The Accounting Process Servicing

Pays Servicer principal, interest & escrow

Retains service fee to cover costs to service Remits principal, security interest and guarantee fee to agent Remits taxes and insurance to appropriate authorities

Conforming: Agency retains a guarantee fee in exchange for accepting default risk Non-conforming: primary structures -pari passu, senior subordinated or seller retains credit risk.

■ If securitized, investors receive principal and stated security coupon interest

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