Do mortgage loan servicers need stricter regulatory oversight?

White paper calls for operational, capital and liquidity requirements for loan servicers

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As a result of the 2008 financial crisis and the resulting increase in the number of delinquent mortgage loan borrowers, investors are calling for stricter operational, capital and liquidity requirements from the companies that service loans, according to a recent white paper jointly published by the Mortgage Bankers Association (MBA) and PricewaterhouseCoopers (PwC). The white paper, “The Changing Dynamics of the Mortgage Servicing Landscape,” describes the role that servicers play in the mortgage banking industry and provides a summary of the regulatory framework that applies to both bank and nonbank servicers. “In order for the mortgage servicing market to continue to function in an open, liquid and efficient fashion, prudential standards should be harmonized across regulatory entities to maintain consistency while reducing the cost of compliance, and restrictions on transfers should be limited to allow servicers the ability to adapt their portfolios to manage their ...