In one sentence
A servicer performing servicing functions on behalf of the primary servicer or lender under a subservicing agreement.
The longer version
Lenders and servicers outsource some or all servicing to sub-servicers with the systems and staff to do it at scale. The primary retains the relationship; the sub does the work.
The subservicing handoff is another point where loan files must transfer cleanly, with complete data and documents.
Common questions
- What is a sub-servicer?
- A servicer performing some or all servicing functions on behalf of the primary servicer or lender under a subservicing agreement.
- Why use a sub-servicer?
- To let an originator keep the borrower relationship or servicing rights while outsourcing day-to-day administration to a specialist.
- Who is responsible for the loan when it is sub-serviced?
- The primary servicer remains responsible to the investor or trust, while the sub-servicer performs the delegated work.
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