Servicing The Ticker

American Banker: Compensation structure for servicers led to issues

Loan servicing is one of the least understood aspects of mortgage banking, but one that has wreaked havoc with borrowers and at times posed significant financial volatility for banks and other firms engaged in this activity. 

A major contributing factor to the unprecedented problems in servicing nonperforming loans during the mortgage meltdown is the simple flat pricing structure for compensating servicers for their activities.

Source: American Banker
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