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A securitization transaction with a graduated servicing fee creates a sufficient incentive for other servicers to take over the responsibilities if the original servicer defaults.
Erik Lukacsko, the associate director for structured finance ratings at Standard & Poor's, spoke about the concept at the Mortgage Bankers Association of America's National Servicing Conference here.
The graduated servicing fee was used in a nonconforming securitization deal from Option One Mortgage Corp.
Unlike a normal transaction, where ...
Source: HighBeam Research, Sliding Fee Gets O.K. for MBS Transactions.(mortgage bank...