an entity contracted at the start of a securitisation to replace the servicer should the servicer no longer be willing or able to service the securitised assets. This is done sometimes if the investors and/or the rating agencies that are rating a securitisation are concerned about the strength of the servicer. If a servicer were to become insolvent or otherwise unable or unwilling to perform their contracted services in relation to the securitised assets, moneys owed by borrowers may not be collected or passed on down the waterfall causing a delay in investors receiving money owed under the securitisation and even loss. This problem can be alleviated by contracting with a back-up servicer who is paid a fee to stand-by in the eventuality of a servicer failure. The existence of a back-up servicer is not common though.
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