Note 6: Loan Servicing

Mortgage loans serviced for others are not included in the accompanying consolidated balance sheets and represent agency eligible multi‑family loans. The risks inherent in mortgage servicing assets relate primarily to changes in prepayments that result from shifts in mortgage interest rates. Call protection is in place to deter from prepayments on a 10‑year sliding scale. The unpaid principal balances of mortgage and other loans serviced for others were $6.3 billion and $5.8 billion at December 31, 2019 and 2018, respectively. Mortgage loans sub‑serviced for others are not included in the accompanying balance sheets. The unpaid principal balances of loans sub‑serviced for others were $3.8 billion and $3.1 billion at December 31, 2019 and 2018, respectively.

The following summarizes the activity in mortgage servicing rights measured using the fair value method for the years ended December 31, 2019, 2018, and 2017:


	For the Year Ended
	December 31,
	2019		2018		2017
		(In thousands)
Balance, beginning of period	$	77,844	$	66,079	$	53,670
Additions
Originated and purchased servicing		7,332		14,113		10,993
Acquisition of MCS		—		—		3,970
Subtractions
Paydowns		(5,994)		(4,196)		(5,504)
Changes in fair value due to changes in valuation inputs or assumptions used in the valuation model		(4,795)		1,848		2,950
Balance, end of period	$	74,387	$	77,844	$	66,079

Contractually specified servicing fees for retained, purchased and sub‑serviced loans were $9.7 million, $8.7 million, and $8.8 million for the years ended December 31, 2019, 2018 and 2017, respectively.

In connection with certain loan servicing and sub‑servicing agreements, the Company is to reconcile the payments received monthly on these loans, for principal and interest, taxes, insurance, and reserves for replacements. The funds are required to be maintained in separate trust accounts and not commingled with the Company’s general operating funds. At December 31, 2019 and 2018, MCC held restricted escrow funds for these loans, amounting to $459.3 million and $412.4 million, respectively.