administration of a mortgage loan, including collecting monthly payments and penalties on late payments, keeping track of the amount of principal and interest that has been paid at any particular time, acting as escrow agent for funds to cover taxes and insurance, and, if necessary, curing defaults and foreclosing when a homeowner is seriously delinquent.
administration of a mortgage loan, including collecting monthly payments and penalties on late payments, keeping track of the amount of principal and interest that has been paid at any particular time, acting as escrow agent for funds to cover taxes and insurance, and, if necessary, curing defaults and foreclosing when a homeowner is seriously delinquent. For mortgage loans that are sold in the secondary market and packaged into a mortgage-backed certificate the local bank or savings and loan that originated the mortgage typically continues servicing the mortgages for a fee.
a mortgage banking activity that consists of collecting monthly interest and principal payments, taxes, and insurance from borrowers, as well as assuring that taxes and insurance are paid to the assessor and insurer and that interest earned and principal are paid to the investor.
Example: A mortgage banker is providing mortgage servicing for a portfolio of 1,000 residential loans. The company keeps track of each loan for an annual fee based on 3/8 of 1% of the total loan balance, plus late charges on delinquent loans.
