Mortgage Servicing Rights and Mortgage Servicing Liabilities (Tables)

9 Months Ended

Sep. 30, 2019

Mortgage Servicing Rights and Mortgage Servicing Liabilities

Schedule of activity in MSRs carried at fair value

	Quarter ended September 30,				Nine months ended September 30,
	2019		2018		2019		2018
	(in thousands)
Balance at beginning of period	$	2,720,335	$	2,486,157	$	2,820,612	$	638,010
Reclassification of mortgage servicing rights previously accounted for under the amortization method pursuant to adoption of the fair value method of accounting		—		—		—		1,482,426
Balance after reclassification		2,720,335		2,486,157		2,820,612		2,120,436
Additions:
Resulting from loan sales		246,757		149,000		545,839		448,604
Purchases		46		163,511		227,445		193,640
		246,803		312,511		773,284		642,244
Change in fair value due to:
Changes in inputs used in valuation model (1)		(286,880)		64,293		(704,967)		239,538
Other changes in fair value (2)		(124,005)		(76,997)		(332,676)		(216,254)
Total change in fair value		(410,885)		(12,704)		(1,037,643)		23,284
Balance at end of period	$	2,556,253	$	2,785,964	$	2,556,253	$	2,785,964
					September 30,		December 31,
					2019		2018
					(in thousands)
Fair value of mortgage servicing rights pledged to secure Assets sold under agreements to repurchase and Notes payable					$	2,550,602	$	2,807,333

(1) Principally reflects changes in discount rate and prepayment speed inputs, primarily due to changes in market interest rates.

(2) Represents changes due to realization of cash flows.

Schedule of activity in mortgage servicing liability carried at fair value

	Quarter ended September 30,				Nine months ended September 30,
	2019		2018		2019		2018
	(in thousands)
Balance at beginning of period	$	12,948	$	10,253	$	8,681	$	14,120
Mortgage servicing liabilities resulting from loan sales		19,501		1,741		27,133		5,548
Changes in fair value due to:
Changes in valuation inputs used in valuation model (1)		8,630		3,410		14,687		8,590
Other changes in fair value (2)		(6,785)		(5,635)		(16,207)		(18,489)
Total change in fair value		1,845		(2,225)		(1,520)		(9,899)
Balance at end of period	$	34,294	$	9,769	$	34,294	$	9,769

(1) Principally reflects changes in expected borrower performance and servicer losses given default.

(2) Represents changes due to realization of cash flows.

Summary of servicing fees, late fees and ancillary and other fees relating to MSRs recorded on the consolidated statements of income

	Quarter ended September 30,				Nine months ended September 30,
	2019		2018		2019		2018
	(in thousands)
Contractual servicing fees	$	185,967	$	147,182	$	533,510	$	421,536
Other fees:
Late charges		12,430		5,087		31,258		19,595
Other		4,846		1,244		9,119		4,620
	$	203,243	$	153,513	$	573,887	$	445,751