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Mortgage Servicing Rights, Net
 9 Months Ended
Sep. 30, 2024
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 September 30,
Nine Months Ended September 30,
Mortgage Servicing Rights2024202320242023
Beginning Balance$516,805 $550,563 $534,390 $576,428 
Additions23,948 23,170 63,798 54,789 
Amortization(29,863)(29,830)(87,298)(87,314)
Ending Balance$510,890 $543,903 $510,890 $543,903 
Valuation Allowance
Beginning Balance$(2,602)$(6,032)$(3,187)$(7,876)
Decrease (increase)
(1,326)2,333 (741)4,177 
Ending Balance$(3,928)$(3,699)$(3,928)$(3,699)
Net Balance$506,962 $540,204 $506,962 $540,204 
 
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 September 30,Nine Months Ended September 30,
 2024202320242023
Servicing fees (1)
$43,489 $40,215 $127,620 $118,946 
Escrow interest and placement fees16,104 15,004 45,850 37,752 
Ancillary fees1,110 201 1,932 2,961 
Total$60,703 $55,420 $175,402 $159,659 
(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 three and nine months ended September 30, 2023, $2.2 million and $6.3 million, respectively, was reclassified from “Management services” to “Servicing fees.”

 Newmark’s primary servicing portfolio as of September 30, 2024 and December 31, 2023 was $64.6 billion and $62.2 billion, respectively. Newmark’s limited servicing portfolio with recorded MSRs as of September 30, 2024 and December 31, 2023 was $7.5 billion and $10.1 billion, respectively. As of September 30, 2024 and December 31, 2023, Newmark’s limited servicing portfolio also included $104.5 billion and $101.0 billion, respectively, of loans, which did not have recorded MSRs. 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 September 30, 2024 and December 31, 2023, respectively.

The estimated fair value of the MSRs as of September 30, 2024 and December 31, 2023 was $637.8 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 nine months ended September 30, 2024 and year ended December 31, 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 $16.0 million and $31.4 million, respectively, as of September 30, 2024, and by $18.1 million and $35.4 million, respectively, as of December 31, 2023.