Find out whether your subservicer is the right one, and what it should cost.
Subservicing is one of the largest costs and risks a lender outsources. Garrett, McAuley & Co. assesses your current arrangement, runs a managed RFP with the best-fit alternatives, and gives you a written recommendation. That recommendation may be to stay where you are on better terms.
- Advising lenders since
- 2003
- Mortgage companies served
- 600+
- Banks and thrifts served
- 120+
- Reviews a year
- 40 to 60
What the engagement covers
- Assess your current arrangement: true all-in cost reconciled to invoices, default and troubled-loan performance, escalation, reserves, and prefunding
- Screen the subservicer field to about five finalists using our subservicer client survey
- Run the RFP on a line-item pricing grid, with management presentations and independent reference checks
- Compare finalists side by side against your current subservicer on cost, service, default capability, technology, and financial condition
- Review the business terms of the proposed contract alongside your counsel
- Set up ongoing oversight built around Fannie Mae, Freddie Mac, and Ginnie Mae requirements
What the rules require
Fannie Mae, Freddie Mac, and Ginnie Mae each hold the servicer responsible for its subservicer's work. Each expects the servicer to oversee the subservicer, and Freddie Mac and Ginnie Mae must approve the arrangement in advance.
Fannie Mae Servicing Guide A2-1-07 (opens in a new tab); Freddie Mac Guide 8102.1 (opens in a new tab); Ginnie Mae MBS Guide Ch. 2 (opens in a new tab) and Ch. 4 (opens in a new tab)
These summaries are general information, not legal advice. See the cited rule for the full text.
How it works
- 1An assessment of your current arrangement, reconciled to your invoices.
- 2A screen of the subservicer field down to about five finalists.
- 3A managed RFP with line-item pricing, management presentations, and independent reference checks.
- 4A written recommendation, plus a review of the contract terms alongside your counsel.
Talk with us about what you need.
A 30-minute call is the fastest way to see whether we are a fit. No cost, no obligation.
What you receive
- A written recommendation with the key economics and contract terms
- A side-by-side comparison you can take to your board
- A decision point after each phase, so you can stop once you have your answer
Why Garrett, McAuley
- Neutral: you pay for the right answer, not for a switch
- Bidders send pricing directly to you
- Firsthand knowledge of how subservicers actually perform for their clients
Who you will work with
Joe Garrett
Co-Founder & Principal
Joe Garrett has worked in banking and mortgage banking since 1977, mostly in FDIC-insured and OCC-regulated banks. He served on the boards of four banking institutions and as Chairman and CEO of two of them.
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Michael D. McAuley
Co-Founder & Principal
Michael D. McAuley became a commercial banker in 1984, specializing in mortgage warehouse lending and commercial lending. He managed the warehouse lending business for Washington Mutual and JPMorgan Chase, and he has helped commercial banks set up, assess, and improve their warehouse lending operations.
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Steve Stone
Managing Director
Steve Stone has spent his career in independent mortgage banking, as an entrepreneur and as a senior operating executive. He founded and later sold an independent mortgage banking company, and he has managed loan production, servicing, secondary marketing, MSR strategy, and technology.
LinkedIn
Common questions
- Do we have to switch subservicers?
- No. An engagement can end with better terms from your current subservicer. You decide after each phase whether to continue.
- Is there a quick way to benchmark our subservicer first?
- Yes. The free Subservicer Health Check at pulse.garrettmcauley.com shows how your subservicer compares with what other lenders report.
- Do you help lenders get agency servicing approvals?
- Yes. We have helped lenders obtain Fannie Mae and Ginnie Mae approvals, along with selecting and overseeing a subservicer.
- Do subservicers pay you when you run an RFP?
- No. The lender engages and pays us, and bidders send their pricing directly to the lender.
- How long does a subservicer RFP take?
- Most engagements take a few months from assessment to recommendation. A servicing transfer, if you choose one, adds time after that.
- Can you help us bring servicing in-house instead?
- Yes. We compare subservicing with in-house servicing on cost, risk, and the staff and systems each option requires.