Introduction to Mortgage Servicing Training - March 2024

Internal Use Only

Corporate Governance

 Covered Institutions should receive an external audit, including financial statements, conducted by an independent public accountant annually.  The external audit shall include at a minimum: o Annual financial statements prepared in accordance with GAAP. o Assessment of the internal control structure. o Computation of tangible net worth. o Validation of MSR valuation and reserve methodology, if applicable. o Verification of adequate fidelity and errors and omissions (E&O) insurance. o Testing of controls related to risk management activities, including compliance and stress testing, where applicable.

External Audits

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Internal Use Only

Corporate Governance

Risk Assessment

Servicers must establish a risk management program under the oversight of the board of directors that identifies, measures, monitors, and controls risk sufficient for the level of sophistication of the servicer.

A risk assessment must be conducted by a company on an annual basis concluding with a formal report to the board of directors.

Evidence of risk management activities throughout the year must be maintained and made part of the report, including findings of issues and the response to address those findings.

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