Mortgage Servicing Rights, Net

12 Months Ended

Dec. 31, 2022

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


	Year Ended December 31,
Mortgage Servicing Rights		2022		2021		2020
Beginning Balance		$	563,488	$	528,983	$	432,666
Additions		130,301		147,789		193,913
Purchases from an affiliate		—		—		200

Amortization		(117,361)		(113,284)		(97,796)
Ending Balance		$	576,428	$	563,488	$	528,983

Valuation Allowance
Beginning Balance		$	(13,186)	$	(34,254)	$	(19,022)
Decrease (increase)		5,310		21,068		(15,232)
Ending Balance		$	(7,876)	$	(13,186)	$	(34,254)
Net Balance		$	568,552	$	550,302	$	494,729

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,
		2022		2021		2020
Servicing fees		$	147,514	$	138,495	$	116,005
Escrow interest and placement fees		20,290		4,415		6,140
Ancillary fees		20,408		16,932		7,353
Total		$	188,212	$	159,842	$	129,498

Newmark’s primary servicing portfolio as of December 31, 2022 and 2021 was $69.0 billion and $68.4 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 $1.7 billion and $2.0 billion as of December 31, 2022 and 2021, respectively.

The estimated fair value of the MSRs as of December 31, 2022 and 2021 was $667.6 million and $608.0 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, 2022 and 2021 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 $18.3 million and $35.7 million, respectively, as of December 31, 2022 and by $18.0 million and $35.1 million, respectively, as of December 31, 2021.