MSRs

During the six months ended June 30, 2018, the Company retained the servicing rights associated with an aggregate principal balance of $428,153,251 of residential mortgage loans that the Company had previously transferred to three residential mortgage loan securitization trusts. The Company’s MSRs are held and managed at the Company’s TRS, and the Company employs one or more licensed sub-servicers to perform the related servicing activities. To the extent that the Company determines it is the primary beneficiary of a residential mortgage loan securitization trust into which it has sold loans, any associated MSRs are eliminated on the consolidation of the trust. The trust is contractually obligated to pay a portion of the interest payments from the associated residential mortgage loans for the direct servicing of the loans, and after deduction of sub-servicing fees payable to contracted sub-servicers, the net amount, excess servicing rights, represents a liability of the trust. Upon consolidation of the trust, the fair value of the excess servicing rights is equal to the related MSRs held at the Company’s TRS. In addition, the Company previously consolidated the assets and liabilities of the CSMC 2014-OAK1 Trust, but following the sale of subordinated and first loss securities during the second quarter of 2018, the Company has determined that it is no longer the primary beneficiary of the trust, and accordingly no longer consolidates its assets and liabilities. As a consequence, MSRs associated with this trust are also recorded on the Company's condensed consolidated balance sheet at June 30, 2018.

The following table presents the Company’s MSR activity as of June 30, 2018 and the year ended December 31, 2017:



	June 30, 2018			December 31, 2017
Balance at beginning of year	$	2,963,861		$	3,440,809
MSRs relating to sales to securitizations	—			10,910
MSRs related to deconsolidation of securitization trust	1,025,129			—
Changes in fair value due to:
Changes in valuation inputs or assumptions used in valuation model	336,406			39,688
Other changes to fair value (1)	(219,783		)	(527,546		)
Balance at end of period	$	4,105,613		$	2,963,861

Loans associated with MSRs (2)	$	428,153,251		$	338,167,569
MSR values as percent of loans (3)	0.96		%	0.88		%


(1)	Amounts represent changes due to realization of expected cash flows.


(2)	Amounts represent the principal balance of loans associated with MSRs outstanding at June 30, 2018 and December 31, 2017, respectively.


(3)	Amounts represent the carrying value of MSRs at June 30, 2018 and December 31, 2017, respectively divided by the outstanding balance of the loans

associated with these MSRs.

The following table presents the components of servicing income recorded on the Company’s condensed consolidated statements of operations for the three and six months ended June 30, 2018, and June 30, 2017:



	Three Months Ended June 30, 2018		Three Months Ended June 30, 2017
Servicing income	$	196,404	$	192,519
Total servicing income	$	196,404	$	192,519



	Six Months Ended June 30, 2018		Six Months Ended June 30, 2017
Servicing income	$	416,382	$	445,257
Total servicing income	$	416,382	$	445,257