XML 117 R23.htm IDEA: XBRL DOCUMENT v3.19.3.a.u2
Mortgage Servicing Rights, Net
 12 Months Ended
Dec. 31, 2019
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):
 
For the Year Ended December 31,
Mortgage Servicing Rights
2019
 
2018
 
2017
Beginning Balance
$
416,131

 
$
399,349

 
$
347,558

Additions
103,160

 
95,284

 
123,902

Purchases from an affiliate
1,489

 
3,107

 
2,055

Amortization
(88,114
)
 
(81,609
)
 
(74,166
)
Ending Balance
$
432,666

 
$
416,131

 
$
399,349

 
 
 
 
 
 
Valuation Allowance
 
 
 
 
 
Beginning Balance
$
(4,322
)
 
$
(6,723
)
 
$
(7,742
)
Decrease (increase)
(14,700
)
 
2,401

 
1,019

Ending Balance
$
(19,022
)
 
$
(4,322
)
 
$
(6,723
)
Net balance
$
413,644

 
$
411,809

 
$
392,626


 
Servicing fees are included in “Management services, servicing fees and other” on the accompanying consolidated statements of operations and were as follows (in thousands):
 
For the Year Ended December 31,
 
2019
 
2018
 
2017
Servicing fees
$
104,305

 
$
103,365

 
$
95,373

Escrow interest and placement fees
22,417

 
18,293

 
9,328

Ancillary fees
13,671

 
10,118

 
5,740

Total
$
140,393

 
$
131,776

 
$
110,441


 
Newmark’s primary servicing portfolio at December 31, 2019 and 2018 was $59.9 billion and $57.1 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 at December 31, 2019 and 2018 was $2.4 billion and $2.9 billion, respectively.

The estimated fair value of the MSRs at December 31, 2019 and 2018 was $441.7 million and $451.9 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, 2019 and 2018 were between 6.1% and 13.5%, and 3.0% and 13.5%, respectively, 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 $11.9 million and $23.3 million, respectively, at December 31, 2019 and by $12.4 million and $24.4 million, respectively, at December 31, 2018.