| Mortgage Servicing Rights and Mortgage Servicing Liabilities |
Note 11—Mortgage Servicing Rights and Mortgage Servicing Liabilities Mortgage Servicing Rights at Fair Value The activity in MSRs is as follows: | | | | | | | | | Quarter ended March 31, | | | 2026 | | 2025 | | | | (in thousands) | Balance at beginning of quarter | | $ | 9,598,941 | | $ | 8,744,528 | Additions (deductions): | | | | | | | MSRs resulting from loan sales | | | 719,586 | | | 650,349 | Sales adjustments (sales) to: | | | | | | | Non-affiliates | | | 6,428 | | | — | PennyMac Mortgage Investment Trust | | | (3,922) | | | — | | | | 722,092 | | | 650,349 | Change in fair value due to: | | | | | | | Changes in inputs used in valuation model (1) | | | 183,047 | | | (205,489) | Other changes in fair value (2) | | | (355,044) | | | (225,499) | Total change in fair value | | | (171,997) | | | (430,988) | Balance at end of quarter | | $ | 10,149,036 | | $ | 8,963,889 | Unpaid principal balance of underlying loans at end of quarter | | $ | 473,980,146 | | $ | 442,208,097 | | | | | | | | | | March 31, | | December 31, | | | 2026 | | 2025 | | | | (in thousands) | Fair value of mortgage servicing rights pledged to secure Assets sold under agreements to repurchase and Notes payable secured by mortgage servicing assets | | $ | 9,901,292 | | $ | 9,367,851 |
| (1) | Principally reflects changes in annual total prepayment speed, OAS or pricing spread and per loan annual cost of servicing inputs. |
| (2) | Represents changes due to realization of cash flows. |
Mortgage Servicing Liabilities at Fair Value The activity in MSLs is summarized below: | | | | | | | | | Quarter ended March 31, | | | 2026 | | 2025 | | | | (in thousands) | Balance at beginning of quarter | | $ | 1,572 | | $ | 1,683 | Changes in fair value due to: | | | | | | | Changes in inputs used in valuation model (1) | | | 18 | | | 5 | Other changes in fair value (2) | | | (22) | | | (37) | Total change in fair value | | | (4) | | | (32) | Balance at end of quarter | | $ | 1,568 | | $ | 1,651 | Unpaid principal balance of underlying loans at end of quarter | | $ | 15,219 | | $ | 19,070 |
| (1) | Principally reflects changes in annual total prepayment speed, OAS or pricing spread and per loan annual cost of servicing. |
| (2) | Represents changes due to realization of cash flows. |
Contractual servicing fees relating to MSRs and MSLs are recorded in Net loan servicing fees—Loan servicing fees—From non-affiliates on the Company’s consolidated statements of income; other fees relating to MSRs and MSLs are recorded in Net loan servicing fees—Loan servicing fees—Other on the Company’s consolidated statements of income. Such amounts are summarized below: | | | | | | | | | Quarter ended March 31, | | | 2026 | | 2025 | | | | (in thousands) | Contractual servicing fees | | $ | 469,366 | | $ | 417,687 | Other fees: | | | | | | | Late charges | | | 20,793 | | | 20,051 | Other | | | 4,206 | | | 3,479 | | | $ | 494,365 | | $ | 441,217 |
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