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MBA warns regulators not to rush mortgage servicing standard

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In response to calls for regulators to form a national mortgage servicing standard, the Mortgage Bankers Association said attempting to do so under current risk-retention rulemaking would be "short-sighted." Under Dodd-Frank, regulators have been drafting new rules for how much risk mortgage originators will retain for loans sold through the secondary market. The MBA said it will support improvements to the servicing practices in the wake of the robo-signing scandal. The trade group is even hosting a summit in Washington for industry leaders to discuss ways to do so. Several of the largest servicers suspended foreclosures in October when employees were found to be signing foreclosure affidavits without a proper review, raising concerns among lawmakers and sparking investigations from the 50-state attorneys general and federal regulators. But in a letter to those regulators sent this week, John Courson, CEO of the MBA, said that the risk-retention rules are challenging enough without addressing servicing concerns. "We think it would be a mistake to add a second highly complex topic like national servicing standards into the same policymaking process," Courson wrote. Courson added that the policy implications of such a standard are still unclear, and urged lawmakers to work with them and other industry officials before "rushing forward." "Efforts to create a national servicing standard will be better served once a full discussion has been had involving all stakeholders and allowing adequate time for research, collaboration and comment," Courson wrote. Write to Jon Prior. Follow him on Twitter: @JonAPrior

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