Mortgage Servicing Rights, Net

12 Months Ended

Dec. 31, 2024

The changes in the carrying amount of MSRs were as follows (in thousands):


	Year Ended December 31,
Mortgage Servicing Rights	2024		2023		2022
Beginning Balance	$	534,390	$	576,428	$	563,488
Additions	103,980		75,704		130,301
Purchases	110		—		—

Amortization	(117,993)		(117,742)		(117,361)
Ending Balance	$	520,487	$	534,390	$	576,428

Valuation Allowance
Beginning Balance	$	(3,187)	$	(7,876)	$	(13,186)
Decrease (increase)	279		4,689		5,310
Ending Balance	$	(2,908)	$	(3,187)	$	(7,876)
Net Balance	$	517,579	$	531,203	$	568,552

Servicing fees are included in “Management services, servicing fees and other” on the accompanying consolidated statements of operations and were as follows (in thousands):


	Year Ended December 31,
	2024		2023		2022
Servicing fees (1)	$	171,566	$	159,599	$	147,514
Escrow interest and placement fees	61,446		54,151		20,290
Ancillary fees	2,969		3,256		20,408
Total	$	235,981	$	217,006	$	188,212

(1) Beginning in the first quarter of 2024, the portion of Spring11’s revenues associated with its servicing and asset management portfolio is no longer reported under “Management services” but is instead recorded as part of “Servicing fees” for all periods from the first quarter of 2023 onwards. For the year ended December 31, 2023, $8.6 million was reclassified from “Management services” to “Servicing fees.”

Newmark’s primary servicing portfolio as of December 31, 2024 and December 31, 2023 was $67.4 billion and $62.2 billion, respectively. Newmark’s limited servicing portfolio with recorded MSRs as of December 31, 2024 and December 31, 2023 was $6.5 billion and $10.1 billion, respectively. Also, Newmark is the named special servicer for a number of commercial mortgage-backed securitizations. Upon certain specified events (such as, but not limited to, loan defaults and loan assumptions), the administration of the loan is transferred to Newmark. Newmark’s special servicing portfolio was $2.5 billion and $2.6 billion at December 31, 2024 and December 31, 2023, respectively.

The estimated fair value of the MSRs as of December 31, 2024 and December 31, 2023 was $658.1 million and $680.6 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 Newmark 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.

The discount rates used in measuring fair value for the years ended December 31, 2024 and 2023 were between 6.1% and 13.5% and varied based on investor type. An increase in discount rate of 100 basis points or 200 basis points would result in a decrease in fair value by $16.6 million and $32.5 million, respectively, as of December 31, 2024, and by $18.1 million and $35.4 million, respectively, as of December 31, 2023.