Key Components in the Servicing Income

  • What are the cash components of servicing income?
  • Servicing fee income: fixed spread of unpaid principal balance (typically 30-35 bps)
  • Float: interest earned on mortgage payments received (prior to remittance)
  • Escrow: low cost source of funds (prior to remittance)
  • Ancillary income: account fees such as late charges
  • Cross-selling: maintaining the account relationship provides opportunities to cross-sell other products of the servicer

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