Servicing retained
Servicing retained means the lender sells or assigns a loan but keeps the right and the job of servicing it: collecting payments, managing draws and escrow, and remitting funds to the new owner.
How servicing retained works
When a loan is sold servicing retained, ownership moves to the buyer but the borrower keeps paying the original lender, which passes the money on to the owner, usually net of a servicing fee. The Office of the Comptroller of the Currency’s mortgage banking handbook explains that originating a loan creates two things, the loan and the right to service it, and that loans can be sold with servicing retained or released. Regulation X describes servicing as receiving a borrower’s scheduled payments and paying them to the owner of the loan and other parties.
In private lending, servicing usually includes collecting interest, processing construction or rehab draws, tracking insurance and taxes, handling extensions and payoffs, and sending the owner a monthly report.
Why it matters to a private lender
Keeping servicing keeps you in front of the borrower. You manage the draws, you hear first when a project runs late, and you are the natural lender for the borrower’s next deal. You also take on an obligation: the owner expects accurate, on-time remittances and reports, and the servicing agreement sets the standard you are held to.
With Lender Capital, the lender keeps servicing and the borrower relationship on every placed loan. When you sell a loan you already funded through Lender Capital, you choose servicing retained or released. See the servicing and reporting capital partners expect.
Where Lender Capital fits
Lender Capital places first-lien, business-purpose real estate loans with capital partners. You apply once, then submit each loan with the full file. We send it only to capital partners whose criteria it fits, one partner funds the whole loan at closing and it is assigned to them. You keep your points (less the placement fee), earn the spread above the partner’s rate and service the loan. You pay a placement fee only when a loan funds.
Lender Capital is a business-to-business platform. This page is general information, not legal, tax or securities advice. Terms of warehouse lines and other funding sources vary by provider; confirm them with each provider and your counsel.