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Mortgage Servicing Rights
 6 Months Ended
Jun. 30, 2025
Transfers and Servicing [Abstract]  
Mortgage Servicing Rights
11. Mortgage Servicing Rights

The Company owned MSRs as of June 30, 2025 and 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, are reported at fair value pursuant to the fair value option election (see Note 17) and are included in other assets in the accompanying condensed consolidated balance sheets. 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 three and six months ended June 30, 2025, respectively (dollar amounts in thousands). The Company did not have MSRs during the three and six months ended June 30, 2024.

For the Three Months Ended June 30, 2025For the Six Months Ended June 30, 2025
Balance at beginning of period
$20,297 $21,003 
Changes in fair value due to:
Changes in valuation inputs or assumptions used in valuation model
(235)(582)
Other changes in fair value, including runoff
(613)(972)
Balance at end of period
$19,449 $19,449 

The following table presents the components of servicing fee income recognized during the three and six months ended June 30, 2025, respectively (dollar amounts in thousands). Servicing fee income is included in other income (loss) on the accompanying condensed consolidated statements of operations.

For the Three Months Ended June 30, 2025For the Six Months Ended June 30, 2025
Servicing fees
$1,216 $2,465 
Prepayment fees
715 1,395 
Ancillary and other fee income (1)
42 93 
Servicing fee income
$1,973 $3,953 

(1)Includes default interest and late fee collections.

The Company recognized subservicing fee expenses in the amount of $0.2 million and $0.4 million related to MSRs during the three and six months ended June 30, 2025, respectively, which is included in portfolio operating expenses on the accompanying condensed consolidated statements of operations.