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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