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Mortgage Servicing Rights | 3 Months Ended
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Mar. 31, 2015
Transfers and Servicing [Abstract] |
Mortgage Servicing Rights | Mortgage Servicing Rights We invest in mortgage servicing rights associated with residential mortgage loans and contract with a licensed sub-servicer 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 as of March 31, 2015 and December 31, 2014.
|  | March 31, 2015 |  | December 31, 2014
(In Thousands) |  | MSR Fair Value |  | Associated Principal |  | MSR Fair Value |  | Associated Principal
Mortgage Servicing Rights |  |  |  |  |  |  |  |
Conforming Loans |  | $ | 69,203 |  |  | $ | 6,800,645 |  |  | $ | 81,301 |  |  | $ | 7,705,146 |
Jumbo Loans |  | 51,121 |  |  | 5,851,993 |  |  | 57,992 |  |  | 5,962,784 |
Total Mortgage Servicing Rights |  | $ | 120,324 |  |  | $ | 12,652,638 |  |  | $ | 139,293 |  |  | $ | 13,667,930 |
The following table presents activity for MSRs for the three months ended March 31, 2015 and 2014. MSR Activity
|  | Three Months Ended March 31,
(In Thousands) |  | 2015 |  | 2014
Balance at beginning of period |  | $ | 139,293 |  |  | $ | 64,824 |
Additions |  | 18,754 |  |  | 2,858 |
Sales |  | (18,206 | ) |  | — |
Changes in fair value due to: |  |  |  |
Changes in assumptions (1) |  | (14,036 | ) |  | (1,125 | )
Other changes (2) |  | (5,481 | ) |  | (1,586 | )
Balance at End of Period |  | $ | 120,324 |  |  | $ | 64,971 |
(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 a taxable REIT subsidiary of ours. The following table details the retention and purchase of MSRs during the three months ended March 31, 2015. MSR Additions
(In Thousands) |  | Three Months Ended March 31, 2015
|  | MSR Fair Value |  | Associated Principal
Jumbo MSR additions: |  |  |  |
From securitization |  | $ | 1,872 |  |  | $ | 227,852 |
From loan sales |  | 92 |  |  | 10,145 |
Total jumbo MSR additions |  | 1,964 |  |  | 237,997 |
Conforming MSR additions: |  |  |  |
From loan sales |  | $ | 13,711 |  |  | $ | 1,352,658 |
From purchases |  | 3,079 |  |  | 318,338 |
Total conforming MSR additions |  | 16,790 |  |  | 1,670,996 |
Total MSR additions |  | $ | 18,754 |  |  | $ | 1,908,993 |
MSR Income The following table presents the components of our MSR income.
|  | Three Months Ended March 31,
(In Thousands) |  | 2015 |  | 2014
Servicing income |  |  |  |
Income |  | $ | 9,716 |  |  | $ | 3,633 |
Cost of sub-servicer |  | (1,229 | ) |  | (316 | )
Net servicing income |  | 8,487 |  |  | 3,317 |
Market valuation adjustments |  | (19,517 | ) |  | (2,711 | )
MSR provision for repurchases |  | 106 |  |  | — |
MSR income (loss) |  | $ | (10,924 | ) |  | $ | 606 |

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