A Guide to Smooth Servicing Transfersdiscusses the most commom problems that arise in buying and selling servicing rights, and the solutions to those problems. Its primary purpose is to familiarize the reader with the transfer process in a step-by-step format. It also serves as a servicing transfer transaction source guide. It addresses middle and upper-level mortgage industry management involved in the purchase and sale, analysis, evaluation, due diligence, transfer and administration of servici
Servicing is a very complex activity. Many processes must work together to operate profitably. Buying and selling servicing rights in the secondary market have become a primary source of capital for the mortgage industry. As a result, the industry has been able to meet competitive, capital and liquidity problems resulting from regulatory, accounting and banking changes. Use of information in the guide can help you get involved in the transfer process and can possibly save valuable time and money
The guide starts at the beginning of the transfer process discussing the decision to buy or sell servicing. Once this decision is made, a commitment letter, sometimes called a bid letter, is prepared. Following the seller's acceptance of the bid, a more definitive purchase and sale agreement is negotiated between both parties that outlines the price, timing, investor approvals, expenses, representations and warranties, and indemnifications. The guide goes on to explain the events which must occur after the purchase and sale agreement is concluded. After reading the book, I immediately wished it had been available before I attempted to negotiate my first servicing purchase and sale agreement.
The physical review of the sellers' servicing operations and the loan servicing records is called due diligence. Me guide includes a procedure/plan outline for the servicing portfolio operational review of investor accounting, escrow administration, collections...