Servicer

The firm that collects payments on a securitised pool's loans, pursues late payers and passes the cash on for investors. Often the originator, it keeps that role after the loans are sold.

Where you will meet it

Servicer appears in 2 learning outcomes on the CFA syllabus. A few of them:

• Explain how securitisation works and the role of the special purpose entity
  CFA Level I · Fixed Income

  “A servicer continues to collect payments.”

• Contrast analysing corporate debt for credit risk with the analysis that securitized debt requires
  CFA Level II · Fixed Income

  “The servicer matters because weak collections raise losses, even though the originator's own default would not reach the pool.”

Practise it

• Today's practice question One question, with every wrong option explained.
• Free Level I diagnostic test Twelve questions that show which topics to start with.
• Free finance calculators Check your arithmetic on the exam's core formulas.

All terms beginning with S · Glossary