MSRs

During the nine months ended September 30, 2018, the Company retained the servicing rights associated with an aggregate principal balance of $415,564,795 of residential mortgage loans that the Company had previously transferred to four 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 September 30, 2018.

The following table presents the Company’s MSR activity for the period ended September 30, 2018 and the year ended December 31, 2017:



	September 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	513,807			39,688
Other changes to fair value⁽¹⁾	(293,673		)	(527,546		)
Balance at end of period	$	4,209,124		$	2,963,861

Loans associated with MSRs⁽²⁾	$	415,564,795		$	338,167,569
MSR values as percent of loans⁽³⁾	1.01		%	0.88		%

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

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


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

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



	Three Months Ended September 30, 2018		Three Months Ended September 30, 2017
Servicing income	$	285,745	$	276,211
Total servicing income	$	285,745	$	276,211



	Nine Months Ended September 30, 2018		Nine Months Ended September 30, 2017
Servicing income	$	702,127	$	721,468
Total servicing income	$	702,127	$	721,468