There may be an even bigger risk. Loan income comes in many parts, primarily origination, servicing, and investment. The originating lender keeps the origination income and may also keep or sell the servicing income. The servicing lender is usually required to make the P&I payment to the entity that purchased the investment portion even if the servicing lender does not receive the payment from the borrower. This is a cost that can add up very quickly as defaults rise.
