Back-Up Servicing
Back-up servicing solutions for all asset types. Custom tailored servicing solutions.
1st Servicing provides custom tailored back-up servicing solutions for commercial real estate, single family real estate, leases, structured settlements, and royalty type arrangements across the nation. We provide hot, warm or cold highly customized solutions unique to each platform and capital provider. Our founder, Ann Hambly has spent her entire 40-year career in servicing. Ann has created many servicing companies from scratch and has assisted many large organizations build a servicing platform.
About
Nationwide Servicing
The 1st Servicing team has decades of experience across multiple economic cycles, highly experienced servicing staff, a customer focused approach to everything, and laser focus on compliance and data security. We provide custom tailored servicing solutions for:
- Asset Backed Securities (ABS)
- Residential Mortgage Backed Securities (RMBS)
- HELOC’s
- Single Family Real Estate (SFRE)
ABS
Asset Backed Securities
HELOC’s
Home Equity Line of Credit
RMBS
Residential Mortgage Backed Securities
SFRE
Single Family Real Estate
“Servicing is something you should never have to think about. If it is done right, no one will even know it is being done.”
-Ann Hambly
Custom Tailored Servicing Solutions
We provide hot, warm or cold highly customized solutions unique to each platform and capital provider. Our founder, Ann Hambly has spent her entire 40-year career in servicing. Ann has created many servicing companies from scratch and has assisted many large organizations build a servicing platform.
What is a back-up servicer, and why would you need one?
- A service provider who agrees to take over the servicing of a portfolio of assets on the occurrence of certain trigger events, most commonly failure of the existing servicer to perform or the servicer’s insolvency.
- From the perspective of the legal and/or beneficial owner of the relevant assets, when it comes to the day-to-day administration of those assets, it is important that there is a Plan B if the current servicer of those assets should fail to perform or becomes insolvent. A back-up servicer who could step into the shoes of a failing servicer could mitigate the following risks:
- the possibility that collections of the receivables expected from the underlying assets are not carried out or not carried out to the standard required;
- leading on from point 1, the potential impact of disrupting the servicing of any debt raised on the acquisition of these assets as well as any payments expected by investors; and
- where the transaction is rated and the servicer suffers a downgrade, the potential default of any rating agency requirements in the underlying documents.
So what do back-up servicers actually do?
- Cold appointment: a cold appointment of a back-up servicer is the most common type of appointment. It is generally used where the risk of the existing servicer defaulting under the terms of its servicing agreement is considered to be minimal and the parties do not expect that the servicing will need to be transferred. Underlying asset level data is stored by the back-up servicer and uploaded to the back-up servicer’s IT systems periodically but the assets and their performance are not usually monitored continuously.
- Warm appointment: a warm appointment is an increased operational standard of readiness to take over the existing servicer function. The appointment terms vary between back-up servicing contracts but under this type of appointment a back-up servicer is in a better position to transition into the role of servicer on reasonably short notice. This may involve the back-up servicer monitoring the underlying assets on a periodic basis and reporting back to the appointing party.
- Hot appointment: where there is an imminent or perceived higher risk of a disruption to the servicing capabilities of the existing servicer, the back-up servicer may be appointed to be able to service the underlying assets on very short notice (usually a week or so) and to the standard required of the existing servicer.
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