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MORTGAGE SERVICING RIGHTS | 9 Months Ended
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Sep. 30, 2019
Transfers and Servicing [Abstract] |
MORTGAGE SERVICING RIGHTS |
7. MORTGAGE SERVICING RIGHTS
The Company owns variable interests in an entity that invests in MSRs. Refer to the “Variable Interest Entities” Note for a detailed discussion on this topic. MSRs represent the rights associated with servicing pools of residential mortgage loans. The Company and its subsidiaries do not originate or directly service residential mortgage loans. Rather, these activities are carried out by duly licensed subservicers who perform substantially all servicing functions for the loans underlying the MSRs. The Company intends to hold the MSRs as investments and elected to account for all of its investments in MSRs at fair value. As such, they are recognized at fair value on the accompanying Consolidated Statements of Financial Condition with changes in the estimated fair value presented as a component of Net unrealized gains (losses) on instruments measured at fair value through earnings in the Consolidated Statements of Comprehensive Income (Loss). Servicing income, net of servicing expenses, is reported in Other income (loss) in the Consolidated Statements of Comprehensive Income (Loss). The following table presents activity related to MSRs for the three and nine months ended September 30, 2019 and 2018:
| Three Months Ended |  | Nine Months Ended
| September 30, 2019 |  | September 30, 2018 |  | September 30, 2019 |  | September 30, 2018
| (dollars in thousands)
Fair value, beginning of period | $ | 425,328 |  |  | $ | 599,014 |  |  | $ | 557,813 |  |  | $ | 580,860 |
Change in fair value due to: |  |  |  |  |  |  |
Changes in valuation inputs or assumptions (1) | (17,312 | ) |  | (19,913 | ) |  | (116,150 | ) |  | (61,011 | )
Other changes, including realization of expected cash flows | (21,965 | ) |  | 9,732 |  |  | (55,612 | ) |  | 68,984 |
Fair value, end of period | $ | 386,051 |  |  | $ | 588,833 |  |  | $ | 386,051 |  |  | $ | 588,833 |
(1) Principally represents changes in discount rates and prepayment speed inputs used in valuation model, primarily due to changes in interest rates.
For the three and nine months ended September 30, 2019, the Company recognized $27.7 million and $82.9 million, respectively, and for the three and nine months ended September 30, 2018, the Company recognized $27.7 million and $83.8 million, respectively, of net servicing income from MSRs in Other income (loss) in the Consolidated Statements of Comprehensive Income (Loss).

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- Definition The entire disclosure for a transferor's continuing involvement in financial assets that it has transferred in a securitization or asset-backed financing arrangement, the nature of any restrictions on assets reported by an entity in its statement of financial position that relate to a transferred financial asset (including the carrying amounts of such assets), how servicing assets and servicing liabilities are reported, and (for securitization or asset-backed financing arrangements accounted for as sales) when a transferor has continuing involvement with the transferred financial assets and transfers of financial assets accounted for as secured borrowings, how the transfer of financial assets affects an entity's financial position, financial performance, and cash flows. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 860 -URI http://asc.fasb.org/topic&trid=2197590 + Details
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