Sources say new mortgage servicer rules an 'overreach'

By Jennifer Kang
12 Nov 2020

State regulators announced a set of ‘safety and soundness’ standards for non-bank mortgage servicers, which include higher capital and liquidity requirements. While the new rules are aimed at providing better protections during a stress event, sources argue that states are imposing too harsh a standard on the private, non-deposit taking institutions.

The Conference of State Bank Supervisors (CSBS) and the American Association of Residential Mortgage Regulators (AARMR) proposed a set of prudential regulatory standards in October to ensure that “strong consumer protections” are in place where nonbank mortgage servicers operate.

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