Introduction to Mortgage Servicing Examinations Training - March 2023

CSBS Policy The Final Model Standards are established as CSBS policy and do not constitute law, regulation, official guidance or interpretation of any state agency that has not taken affirmative action to incorporate the standards as such. State regulators and state legislatures are responsible for determining the applicability of the Final Model Standards under their respective jurisdictions. CSBS encourages state regulators to consider the Final Model Standards as a model for statutory amendments where possible, as regulations where statutory authority already exists, or other adoption in situations where an agency possesses sufficient supervisory flexibility to address issues of elevated risk or potential consumer harm (e.g., guidance, interpretation, examination procedure).

Section-by-Section Analysis

General

The 2020 Proposed Standards were published in two main sections:

1) Baseline prudential standards applicable to all nonbank mortgage services. 2) Enhanced prudential standards and heightened supervisory expectations applicable to those servicers identified as complex servicers. The Final Model Standards convert the baseline prudential standards applicable to all nonbank mortgage servicers to model standards applicable to any nonbank mortgage servicer meeting the coverage requirements in Sec. 200 – Applicability – Exclusions (pg. 26).

Amendments and Eliminations from the Proposed Standards

The NDSC has made substantive amendments and eliminations from the Proposal to the Final Model Standards as discussed below.

The Proposed Standards included requirements for:

• Capital • Liquidity • Risk Management Standards • Data Standards • Data Protection, including Cyber Risk • Corporate Governance • Servicing Transfer Requirements

14 Proposed Prudential Standards for Nonbank Mortgage Servicers 2021