Nonbank Mortgage Servicer Prudential Standards

As nonbank servicers became responsible for a larger share of consumer mortgages after the financial crisis, state regulators grew concerned about the absence of a common set of state standards addressing servicers' capital and liquidity requirements. State examinations of nonbank servicers also identified inadequate corporate governance and board oversight.

These concerns led state regulators to pursue - and subsequently approve - new standards that will require nonbank mortgage servicers to maintain the financial capacity, governance, and risk management practices to adequately serve consumers and investors and simultaneously enhance market stability.

The requirements contained in the standards are only effective through state implementation. State agencies may use the standards to formulate law, rule, guidance, or procedure under their individual jurisdictional authority or legislative process. The standards specify the importance of consistent adoption to regulate multistate entities and to minimize regulatory burden. To that end, CSBS is working with states to achieve consistent nationwide implementation.

Key highlights of the standards include: