Mortgage Servicing Rights and Mortgage Servicing Liabilities

12 Months Ended

Dec. 31, 2024

Mortgage Servicing Rights and Mortgage Servicing Liabilities

Mortgage Servicing Rights and Mortgage Servicing Liabilities

Note 10—Mortgage Servicing Rights and Mortgage Servicing Liabilities

Mortgage Servicing Rights at Fair Value:

The activity in MSRs is as follows:

	Year ended December 31,
	2024		2023		2022
	(in thousands)
Balance at beginning of year	$	7,099,348	$	5,953,621	$	3,878,078
Additions (deductions):
MSRs resulting from loan sales		2,280,830		1,849,957		1,718,094
Purchases		—		—		3,993
Transfer of mortgage servicing rights relating to delinquent loans to Agency		—		(305)		—
Exchange of mortgage servicing spread for interest-only stripped mortgage-backed securities		(202,186)		(98,066)		—
		2,078,644		1,751,586		1,722,087
Change in fair value due to:
Changes in inputs used in valuation model (1)		407,423		56,757		877,324
Other changes in fair value (2)		(840,887)		(662,616)		(523,868)
Total change in fair value		(433,464)		(605,859)		353,456
Balance at end of year	$	8,744,528	$	7,099,348	$	5,953,621
Unpaid principal balance of underlying loans at end of year	$	426,055,220	$	370,244,119	$	314,567,639
			December 31,
			2024		2023
				(in thousands)
Fair value of mortgage servicing rights pledged to secure Assets sold under agreements to repurchase and Notes payable secured by mortgage servicing assets			$	8,609,388	$	7,033,892

(1) Principally reflects changes in pricing spread, annual total prepayment speed, per loan annual cost of servicing and UPB of underlying loan inputs.

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

Mortgage Servicing Liabilities at Fair Value:

The activity in MSLs is summarized below:

	Year ended December 31,
	2024		2023		2022
	(in thousands)
Balance at beginning of year	$	1,805	$	2,096	$	2,816
Changes in fair value due to:
Changes in inputs used in valuation model (1)		35		(50)		(347)
Other changes in fair value (2)		(157)		(241)		(373)
Total change in fair value		(122)		(291)		(720)
Balance at end of year	$	1,683	$	1,805	$	2,096
Unpaid principal balance of underlying loans at end of year	$	19,528	$	24,892	$	33,157

(1) Principally reflects changes in annual total prepayment speed, pricing spread and per loan annual cost of servicing.

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

Contractual servicing fees relating to MSRs and MSLs are recorded in Net loan servicing fees—Loan servicing fees—From non-affiliates on the consolidated statements of income; late charges and other ancillary fees relating to MSRs and MSLs are recorded in Net loan servicing fees—Loan servicing fees—Other on the Company’s consolidated statements of income. Such amounts are summarized below:

	Year ended December 31,
	2024		2023		2022
	(in thousands)
Contractual servicing fees	$	1,529,452	$	1,268,650	$	1,054,828
Other fees:
Late charges		73,227		55,685		40,583
Other		13,705		9,539		13,742
	$	1,616,384	$	1,333,874	$	1,109,153