What is MSR?

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Mortgage servicing rights (MSR) refer to a contractual agreement in which the right to service an existing mortgage is sold by the original mortgage lender to another party that specializes in the various functions involved with servicing mortgages.

  • Mortgage servicing rights are sold by the originator of a mortgage to another financial institution, which then takes over the administration of the mortgage, which includes such tasks as collecting payments and forwarding them to the originator.
  • The original lender pays the servicer a fee for performing this work.
  • Nothing changes for the mortgagor except the address to which payments are sent.
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