What is Mortgage Excess Servicing?
How Does Mortgage Excess Servicing Work?
The annual yield on an MBS is divided into three components: interest and principal for the holders and fees for the servicer and underwriter. Excess mortgage servicing is the percentage yield left over once these three payments have been made to the appropriate people.
For example, suppose an MBS pays an annual yield of 10%. The holder receives 9%, the servicer receives 0.30%, and the underwriter receives 0.20%. The mortgage excess servicing would be 0.50% (10% - 9% - 0.30% - 0.20% = 0.50%).
Why Does Mortgage Excess Servicing Matter?
Personalized Financial Plans for an Uncertain Market
In today’s uncertain market, investors are looking for answers to help them grow and protect their savings. So we partnered with Vanguard Advisers -- one of the most trusted names in finance -- to offer you a financial plan built to withstand a variety of market and economic conditions. A Vanguard advisor will craft your customized plan and then manage your savings, giving you more confidence to help you meet your goals. Click here to get started.
Read This Next
As a new Congress gets underway, the typical populist clamor is emanating from Washington. But the oft-cited mantra of "cut taxes...Read More →
Humans are generally not very good at restraining themselves, which is why they invented handcuffs. You could make a solid argument that wedding rings count as handcuffs, but even if you...Read More →