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Mortgage Servicing Rights, Net
 6 Months Ended
Jun. 30, 2020
Transfers and Servicing [Abstract]  
Mortgage Servicing Rights, Net
Mortgage Servicing Rights, Net

The changes in the carrying amount of MSRs were as follows (in thousands):
 
 
Three Months Ended June 30,
 
Six Months Ended June 30,
Mortgage Servicing Rights
 
2020
 
2019
 
2020
 
2019
Beginning Balance
 
$
449,391

 
$
413,004

 
$
432,666

 
$
416,131

Additions
 
34,598

 
21,433

 
73,565

 
38,687

Purchases from an affiliate
 
108

 
424

 
200

 
722

Amortization
 
(23,624
)
 
(21,436
)
 
(45,958
)
 
(42,115
)
Ending Balance
 
$
460,473

 
$
413,425

 
$
460,473

 
$
413,425

 
 
 
 
 
 
 
 
 
Valuation Allowance
 
 
 
 
 
 
 
 
Beginning Balance
 
$
(36,578
)
 
$
(6,044
)
 
$
(19,022
)
 
$
(4,322
)
Decrease (increase)
 
(663
)
 
(6,598
)
 
(18,219
)
 
(8,320
)
Ending Balance
 
$
(37,241
)
 
$
(12,642
)
 
$
(37,241
)
 
$
(12,642
)
Net Balance
 
$
423,232

 
$
400,783

 
$
423,232

 
$
400,783


 
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 June 30,
 
Six Months Ended June 30,
 
2020
 
2019
 
2020
 
2019
Servicing fees
$
28,250

 
$
25,977

 
$
54,915

 
$
51,608

Escrow interest and placement fees
727

 
5,624

 
4,119

 
10,987

Ancillary fees
1,283

 
4,131

 
3,524

 
7,315

Total
$
30,260

 
$
35,732

 
$
62,558

 
$
69,910


 
Newmark’s primary servicing portfolio at June 30, 2020 and December 31, 2019 was $62.8 billion and $59.9 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 loans assumptions), the administration of the loan is transferred to Newmark. Newmark’s special servicing portfolio was $2.4 billion at June 30, 2020 and December 31, 2019, respectively.

The estimated fair value of the MSRs at June 30, 2020 and December 31, 2019 was $448.4 million and $441.7 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 six months ended June 30, 2020 and the year ended December 31, 2019 were between 6.1% and 13.5%, and 3.0% and 13.5%, respectively, 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 $12.1 million and $23.7 million, respectively, at June 30, 2020 and by $11.9 million and $23.3 million, respectively, at December 31, 2019.