If a US mortgage bank outsources their loans to a third party
subservicing provider, is the hand on of the loans liable to value
added tax?

There is no Value Added Tax in the US. It has been discussed by
political candidates as a possible substitute for the graduated income
tax, but has never been implemented. Significant opposition to it has
been voiced on a number of grounds. Some find it regressive. Others,
for instance, the National Governors' Association, feel that it would
damage state revenues.

National Governors' Association
http://www.nga.org/nga/legislativeUpdate/1,1169,C_POLICY_POSITION%5ED_486,00.html

"9.2 National Sales or Value-Added Tax

The nation's Governors oppose a national sales or transactional
value-added tax. Such taxes would intrude into a tax area that has
traditionally been reserved for and relied on by state and local
governments. If enacted, either of these taxes would seriously
threaten the ability of state and local governments to maintain their
tax base."


Securities issued by the federally chartered Federal National Mortgage
Association and Federal Home Loan Mortgage Corporation are tax exempt
(state and federal).


FEDERAL REGULATIONS
Section 2605.Servicing mortgage loans and adminstration of escrow
accounts
http://caselaw.lp.findlaw.com/casecode/uscodes/12/chapters/27/sections/section_2605.html

A Primer on the Secondary Mortgage Market
http://www.cityresearch.com/pres/smm.pdf

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hlabadie-ga

As far as I know there is no value added tax in the USA. Generally
federal income taxes are on the total business, so gains and losses on
individual lones is not computed for corporation taxes, but it is for
private lenders. Typically a loss occurs when you sell the mortgage to
a third party. If a gain occured it would be taxable.  Neil