Cost to Service Calculator

Learn what you’re really spending on servicing mortgage loans. Select the sample below that best fits your mortgage loan volume. See the calculations for the fixed and variable costs that make up cost to service – and keep in mind that these expenses will rise, while your servicing fees decline, over the life of each and every loan. To obtain your actual numbers please contact Jody Zersen at 800.229.5417 or email sales@midwestloanservices.com.

Cost to Service Example: 1 to 50 Loans

Portfolio Data
Loan Count
Number of Fixed Rate First Mortgages Serviced: 50
Total Number of Loans Serviced 50
Breakdown of Delinquent Loans:
Number of Loans Delinquent 30 Days through Pre-foreclosure 1
Total Number of Delinquent Loans 1
Cost to Service Calculation Summary
Total Staffing Expenses $83,250.00+
Staffing Expenses:
Base Salary of Servicing Staff: Base Salary % Allocated
Mortgage Manager $50,000 25% $12,500.00
Loan Administration Staff
(1.5 FTE @ $22,500)
$33,750 100% $33,750.00
Total Base Salary Expense $46,250.00
Fringe Benefits (% of Salary) 35% $16,187.50
Training and Development (% of Salary) 5% $2,312.50
Payroll Taxes – Estimate $18,500.00
Total Staffing Expenses $83,250.00
Total Occupancy Expenses $2,250.00+
Occupancy Expenses:
Number of FTE’s Assigned to Servicing 1.5
Square Footage per Employee (Including General Space) 150
Cost per Square Foot (Including Utilities) $10.00
Total Occupancy Expenses $2,250.00
Total Data Processing & FFE Expenses $1,700.00+
Data Processing & FFE Expenses:
Personal Computer Expense (FTE x $800) $800.00 $1,200.00
Copy Machine(s) Expense Including Depreciation $200.00
Furniture and Fixture Expense Including Depreciation $300.00
Total Data Processing & FFE Expenses $1,700.00
Total Loan Admin. & Other G&A Expenses and Indirect Expenses $375.00+
Loan Admin. & Other G&A Expenses and Indirect Expenses
Postage $100.00
Printing/ Statements/ Coupons/ Advertisements $100.00
Telephone $100.00
Office Supplies $50.00
Mortgage Servicing Annual Membership/Affiliation Costs $25.00
Total Loan Admin. & Other G&A Expenses and Indirect Expenses $375.00
Total Servicing Expenses $87,575.00
Annualized
Cost to Service
Total Servicing Expenses $87,575.00 =   $1,751.50circle
Total Number of Loans Serviced ÷ 50

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Cost to Service Comparison
Calculated Internal Cost to Service $1,751.50
Cost to Service Quote $84.00
Variance (+/-) Per Loan $1,667.50
Estimated Annual Impact Based on Portfolio Count $83,375.00

Cost to Service Example: 500 Loans

Portfolio Data
Loan Count
Number of Fixed Rate First Mortgages Serviced: 500
Total Number of Loans Serviced 500
Breakdown of Delinquent Loans:
Number of Loans Delinquent 30 Days through Pre-foreclosure 7
Total Number of Delinquent Loans 7
Cost to Service Calculation Summary
Total Staffing Expenses $211,000.00+
Staffing Expenses:
Base Salary of Servicing Staff: Base Salary % Allocated
Mortgage Manager $50,000 10% $5,000.00
Servicing Manager $50,000 25% $25,000.00
Loan Administration Staff
(4 FTE @ $22,500)
$90,000 100% $90,000.00
Total Base Salary Expense $120,000.00
Fringe Benefits (% of Salary) 35% $42,000.00
Training and Development (% of Salary) 5% $6,000.00
Payroll Taxes – Estimate $43,000.00
Total Staffing Expenses $211,000.00
Total Occupancy Expenses $7,500.00+
Occupancy Expenses:
Number of FTE’s Assigned to Servicing 5
Square Footage per Employee (Including General Space) 150
Cost per Square Foot (Including Utilities) $10.00
Total Occupancy Expenses $7,500.00
Total Data Processing & FFE Expenses $4,600.00+
Data Processing & FFE Expenses:
Personal Computer Expense (FTE x $800) $800.00 $4,000.00
Copy Machine(s) Expense Including Depreciation $200.00
Furniture and Fixture Expense Including Depreciation $400.00
Total Data Processing & FFE Expenses $4,600.00
Total Loan Admin. & Other G&A Expenses and Indirect Expenses $1,250.00+
Loan Admin. & Other G&A Expenses and Indirect Expenses
Postage $300.00
Printing/ Statements/ Coupons/ Advertisements $500.00
Telephone $250.00
Office Supplies $100.00
Default/Foreclosure Expenses $100.00
Total Loan Admin. & Other G&A Expenses and Indirect Expenses $1,250.00
Total Servicing Expenses $224,350.00
Annualized
Cost to Service
Total Servicing Expenses $224,350.00 =   $448.70circle
Total Number of Loans Serviced ÷ 500

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Cost to Service Comparison
Calculated Internal Cost to Service $448.70
Cost to Service Quote $84.00
Variance (+/-) Per Loan $364.70
Estimated Annual Impact Based on Portfolio Count $182,350.00

Cost to Service Example: 1000 Loans

Portfolio Data
Loan Count
Number of Fixed Rate First Mortgages Serviced: 1000
Total Number of Loans Serviced 1000
Breakdown of Delinquent Loans:
Number of Loans Delinquent 30 Days through Pre-foreclosure 15
Total Number of Delinquent Loans 15
Cost to Service Calculation Summary
Total Staffing Expenses $317,250.00+
Staffing Expenses:
Base Salary of Servicing Staff: Base Salary % Allocated
Mortgage Manager $50,000 10% $5,000.00
Servicing Manager $50,000 50% $25,000.00
Loan Administration Staff
(6.5 FTE @ $22,500)
$146,250 100% $146,250.00
Total Base Salary Expense $176,250.00
Fringe Benefits (% of Salary) 35% $61,687.50
Training and Development (% of Salary) 5% $8,812.50
Payroll Taxes – Estimate $70,500.00
Total Staffing Expenses $317,250.00
Total Occupancy Expenses $12,750.00+
Occupancy Expenses:
Number of FTE’s Assigned to Servicing 8.5
Square Footage per Employee (Including General Space) 150
Cost per Square Foot (Including Utilities) $10.00
Total Occupancy Expenses $12,750.00
Total Data Processing & FFE Expenses $7,400.00+
Data Processing & FFE Expenses:
Personal Computer Expense (FTE x $1,500) $800.00 $6,800.00
Copy Machine(s) Expense Including Depreciation $200.00
MaineFrame/AS400/Server Expense $0.00
Licensing Fee(s) $0.00
Furniture and Fixture Expense Including Depreciation $400.00
Total Data Processing & FFE Expenses $7,400.00
Total Loan Admin. & Other G&A Expenses and Indirect Expenses $2,500.00+
Loan Admin. & Other G&A Expenses and Indirect Expenses
Postage $600.00
Printing/ Statements/ Coupons/ Advertisements $1,000.00
Telephone $500.00
Office Supplies $200.00
Default/Foreclosure Expenses $200.00
Total Loan Admin. & Other G&A Expenses and Indirect Expenses $2500.00
Total Servicing Expenses $339,900.00
Annualized
Cost to Service
Total Servicing Expenses $339,900.00 =   $339.90circle
Total Number of Loans Serviced ÷ 1000

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Cost to Service Comparison
Calculated Internal Cost to Service $339.90
Cost to Service Quote $84.00
Variance (+/-) Per Loan $255.90
Estimated Annual Impact Based on Portfolio Count $255,900.00