The difference is between what I must borrow at and what I can earn. GNMA II 1. These investors must receive payment on the 18th of the month. The money is removed from your bank account on the 18th. No service fees are collected on delinquent accounts.
Cash is received only if the accounts are current or have come current during the month.
The Loan administration cost is broken down into the important components. The cost to service a good loans is establish and the cost to service each Loan State us then determined. The model allows for intra monthly cash flows. This is a better assumption than assuming that all funds arrive at the beginning of the month. Discussion of Service fees when loans that are delinquent come current or payoff.