Servicing rights occur when an originator of a portfolio of mortgages sells that portfolio to an investor.

Question

Quizplus · Accepted Answer

Servicing rights involve the originator continuing to collect the monthly payments and delinquent payments from borrowers. Therefore, choice B is the correct option. Choice A is incorrect because there is no set fee for servicing rights, and it may vary depending on the agreement between the originator and the investor. Choice C is incorrect as the originator is usually responsible for sending out delinquent notices. Choice D is incorrect as the investor may collect delinquent payments and penalty payments, but not necessarily all of them, as it depends on the servicing agreement.

Servicing Rights Occur When an Originator of a Portfolio of Mortgages