How is the expected late fee income determined?
What is the importance of late fee revenue in servicing valuation?
What does it take to strategically balance mortgage rights servicing costs with projected late fee revenue to drive maximum profitability?
The myriad of influences in late fee income projections often appear to be at odds with one another. In a timely decision, these complex aspects can place even a professional mortgage banker in the divergent fork of prospect and prudence. Luckily, these disparate factors can be reconciled so that the path ahead is cleared for efficient servicing.
We have created a series of articles, Servicing Insights Volumes 1-3, that will help to inform our readers of MSR servicing best practices and advice. In this blog, we will focus on “Late Fee Revenue in Servicing Valuation – Servicing Insights Vol. 2” which offers a precise guide on how late fee revenue can drive profitability in your servicing.
Servicing Insights and Strategies for Success
The series explains detailed aspects of servicing valuation & modeling for experienced mortgage bankers.
These strategies are defined by our industry veteran and author of the Servicing Insights series, Phil Laren. We are proud to make the insights of our servicing and modeling expert available through the Servicing Insights series. Phil Laren leads the MSR services group of MCT, and provides robust software, consulting, and valuation solutions.
We are dedicated to sharing seasoned insights and strategies for success with mortgage professionals everywhere.
Explore the Significance of Late Fee Revenue in Servicing
In this volume, industry experts determine how late fee income affects the value of servicing.
Learn strategies for using CBL (Current But Late) borrowers, credit quality, and projected delinquency to determine the best course of action as you scrutinize your next steps in MSR valuation.
We all know there are correlations between CBL and FICO to inform your decisions and that servicing your loan is best done with a wide-viewed perspective, but not all models take this important variable into account.
In Vol. 2 of Servicing Insights we will explore how the new DSM (Desktop Servicing Model) takes these factors into account, empowering you with the confidence that all avenues have been analyzed. Servicing Insights Volume 2 explains how the highest credit score may not always be the best MSR and how to accurately assess LTV (Loan to Value) in relationship to FICO scores as an important step in valuation.
Examine the contradictory motivations of the investor and servicer with visual guides that harmonize and unify these divergent perspectives to help your business be more successful with late fee revenue generation.
“The best loan from an investor standpoint is not always the best loan from a servicing cash flow standpoint.” – Excerpt from Servicing Insights Vol. 2
About The Author – Phil Laren
Phil Laren has 29 years experience in all aspects of servicing, modeling, pricing, trading, negotiating, hedging, risk analysis, accounting analysis and operations.
He created MSRlive!, our newly launched mortgage servicing software, based on the same Desktop Servicing Model that has helped countless Mortgage Banking professionals make the right decisions in their servicing valuations.
In this volume he explains the importance of late fee revenue in valuation.
Read Servicing Insights Vol. 2: Late Fee Revenue in Servicing Valuation
We hope that this series of Servicing Insights will give you the assurance as a professional to judge the effectiveness of your MSR services including late fee revenue valuation.
By utilizing these valuable and practical insights, you can look forward to a measurable difference in the certainty of your servicing decisions that will impact your bottom line directly. Download, read, and learn more from our experts.
Let us know what you think in the comments!