Servicing fee income before fair value adjustments increased 9% to $174.6 million in fourth quarter 2012 compared to $159.9 million in the prior quarter. Servicing fee income before fair value adjustments was $535.8 million in 2012, up 91% compared to 2011. Total servicing fee income of $145.4 million in the fourth quarter was up 2% quarter-over-quarter. Full year total servicing fee income was $462.0 million, up 94% compared to 2011.
Nationstar added over 550,000 new customers in 2012, resulting in over 1.1 million total customers at year-end. The average portfolio UPB for the fourth quarter was $203 billion, a 4% increase over the prior quarter average of $195 billion. The average portfolio for the full year 2012 was $157 billion, up 84% from 2011.The fair value of mortgage servicing rights decreased in the current quarter by $25.4 million, or $0.28 per share pre-tax, versus a decrease in value of $22.4 million, or $0.25 per share, in the prior quarter. The current quarter decrease was comprised of $24.3 million in portfolio runoff and $1.2 million in fair-value mark to market adjustments. Servicing pre-tax income increased 171% to $14.9 million from $5.5 million in the prior quarter and 10% compared to $13.6 million in the year-ago quarter. Servicing pre-tax margin was 9% in the current quarter, and servicing pre-tax income as a percentage of UPB was 3 basis points, an increase from the 1 basis point level in the prior quarter. Full year 2012 servicing pre-tax income was a $35.4 million, up 60% from 2011. Servicing pre-tax income in the current quarter includes other income of $15.6 million from the Rescap contract termination, mostly offset by $13.2 million in other expense from the loss on an equity method investment (NREIS). Nationstar wrote off its minority investment in NREIS and has made the determination that Solutionstar will be the focus for the build out of settlement, processing, and asset management services.
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