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Mortgage Servicing Rights
 12 Months Ended
Dec. 31, 2024
Transfers and Servicing [Abstract]  
Mortgage Servicing Rights
11. Mortgage Servicing Rights

The Company owned MSRs as of December 31, 2024 resulting from distributions of MSRs received from its equity investment in an entity that originates residential loans (see Note 6) and purchases of MSRs. The Company's MSRs are associated with business purpose loans and are reported at fair value pursuant to the fair value option election (see Note 17). The primary risks associated with the Company's MSRs are changes in interest rates and prepayment speeds.

The following table presents activity related to MSRs for the year ended December 31, 2024 (dollar amounts in thousands). The Company did not have MSRs for the years ended December 31, 2023 and 2022.

Year Ended December 31, 2024
Balance at beginning of period
$— 
MSRs received from equity investment
10,917 
Purchases of MSRs
9,470 
Changes in fair value due to:
Changes in valuation inputs or assumptions used in valuation model
912 
Other changes in fair value, including runoff
(296)
Balance at end of period
$21,003 

The following table presents the components of servicing fee income recognized during the year ended December 31, 2024 (dollar amounts in thousands). Servicing fee income is included in other income (loss) on the accompanying consolidated statements of operations.

Year Ended December 31, 2024
Servicing fees
$516 
Prepayment fees
352 
Ancillary and other fee income (1)
38 
Servicing fee income
$906 

(1)Includes default interest and late fee collections.

The Company recognized subservicing fee expenses in the amount of $0.1 million related to MSRs during the year ended December 31, 2024, which is included in portfolio operating expenses on the accompanying consolidated statements of operations.