This is expected to increase assets under management by an estimated 4.1% while at the same time raising servicing fees by as much as 5%.

FORBES: BNY Mellon Still Worth $26 Despite Tough Quarter

At least one lender, Wells Fargo, is giving borrowers a break on origination and monthly servicing fees for adjustable-rate reverse mortgages, which allow homeowners to tap their home equity as they need it.

WSJ: Reverse Mortgages Now Look Cheaper

Although the banks have been raking in loan-arrangement fees, Edward Najarian, an analyst at Merrill Lynch, thinks that these have been partially offset by the loss of servicing fees on the older loans.

ECONOMIST: Hard times have been good to America's smaller banks

He will try to offset the higher costs of servicing sour loans by boosting fees to homeowners and banks.

FORBES: Magazine Article

They were paid a fee for selling the mortgage on, and another fee for servicing (collecting the loan payments), and even got additional fees if they had to foreclose.

BBC: Carnage on Wall Street as loans go bad

Non interest income (aka, fees) fell 11% from a year ago, driven by lower servicing income (down 64%), lower deposit account service charges (down 7%), and lower proceeds from loan and asset sales.

FORBES: Despite Rebound from '09 Losses, Bank Profits Still Hampered by Crisis