Litigation settlements and contingencies	$ 510,000	$ 212,000	$ 948,000	$ 5,206,000
Liability related to litigation settlements	$ 500,000		$ 500,000		$ 3,100,000

CONTINGENCIES (Details 2) (Massachusetts Division of Banks, USD $)	9 Months Ended
	Sep. 30, 2012 item	Dec. 31, 2011
Massachusetts Division of Banks
Contingencies
Number of Joining Regulators	24
Range of possible loss, minimum	$ 500,000	$ 500,000
Range of possible loss, maximum	7,100,000	7,100,000
Amount of reserve for contingencies	$ 500,000	$ 500,000

- Definition

The estimated maximum amount of possible loss from the contingency.

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- Definition

The estimated minimum amount of possible loss from the contingency.

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SUBSEQUENT EVENTS (Details) (USD $)			0 Months Ended	9 Months Ended	0 Months Ended
SUBSEQUENT EVENTS (Details) (USD $)	Sep. 30, 2012	Dec. 31, 2011	Aug. 20, 2008 Chairman and CEO item	Sep. 30, 2012 Chairman and CEO	Aug. 30, 2010 Preferred stock Chairman and CEO	Aug. 30, 2010 Common stock Chairman and CEO	Nov. 07, 2012 Subsequent event Preferred stock Chairman and CEO
SUBSEQUENT EVENT
Aggregate liquidation preference amount			$ 5,000,000
Number of equal annual installments for vesting of preferred stock			3
Preferred stock, cumulative dividends (as a percent)				12.00%
Preferred stock, cumulative unpaid dividends (as a percent)				12.00%
Number of shares exchanged in share exchange agreement					2,902.33
Newly-issued shares in share exchange agreement						534,900
Shares of preferred stock held	0	0			2,097.67		2,097.67
Amount issued including accrued dividends for redemption of approved shares							$ 3,300,000

- Definition

The number of shares converted in a noncash (or part noncash) transaction. Noncash is defined as transactions during a period that do not result in cash receipts or cash payments in the period. "Part noncash" refers to that portion of the transaction not resulting in cash receipts or cash payments in the period.

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- Definition

The number of new shares issued in the conversion of stock in a noncash (or part noncash) transaction. Noncash is defined as transactions during a period that do not result in cash receipts or cash payments in the period. "Part noncash" refers to that portion of the transaction not resulting in cash receipts or cash payments in the period.

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- Definition

The redemption (or callable) amount of currently redeemable preferred stock. Includes amounts representing dividends not currently declared or paid but which will be payable under the redemption features or for which ultimate payment is solely within the control of the issuer.

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