Quarterly report pursuant to Section 13 or 15(d)

Mortgage Servicing Rights, at Fair Value

v3.23.3
Mortgage Servicing Rights, at Fair Value
 9 Months Ended
Sep. 30, 2023
Transfers and Servicing [Abstract]  
Mortgage Servicing Rights, at Fair Value
12. Mortgage Servicing Rights, at Fair Value
The servicing portfolio associated with capitalized servicing rights consists of the following (in thousands):
September 30, 2023 December 31, 2022
Fannie Mae/Freddie Mac $ 126,560  $ 7,051,851 
Ginnie Mae 285  532,328 
Private investors 946,835  1,018,159 
Total UPB $ 1,073,680  $ 8,602,338 
Weighted average interest rate 3.72  % 3.59  %

The activity in the loan servicing portfolio associated with capitalized servicing rights consisted of the following (in thousands):
For the three months ended September 30, 2023 For the three months ended September 30, 2022 For the nine months ended September 30, 2023 For the nine months ended September 30, 2022
Beginning UPB $ 1,286,085  $ 29,494,649  $ 8,602,338  $ 39,299,416 
Originated MSR —  1,788,998  42,011  9,421,902 
Sales MSR (185,915) (22,037,083) (7,416,568) (37,529,103)
Payoffs MSR (12,566) (281,332) (67,745) (1,611,107)
Other (13,924) (191,216) (86,356) (807,092)
Ending UPB $ 1,073,680  $ 8,774,016  $ 1,073,680  $ 8,774,016 

The activity in the MSR asset consisted of the following (in thousands):
For the three months ended September 30, 2023 For the three months ended September 30, 2022 For the nine months ended September 30, 2023 For the nine months ended September 30, 2022
Beginning balance $ 9,456  $ 359,006  $ 95,096  $ 427,942 
Originations —  20,241  405  114,903 
Sales (1,599) (266,723) (86,483) (470,018)
Changes in fair value due to:
Changes in market inputs or assumptions used in valuation model 271  (4,382) 363  56,938 
Changes in fair value due to portfolio runoff and other (184) (5,073) (1,437) (26,696)
Ending balance $ 7,944  $ 103,069  $ 7,944  $ 103,069 

The value of MSR is driven by the net cash flows associated with servicing activities. The cash flows include contractually specified servicing fees, late fees, and other ancillary servicing revenue. The fees were $0.4 million and $2.9 million for the three and nine months ended September 30, 2023, respectively, and $4.6 million and $32.0 million for the three and nine months ended September 30, 2022, respectively. These fees and changes in fair value of the MSR are recorded within fee income in the Condensed Consolidated Statements of Operations. As of September 30, 2023 and December 31, 2022, there were $0.0 million and $60.6 million, respectively, in MSR, at fair value, pledged as collateral for nonrecourse debt.