v3.26.1
Mortgage Servicing Rights
 3 Months Ended
Mar. 31, 2026
Transfers and Servicing [Abstract]  
Mortgage Servicing Rights
10. Mortgage Servicing Rights

The Company owned MSRs as of March 31, 2026 and December 31, 2025 resulting from the sale of loans originated by Constructive with servicing retained, distributions received from Constructive prior to July 15, 2025 or 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 16) 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 months ended March 31, 2026 and 2025, respectively (dollar amounts in thousands).

For the Three Months Ended March 31,
20262025
Balance at beginning of period
$20,893 $21,003 
Changes in fair value due to:
Changes in valuation inputs or assumptions used in valuation model
(80)(347)
Other changes in fair value, including runoff
(848)(359)
Balance at end of period
$19,965 $20,297 

The following table presents the components of servicing fee income recognized during the three months ended March 31, 2026 and 2025, respectively (dollar amounts in thousands). Servicing fee income is included in other income on the accompanying condensed consolidated statements of operations.

For the Three Months Ended March 31,
20262025
Servicing fees
$1,097 $1,249 
Prepayment fees
947 680 
Ancillary and other fee income (1)
65 50 
Servicing fee income
$2,109 $1,979 

(1)Includes default interest and late fee collections.

The Company recognized subservicing fee expenses in the amount of $0.2 million related to MSRs during the three months ended March 31, 2026 and 2025, which is included in portfolio operating expenses on the accompanying condensed consolidated statements of operations.