Question

What is a Service Release Premium (SRP)?

A) A type of investment in the stock market.
B) A fee charged by banks for account maintenance.
C) A financial incentive offered to mortgage originators for selling a loan to a secondary market investor.
D) A government program providing subsidies for healthcare services.

Answer 1

A Service Release Premium (SRP) is a financial incentive offered to mortgage originators for selling a loan to a secondary market investor.

Step-by-step explanation:

A Service Release Premium (SRP) is a financial incentive offered to mortgage originators for selling a loan to a secondary market investor. When a mortgage is sold in the secondary market (such as to a government-sponsored enterprise), the mortgage originator can receive a SRP as a fee for the sale. This serves as an inducement for mortgage originators to sell loans to the secondary market, as it provides them with additional income.