16.	Mortgage Servicing Rights, Net

The changes in the carrying amount of mortgage servicing rights for the three and nine months ended September 30, 2017 and 2016 were as follows (in thousands):

	Three Months Ended September 30,						Nine Months Ended September 30,
	2017			2016			2017			2016
Mortgage Servicing Rights
Beginning balance	$	381,908		$	292,809		$	347,558		$	271,849
Additions		29,549			46,293			98,814			92,555
Purchases from an affiliate		—			198			577			2,379
Purchases from third parties		—			3,465			—			3,465
Amortization		(19,183	)		(15,278	)		(54,675	)		(42,761	)
Ending balance	$	392,274		$	327,487		$	392,274		$	327,487

Valuation Allowance
Beginning balance	$	(5,481	)	$	(11,377	)	$	(7,742	)	$	(7,936	)
Decrease (increase)		(658	)		(2,181	)		1,603			(5,622	)
Ending balance		(6,139	)		(13,558	)		(6,139	)		(13,558	)
Net balance	$	386,135		$	313,929		$	386,135		$	313,929

On July 21, 2016, the Company purchased the mortgage servicing rights to a portfolio of FHA/GNMA construction loans from an unaffiliated third party for $3.8 million.

The amount of contractually specified servicing fees (including primary and special servicing fees) and ancillary fees (including yield maintenance fees) earned by the Company were as follows:

	Three Months Ended September 30,				Nine Months Ended September 30,
	2017		2016			2017		2016
Servicing fees	$	24,721	$	19,985		$	70,505	$	56,617
Escrow interest and placement fees		2,835		945			6,315		2,584
Ancillary fees		1,501		1,572			3,909		2,998
Total Servicing fees	$	29,057	$	22,502		$	80,729	$	62,199

The Company’s primary servicing portfolio as of September 30, 2017 and December 31, 2016 was approximately $53.4 billion and $50.6 billion, respectively. The Company’s special servicing portfolio at September 30, 2017 and December 31, 2016 was $4.9 billion and $5.1 billion, respectively.

The estimated fair value of Mortgage servicing rights, net as of September 30, 2017 and December 31, 2016 was $403.5 million and $344.9 million, respectively.

Fair values are estimated using a valuation model that calculates the present value of the future net servicing cash flows. The cash flows assumptions used are based on assumptions the Company believes market participants would use to value the portfolio. Significant assumptions include estimates of the cost of servicing per loan, discount rate, earnings rate on escrow deposits and prepayment speeds. An increase in discount rate of 100 bps or 200 bps would result in a decrease in fair value by $11.5 million and $22.4 million, respectively, as of September 30, 2017 and by $9.9 million and $19.3 million, respectively, at December 31, 2016.