Direct Boarding Loans to ServiceMac and Transferred Loans to ServiceMac

ServiceMac Direct Boardings and ServiceMac Transfers


Direct Boards:

Loans that start with “Retained ServiceMac” as the investor will board directly to ServiceMac.

  • These loans show ServiceMac’s payment address on the First Payment letter and the Note when the documents are drawn
  • There is no servicing transfer, and no Notice of Transfer

The loans board to ServiceMac’s MSP system when all of the following are true:

  • The loan has a funding milestone, the loan has a funding funds sent date, and the loan has either a PCV date or a Hard Stop date.   
  • Exception:  in some rare cases a loan may get a purchase advice date before it has a PCV date or a Hard Stop date.  In those instances, we will board the loan to MSP the day after purchase.

Here is an audit trail snapshot of a direct board loan:

Note - it starts as Retained ServiceMac, then changes to an investor specific ServiceMac investor:


Servicing Transfers:

Servicing transfers happen when loans do not start off with the “Retained ServiceMac” investor.  This means the customer did not get ServiceMac’s payment address on the First Payment letter and Note.  Thus, they require a transfer and they require a Notice of Transfer.

The loans board to ServiceMac’s MSP system when all of the following are true:

  • The loan has “ServiceMac” in the investor name but the previous investor name was not “Retained ServiceMac”, the loan has either a PCV date or a Hard Stop date.  
  • Exception:   in some rare cases a loan may get a purchase advice date before it has a PCV date or a Hard Stop date.  In those instances, we will board the loan to MSP the day after purchase.

Here is an audit trail snapshot of a direct board loan:   

Note - the trail starts as something other than Retained ServiceMac, then changes to an investor specific ServiceMac investor:


More Information on Direct Boarding vs Servicing Transfers:

The best customer experience is when the direct boards happen because the customer never experiences a transfer. 

However, in order for us to know a loan is going to get directed to ServiceMac before closing, the loan has to be from our “retained branches”.  

These are branches whose loans are always retained.


What causes a Servicing Transfer?

The loan is not originated in a retained branch and we do not know before closing that the loan will go to ServiceMac. 

  • Customers can pay extra discount points to ensure their loans will go to ServiceMac but many times that request comes too late (after closing docs are drawn), so the loan becomes a transfer
  • As of November 2020, all consumer direct loans are going to ServiceMac which is a business decision.  
    • We are trying to get those flagged before closing, but we are not sure this strategy will be long term yet.

Sometimes loans transfer to ServiceMac because there is an issue with the loan that we specifically want ServiceMac to handle, particularly if that loan is at risk of being repurchased.

Other times it is possible we make a strategy decision to retain loans because Mortgage Servicing Rights (MSR’s) are difficult to sell.   

  • At the onset of COVID 19 this happened and we wound up transferring over 10K loans to ServiceMac in one month alone!   This is rare, and will likely not reoccur in the foreseen future.

By and large, it makes more sense for Fairway to sell MSR’s rather than retain them.


Why do we board loans differently to ServiceMac, instead of the day after purchase like we do with other investors?

With both direct boards and transfers, the idea is to get the customers to ServiceMac as quickly as possible for the enhanced customer experience ServiceMac provides.  This is why we try to board these loans in advance of purchase, as soon as the loan as made it through Post-Closing audit (PCV).  

We will even send a loan that got a hard stop during the audit, which usually means a document needs to be corrected.   Post-Closing has a process to send the corrected document to ServiceMac once it has been cured.


Why don’t we have to look for allocated not purchased loans at RESPA cutoff?

There is no need.  As soon as a loan is eligible to go to ServiceMac, we calculate the RESPA date for the Notice of Transfer in our “Daily ServiceMac Tracking”.  

Any loan that has not been purchased by RESPA cutoff will automatically have its Notice of Transfer date adjusted to the following month in the tracker.   

The new loan boarding process will amortize the loan to force the loan data to match that new date.