Definition of excess loan servicing

a
b
c
d
e
f
g
h
i
j
k
l
m
n
o
p
q
r
s
t
u
v
w
y
z

search


TeachMeFinance.com - explain excess loan servicing



excess loan servicing -- an asset established when loans are sold to yield a rate to the buyer that is higher or lower than the original contractual rate and the loan seller retains the servicing of the loans. The present value of the difference between the amount to be collected from the borrower and the amount to be paid to the purchaser of the loans (the point spread differential), less normal servicing costs, is the excess servicing amount recorded as the seller's asset at the time of sale. The excess servicing amount increases the gain or decreases the loss on the sale of the loan.



About the author

Mark McCracken

Author: Mark McCracken is a corporate trainer and author living in Higashi Osaka, Japan. He is the author of thousands of online articles as well as the Business English textbook, "25 Business Skills in English".


Copyright © 2005 by Mark McCracken, All Rights Reserved. TeachMeFinance.com is an informational website, and should not be used as a substitute for professional financial or legal advice. TeachMeFinance.com and its owner recommend consultation with a professional financial advisor prior to any investment or financial decision. Please read our disclaimer.