Mortgage Servicing Rights - MSR

  

Categories: Mortgage

See: Mortgage.

As of 2018, Americans collectively owed over $10 trillion—that’s “trillion” with a “t”—in mortgage debt. Nearly $2 billion worth of mortgages were originated that year, and if we consider that the average purchase price of a home was somewhere in the neighborhood of $300,000, that’s a whole lot of mortgages. Our point is that mortgage originators are busy people. So when it comes time to manage those mortgages—billing borrowers, collecting and processing payments, dealing with property taxes, etc.—a lot of mortgage originators say, “Ain’t nobody got time for that.”

Enter MSRs, which stands for “mortgage servicing rights.” MSRs happen when the original lending company contracts with a third party to handle all of the mortgage administration stuff we mentioned above. In essence, the MSR is buying the mortgage from the original lender, which means the lender can go off and lend more money to other wannabe homeowners. MSRs handle billing, deal with mortgage insurance premiums, and tackle tax issues and interest rate concerns and everything else that goes along with managing a mortgage. And all they ask for in return is (surprise!) a fee.

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Finance: What is a second mortgage?4 Views

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Finance allah shmoop What is a second mortgage Okay you

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know what a first mortgages it's otherwise cleverly named what

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is called it is called oh yeah Mortgage it's Just

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a loan on a house You paid four hundred grand

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for this baby Hundred grand down two hundred fifty grand

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in a first mortgage And they're still fifty grand You

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owe well where's that fifty large coming from the bank

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wouldn't loan you any more on a first mortgage that

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was costing you six percent a year Tio you know

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to rent that money So you had to get a

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second mortgage which should things go awry and you become

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a statistic Well that's it's fully behind the first mortgage

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in the priority stack of payback So in a bankruptcy

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situation the first mortgage first what's called a first mortgage

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get it fully paid along with any fees associated with

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it and back interest accrued and any other things that

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are associated with that first mortgage it stands in line

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first in priority Then any cash leftover gets attributed to

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that second mortgage So not surprisingly second mortgage money costs

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a lot more to rent then first mortgage money because

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the risk of non payment in a bad situation is

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meaningful E higher especially when the borrowed does this for 00:01:25.136 --> [endTime] a living

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