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Mortgage Servicing Rights (Tables)
 6 Months Ended
Jun. 30, 2016
Transfers and Servicing [Abstract]  
Schedule of Fair Value of MSRs and Aggregate Principal Amounts of Associated Loans
The following table presents the fair value of MSRs and the aggregate principal amounts of associated loans at June 30, 2016 and December 31, 2015.
Table 9.1 – Fair Value of MSRs and Aggregate Principal Amounts of Associated Loans
 
 
June 30, 2016
 
December 31, 2015
(In Thousands)
 
MSR Fair Value
 
Associated Principal
 
MSR Fair Value
 
Associated Principal
Mortgage Servicing Rights
 
 
 
 
 
 
 
 
Conforming Loans
 
$
78,296

 
$
9,825,344

 
$
133,838

 
$
12,560,533

Jumbo Loans
 
31,750

 
5,511,905

 
58,138

 
5,705,939

Total Mortgage Servicing Rights
 
$
110,046

 
$
15,337,249

 
$
191,976

 
$
18,266,472
Activity for Residential First-Lien Mortgage Servicing Rights
The following table presents activity for MSRs for the three and six months ended June 30, 2016 and 2015.
Table 9.2 – Activity for MSRs
 
 
Three Months Ended June 30,
 
Six Months Ended June 30,
(In Thousands)
 
2016
 
2015
 
2016
 
2015
Balance at beginning of period
 
$
126,620

 
$
120,324

 
$
191,976

 
$
139,293

Additions
 
10,691

 
32,463

 
19,498

 
51,217

Sales
 
—

 
—

 
(29,559
)
 
(18,206
)
Changes in fair value due to:
 
 
 
 
 
 
 
 
Changes in assumptions (1)
 
(21,480
)
 
19,168

 
(59,808
)
 
5,132

Other changes (2)
 
(5,785
)
 
(3,493
)
 
(12,061
)
 
(8,974
)
Balance at End of Period
 
$
110,046

 
$
168,462

 
$
110,046

 
$
168,462

(1)
Primarily reflects changes in prepayment assumptions due to changes in market interest rates.
(2)
Represents changes due to receipt of expected cash flows.
Details of Retention and Purchase of MSRs
The following table details the retention and purchase of MSRs during the three and six months ended June 30, 2016.
Table 9.3 – MSR Additions
(In Thousands)
 
Three Months Ended June 30, 2016
 
Six Months Ended June 30, 2016
 
 
MSR Fair Value
 
Associated Principal
 
MSR Fair Value
 
Associated Principal
Jumbo MSR additions:
 
 
 
 
 
 
 
 
   From securitization
 
$
2,131

 
$
310,242

 
$
2,131

 
$
310,242

   From loan sales
 
78

 
10,973

 
124

 
17,492

Total jumbo MSR additions
 
2,209

 
321,215

 
2,255

 
327,734

Conforming MSR additions:
 
 
 
 
 
 
 
 
   From loan sales
 
$
16

 
$
1,772

 
$
3,380

 
$
316,290

   From purchases
 
8,466

 
864,184

 
13,863

 
1,413,218

Total conforming MSR additions
 
8,482

 
865,956

 
17,243

 
1,729,508

Total MSR Additions
 
$
10,691

 
$
1,187,171

 
$
19,498

 
$
2,057,242
Components of Mortgage Servicing Rights Income
The following table presents the components of our MSR income for the three and six months ended June 30, 2016 and 2015.
Table 9.4 – Components of MSR Income (Loss), net
 
 
Three Months Ended June 30,
 
Six Months Ended June 30,
(In Thousands)
 
2016
 
2015
 
2016
 
2015
Servicing income
 
 
 
 
 
 
 
 
Income
 
$
10,572

 
$
8,454

 
$
22,256

 
$
18,170

Cost of sub-servicer
 
(1,702
)
 
(1,162
)
 
(3,740
)
 
(2,391
)
Net servicing income
 
8,870

 
7,292

 
18,516

 
15,779

Market valuation changes of MSRs
 
(27,265
)
 
15,675

 
(71,869
)
 
(3,842
)
Market valuation changes of associated derivatives (1)
 
21,153

 
(21,814
)
 
62,210

 
(21,814
)
MSR provision for repurchases
 
25

 
(323
)
 
207

 
(217
)
MSR Income (Loss), Net
 
$
2,783

 
$
830

 
$
9,064

 
$
(10,094
)
(1)
In the second quarter of 2015, we began to identify specific derivatives used to hedge the exposure of our MSRs to changes in market interest rates. See Note 2 for additional detail.