MSRs: Who should retain servicing?

by MPA19 Jun 2014
By David Lykken
Special to MPA

As you know, servicing mortgages is quite a lucrative business. In addition to issuing the mortgage, servicing the mortgage can bring in quite a substantial amount of revenue. If you can get into the business, it certainly can work for you. But finding the right partner to service your mortgages may not be such a bad idea.
Being able service mortgages requires a substantial amount of capital--which isn't very easy to borrow. That is why you typically only see large banks servicing mortgages, while the majority of lenders partner with third party to service the mortgages they've issued.
If you can grow enough to amass the capital needed to service your own mortgages, it can create a great advantage for you. However, finding the partner that you can trust and allowing them to leverage that risk can be just as beneficial. In the end, it depends on the company and its resources whether or not it is best to service the mortgage or contract it out.
David Lykken is 40-year industry veteran who has been an owner operator of three mortgage banking companies and a software company. As co-founder and Managing Partner of Mortgage Banking Solutions, David consults on virtually all aspects of mortgage banking with special emphasis executive leadership development, corporate strategic direction and implementation as well as mergers & acquisitions. A regular contributor on CNBC and Fox Business News, David also hosts a successful weekly radio program called “Lykken On Lending” ( that is heard each Monday at noon (Central Standard Time) by thousands of mortgage professionals. Recently he started producing a 1-minute video called “Today’s Mortgage Minute” that appears on hundreds of television, radio and newspaper websites daily across America.


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