Mortgage Servicing Rights, Net

3 Months Ended

Mar. 31, 2025

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


	Three Months Ended March 31,
Mortgage Servicing Rights	2025		2024
Beginning Balance	$	520,487	$	534,390
Additions	18,711		19,552


Amortization	(28,393)		(28,363)
Ending Balance	$	510,805	$	525,579

Valuation Allowance
Beginning Balance	$	(2,908)	$	(3,187)
Decrease (increase)	690		(520)
Ending Balance	$	(2,218)	$	(3,707)
Net Balance	$	508,587	$	521,872

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


	Three Months Ended March 31,
	2025		2024
Servicing fees	$	44,543	$	41,956
Escrow interest and placement fees	12,242		14,190
Ancillary fees	689		468
Total	$	57,474	$	56,614

Newmark’s primary servicing portfolio as of March 31, 2025 and December 31, 2024 was $68.5 billion and $67.4 billion, respectively. Newmark’s limited servicing portfolio with recorded MSRs as of March 31, 2025 and December 31, 2024 was $6.1 billion and $6.5 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 as of both March 31, 2025 and December 31, 2024, respectively.

The estimated fair value of the MSRs as of March 31, 2025 and December 31, 2024 was $656.8 million and $658.1 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 three months ended March 31, 2025 and year ended December 31, 2024 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 $16.3 million and $32.0 million, respectively, as of March 31, 2025, and by $16.6 million and $32.5 million, respectively, as of December 31, 2024.