NetLoan - Fee Allocation Between Owners on a Servicer Loan
Overview
On a servicer type loan, the borrower pays fees to the servicer, but the servicer rarely keeps all of that money. Fee allocation determines how much of each one-time fee passes through to the loan's owners and how much the servicer retains, then drives the distribution bills and journal entries that settle it. Servicing operations users, implementers, and controllers all touch this feature at different points. This article explains how the split is calculated and routes you to the right article for setting payment type defaults or working with the fees already assessed on a loan.
Prerequisites
- The loan must use the Servicer entity type. Fee allocation is not available on lender or borrower loans.
- Ownership must be set up on the loan. Owner percentages come from active Investor Ownership records.
- Fee allocation applies to one-time fee payment types only. Recurring payments are excluded.
- Individual prerequisites vary by task - see each article below.
Use Cases
Configure the defaults that split new fees
Set the percentage of any fee that passes through to owners on each fee payment type, before fees are assessed. This is implementation-time configuration: you set it once per fee payment type, and every fee of that type assessed afterward inherits it.
NetLoan - Configure Fee Allocation Defaults for a Servicer Loan
Review, approve, and override the fees assessed on a loan
Open the allocation page for a servicer loan to see every one-time fee assessed on it, adjust how much of each goes to owners versus the servicer, and move the allocations to Approved so they are picked up for billing. From the same page you can drill into an individual fee and change how the owners' share divides among them - useful when one owner should absorb more than their normal share of a specific fee.
NetLoan - Review and Override Fee Allocations on a Servicer Loan
Considerations
The split happens in two stages. First, the fee divides between the owners as a group and the servicer. The Percentage of Fees Allocated to Owners on the fee sets the owners' portion; whatever is left over is retained by the servicer. Second, the owners' portion divides among the individual owners, defaulting to each owner's Principal Ownership % from their Investor Ownership record as of the fee's effective date.
Defaults cascade, and the most specific value wins. The Override Owner Allocation % on the fee payment type sets the baseline for every fee of that type. An override entered on an individual fee wins over that baseline, and applies only to that fee. Allocations are created automatically when a fee is added to a loan or an existing fee is updated - you never create them by hand.
The borrower never sees the split. The gross fee is billed to the borrower and stays visible on the schedule line exactly as assessed. Allocation happens entirely behind the scenes.
Status controls what bills are generated. Allocations move through Pending Approval → Approved → Billed. Only fees in Approved status are picked up for bill generation, so a fee left in Pending Approval will not bill. Once a fee reaches Billed, its allocation is locked and cannot be edited. The status a new fee starts in is configurable per payment type, so accounts that don't need a review step can default straight to Approved.
Downstream, the money moves two ways. Owners are paid their allocated share through distribution bills, using the Fee Distribution Item configured on the payment type. The servicer's retained portion posts as a journal entry credited to the Servicer Income Account on the payment type.
Owners are entities, not investor pools. An owner is another subsidiary or a third-party institution. Distributions are strictly pro-rata by percentage - NetLoan does not support preferential order, seniority, or payment waterfalls. Intercompany structures and a handful of institutional owners fit this model; structured or tranched funds do not.
