Sell loan servicing rights

[Levi T.]

I was working with a broker for a personal loan on a 2nd home, and I noticed in the document they had plans to unload the service rights on the loan fairly fast, but that got me thinking about the business itself, and now I have a million questions!

I know brokers resell residential loans, but does anyone do that just as regularly for commercial loans? Who’s normally buying them?

What defines a commercial loan vs residential, at the loan formation level? 

Most commercial I know are amortized over a set number of years with a 5 year arm. What says it’s residential vs commercial loan?

Residential does not have the arm... but can a broker form a loan that is compliant with commercial loan regulations (if there is a thing) and not have an arm?

So could a broker for example form a 20-25 year commercial loan with no arm, and sell the service rights fairly easily on the marketplace?

For whatever reason this really percolates  my interest, and I would love to know as much as possible about loan formation and selling them as a business.