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Mortgage Servicing Rights | 12 Months Ended
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Dec. 31, 2014
Mortgage Servicing Rights | Note 9. Mortgage Servicing Rights We invest in mortgage servicing rights associated with residential mortgage loans and contract with licensed sub-servicers to perform all servicing functions for these loans. The following table presents the fair value of MSRs and the aggregate principal amounts of associated loans at December 31, 2014 and 2013.
|  | December 31, 2014 |  |  | December 31, 2013 |
(In Thousands) |  | MSR Fair Value |  |  | Associated Principal |  |  | MSR Fair Value |  |  | Associated Principal |
Mortgage Servicing Rights |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Conforming Loans |  | $ | 81,301 |  |  | $ | 7,705,146 |  |  | $ | 3,331 |  |  | $ | 308,258 |
Jumbo Loans |  |  | 57,992 |  |  |  | 5,962,784 |  |  |  | 61,493 |  |  |  | 5,483,500 |
Total Mortgage Servicing Rights |  | $ | 139,293 |  |  | $ | 13,667,930 |  |  | $ | 64,824 |  |  | $ | 5,791,758 |
The following table presents activity for MSRs for the years ended December 31, 2014 and 2013. MSR Activity
|  | Years Ended December 31, |
(In Thousands) |  | 2014 |  |  | 2013 |
Balance at beginning of period |  | $ | 64,824 |  |  | $ | 5,315 |
Additions |  |  | 95,550 |  |  |  | 47,514 |
Changes in fair value due to: |  |  |  |  |  |  |  |
Changes in assumptions (1) |  |  | (12,467 | ) |  |  | 15,719 |
Other changes (2) |  |  | (8,614 | ) |  |  | (3,724 | )
Balance at End of Period |  | $ | 139,293 |  |  | $ | 64,824 |
(1) | Primarily reflects changes in prepayment assumptions due to changes in market interest rates.
(2) | Represents changes due to realization of expected cash flows.
We make investments in MSRs through the retention of servicing rights associated with the residential mortgage loans that we acquire and subsequently transfer to third parties or through the direct acquisition of MSRs sold by third parties. We hold our MSR investments at our taxable REIT subsidiary. The following table details the retention and purchase of MSRs during the years ended December 31, 2014. MSR Additions
(In Thousands) |  | December 31, 2014 |  |  | December 31, 2013 |
|  | MSR Fair Value |  |  | Associated Principal |  |  | MSR Fair Value |  |  | Associated Principal |
Jumbo MSR additions: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
From securitization |  | $ | 8,518 |  |  | $ | 1,002,235 |  |  | $ | 42,920 |  |  | $ | 4,787,264 |
From loan sales |  |  | 488 |  |  |  | 58,793 |  |  |  | 1,092 |  |  |  | 124,359 |
Total jumbo MSR additions |  |  | 9,006 |  |  |  | 1,061,028 |  |  |  | 44,012 |  |  |  | 4,911,623 |
Conforming MSR additions: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
From loan sales |  | $ | 38,995 |  |  | $ | 3,618,256 |  |  | $ | 52 |  |  | $ | 5,107 |
From purchases |  |  | 47,549 |  |  |  | 3,993,387 |  |  |  | 3,450 |  |  |  | 306,669 |
Total conforming MSR additions |  |  | 86,544 |  |  |  | 7,611,643 |  |  |  | 3,502 |  |  |  | 311,776 |
Total MSR additions |  | $ | 95,550 |  |  | $ | 8,672,671 |  |  | $ | 47,514 |  |  | $ | 5,223,399 |
MSR Income The following table presents the income from MSRs.
|  | Years Ended December 31, |
(In Thousands) |  | 2014 |  |  | 2013 |  |  | 2012 |
Servicing income |  |  |  |  |  |  |  |  |  |  |  |
Income |  | $ | 19,362 |  |  | $ | 9,239 |  |  | $ | 807 |
Cost of sub-servicer |  |  | (1,834 | ) |  |  | (925 | ) |  |  | (184 | )
Net servicing income |  |  | 17,528 |  |  |  | 8,314 |  |  |  | 623 |
Market valuation adjustments |  |  | (21,081 | ) |  |  | 11,995 |  |  |  | (2,014 | )
MSR provision for repurchases |  |  | (708 | ) |  |  | — |  |  |  | — |
MSR income (loss) |  | $ | (4,261 | ) |  | $ | 20,309 |  |  | $ | (1,391 | )

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