Replies to post #461700 on Mr Cooper Group Inc fka COOP

[CBA09]

clawmann - servicing rights.

You are asking - When should there be a recognized accounting via a separate line item for servicing rights.

Commentary:
This is a area that is based on a few different conditions.

1) Financial assets contract must qualify as a true sales accounting treatment.

2) Servicing Rights fees are defined "Contractually Separate" from the Financial Assets Contract. Thus not bundled within the Financial Assets contract.

3) The fees for the Servicing meets a so called "more than adequate" compensation vs. the normal market rate.

If all the conditions above are meet then yes servicing rights qualify for separate accounting recognition based on the Net - fair value of servicing cash in-flows (fees ) vs. cash out flows (administration).