7. Capitalized servicing assets

Changes in capitalized servicing assets were as follows:


	Residential Mortgage Loans									Commercial Mortgage Loans
For Year Ended December 31,	2014			2013			2012			2014			2013			2012
	(In thousands)
Beginning balance	$	126,377		$	104,855		$	131,264		$	72,499		$	59,978		$	51,250
Originations		28,285			52,375			14,577			15,922			26,754			19,653
Purchases		289			272			109			730			—			—
Recognized in loan securitization transactions		—			13,696			—			—			—			—
Amortization		(45,080	)		(44,821	)		(41,095	)		(16,212	)		(14,233	)		(10,925	)

		109,871			126,377			104,855			72,939			72,499			59,978
Valuation allowance		—			(300	)		(4,500	)		—			—			—

Ending balance, net	$	109,871		$	126,077		$	100,355		$	72,939		$	72,499		$	59,978


	Other									Total
For Year Ended December 31,	2014			2013			2012			2014			2013			2012
	(In thousands)
Beginning balance	$	11,225		$	8,143		$	15,678		$	210,101		$	172,976		$	198,192
Originations		—			—			—			44,207			79,129			34,230
Purchases		—			—			—			1,019			272			109
Recognized in loan securitization transactions		—			9,382			—			—			23,078			—
Amortization		(7,118	)		(6,300	)		(7,535	)		(68,410	)		(65,354	)		(59,555	)

		4,107			11,225			8,143			186,917			210,101			172,976
Valuation allowance		—			—			—			—			(300	)		(4,500	)

Ending balance, net	$	4,107		$	11,225		$	8,143		$	186,917		$	209,801		$	168,476

Residential mortgage loans serviced for others were $64.4 billion at December 31, 2014, $69.1 billion at December 31, 2013 and $32.1 billion at December 31, 2012. Reflected in residential mortgage loans serviced for others were loans sub-serviced for others of $42.1 billion, $46.6 billion and $12.5 billion at December 31, 2014, 2013, and 2012, respectively. Commercial mortgage loans serviced for others were $11.3 billion at December 31, 2014, $11.4 billion at December 31, 2013 and $10.6 billion at December 31, 2012. Other loans serviced for others include small-balance commercial mortgage loans and automobile loans totaling $3.5 billion, $4.4 billion and $3.8 billion at December 31, 2014, 2013 and 2012, respectively.

Changes in the valuation allowance for capitalized residential mortgage servicing assets were not significant in 2014, 2013 or 2012. The estimated fair value of capitalized residential mortgage loan servicing assets was approximately $228 million at December 31, 2014 and $266 million at December 31, 2013. The fair value of capitalized residential mortgage loan servicing assets was estimated using weighted-average discount rates of 11.9% and 9.3% at December 31, 2014 and 2013, respectively, and contemporaneous prepayment assumptions that vary by loan type. At December 31, 2014 and 2013, the discount rate represented a weighted-average option-adjusted spread (“OAS”) of 1065 basis points (hundredths of one percent) and 770 basis points, respectively, over market implied forward London Interbank Offered Rates (“LIBOR”). The estimated fair value of capitalized residential mortgage loan servicing rights may vary significantly in subsequent periods due to changing interest rates and the effect thereof on prepayment speeds. The estimated fair value of capitalized commercial mortgage loan servicing assets was approximately $87 million and $85 million at December 31, 2014 and 2013, respectively. An 18% discount rate was used to estimate the fair value of capitalized commercial mortgage loan servicing rights at December 31, 2014 and 2013 with no prepayment assumptions because, in general, the servicing agreements allow the Company to share in customer loan prepayment fees and thereby recover the remaining carrying value of the capitalized servicing rights associated with such loan. The Company’s ability to realize the carrying value of capitalized commercial mortgage servicing rights is more dependent on the borrowers’ abilities to repay the underlying loans than on prepayments or changes in interest rates.

The key economic assumptions used to determine the fair value of significant portfolios of capitalized servicing rights at December 31, 2014 and the sensitivity of such value to changes in those assumptions are summarized in the table that follows. Those calculated sensitivities are hypothetical and actual changes in the fair value of capitalized servicing rights may differ significantly from the amounts presented herein. The effect of a variation in a particular assumption on the fair value of the servicing rights is calculated without changing any other assumption. In reality, changes in one factor may result in changes in another which may magnify or counteract the sensitivities. The changes in assumptions are presumed to be instantaneous.


	Residential			Commercial
Weighted-average prepayment speeds		11.22	%
Impact on fair value of 10% adverse change	$	(8,001,000	)
Impact on fair value of 20% adverse change		(15,364,000	)
Weighted-average OAS		10.65	%
Impact on fair value of 10% adverse change	$	(6,959,000	)
Impact on fair value of 20% adverse change		(13,492,000	)
Weighted-average discount rate					18.00	%
Impact on fair value of 10% adverse change				$	(3,671,000	)
Impact on fair value of 20% adverse change					(7,092,000	)

As described in note 19, during 2013 the Company securitized approximately $1.3 billion of one-to-four family residential mortgage loans formerly held in the Company’s loan portfolio in guaranteed mortgage securitizations with Ginnie Mae and securitized and sold approximately $1.4 billion of automobile loans. In conjunction with these transactions, the Company retained the servicing rights to the loans.