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The percentage of the monthly cash flow that remains after the cash flow has been pided into a coupon and principal payment for the mortgage backed securities (抵押贷款支持债券) holder. This servicing fee typically goes to the servicer of the loan, and is possibly a guarantee fee for the underwriter of the 抵押贷款支持债券.
|||For example, in a typical 抵押贷款支持债券 deal, if the interest rate on a mortgage is 8%, the 抵押贷款支持债券 holder might receive 7.5%, the servicer of the mortgage receives 0.25% and the 抵押贷款支持债券 underwriter gets 0.15%. This leaves the reamining 0.10% (8% - 7.5% - 0.25% - 0.15% = 0.10%) as excess servicing.Like an 抵押贷款支持债券, excess servicing is subject to ppayment and extension risk. When excess servicing is priced, it is valued based on an estimate of how long the annuity will last. This must be estimated since it cannot be known for certain when a mortgage borrower might refinance or otherwise pay-off his or her mortgage. The value of excess servicing can change dramatically when interest rates change, because changes in current interest rates relative to the interest rate on the mortgage determine how long the annuity of excess servicing associated with that mortgage might last. |
