Mortgage Servicing Rights (MSR)
Mortgage Servicing Rights (MSRs) represent the contractual right to perform the administrative duties associated with a mortgage loan. These duties, collectively known as Mortgage Servicing, include collecting and processing loan payments, managing escrow accounts, handling customer inquiries, and pursuing Making Home Affordable Program efforts.
MSRs are a significant asset for mortgage lenders and servicers because they generate a steady stream of income from servicing fees. Importantly, MSRs can be bought and sold independently of the underlying mortgage note itself,. This means that the entity that owns the mortgage loan (the investor) may not be the same entity that services it.
The sale and transfer of MSRs are central to HUD-1 Settlement Statement, Special Information Booklet, Closing Disclosure, and Form HUD-11702, a common practice in the mortgage industry where the administrative duties for a loan shift from one servicer to another.
References
- RC_LA_ST_200.1 Servicing Transfers Concepts | MBA — mba.org
- Bulletin 2020-02 - Compliance Bulletin and Policy Guidance — files.consumerfinance.gov
Source material
- research add cross references to conceptsmortgage servicing 2026 05 17
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