Servicer
Draft definition. Technical and editorial approval pending.
The party that administers receivables: collecting payments, communicating with obligors, handling delinquency and producing reports. The originator may perform this role or appoint another firm. Servicing duties, fees and replacement provisions are contractual and distinct from ownership of the assets. Confirm how payment application, reporting and operational responsibilities are divided.
In practice
In the fictional warehouse, 1% annually on USD 10m collateral creates USD 100,000 of servicing expense for the borrowing vehicle. When comparing financing structures, use a consistent boundary: an internal fee may cancel on consolidation, but the underlying cost of performing the work remains. Do not omit or double-count it.
Read this in context: Warehouse Worked Example.