v3.25.4
Mortgage Servicing Rights
 12 Months Ended
Dec. 31, 2025
Transfers and Servicing [Abstract]  
Mortgage Servicing Rights
11. Mortgage Servicing Rights

The Company owned MSRs as of December 31, 2025 and 2024 resulting from the sale of loans Constructive originates 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 17) and are included in other assets in the accompanying 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 years ended December 31, 2025 and 2024, respectively (dollar amounts in thousands). The Company did not have MSRs for the year ended December 31, 2023.

For the Years Ended December 31,
20252024
Balance at beginning of period
$21,003 $— 
Additions:
MSRs received from equity investment in Constructive3,405 10,917 
MSRs acquired through business combination141 — 
Purchases of MSRs
— 9,470 
Changes in fair value due to:
Changes in valuation inputs or assumptions used in valuation model
(1,553)912 
Other changes in fair value, including runoff
(2,103)(296)
Balance at end of period
$20,893 $21,003 

The following table presents the components of servicing fee income recognized during the years ended December 31, 2025 and 2024, respectively (dollar amounts in thousands). Servicing fee income is included in other income on the accompanying consolidated statements of operations.

For the Years Ended December 31,
20252024
Servicing fees
$5,084 $516 
Prepayment fees
2,743 352 
Ancillary and other fee income (1)
209 38 
Servicing fee income
$8,036 $906 

(1)Includes default interest and late fee collections.

The Company recognized subservicing fee expenses in the amount of $0.8 million and $0.1 million related to MSRs during the years ended December 31, 2025 and 2024, respectively, which is included in portfolio operating expenses on the accompanying consolidated statements of operations.