Service Release Premium

From Wikipedia, the free encyclopedia

This article does not cite any references or sources. (December 2007) Please help improve this article by adding citations to reliable sources. Unverifiable material may be challenged and removed.

This article is orphaned as few or no other articles link to it. Please help introduce links in articles on related topics. (November 2007)

A Service Release Premium (SRP) is paid to banks when they sell a loan on the secondary market. Banks by law do not have to disclose the SRP to customers. In most cases banks my have an idea what the SRP is going to be but that is not always a sure thing. Markets change and where the bank may have purchased the loan for 6.3% hoping to sell the loan on the market for 4.3% giving them a fairly substantial profit in a volatile market the difference could be much less. In any case because the bank has no way of knowing what a specific loan will eventually sell for they could not with any reliability inform the client of the SRP.