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Nonbank Mortgage Servicer Prudential Standards


The CSBS model state regulatory prudential standards for nonbank mortgage servicers establish common financial capacity, governance, and risk management requirements for nonbank mortgage servicers. To date, seven states have fully adopted the standards. Given the multistate operations of most mortgage firms, the standards already effectively apply to 98% of the nonbank mortgage market by loan count including, but not limited to, the 50 largest nonbank mortgage servicers.  

The CSBS Board of Directors approved the standards in July of 2021 to enhance and align states’ existing authority over the fast-growing area of nonbank mortgage servicing. Since then, seven states have fully adopted the standards, and two have adopted the standard’s financial condition requirements. Thirteen additional states are pursuing the standards in 2024.  

Prudential Standards for Nonbank Mortgage Servicers Adoption Status (Updated 4/12/2024)

About the 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:   

  • The standards focus on two main areas: financial condition, i.e., capital and liquidity, and corporate governance, i.e., board of directors, internal and external audits. 
  • The standards align with existing federal minimum eligibility requirements, wherever practical, to minimize regulatory burden for servicers.  
  • The standards apply to servicers that service at least 2,000 loans and operate in two or more states and cover both agency and non-agency servicing.  
  • The standards do not apply to:
    • small servicers that meet a de minimis cutoff
    • not-for-profit mortgage servicers
    • housing agencies 
  • The standards provide state regulators with flexibility to increase requirements for high-risk servicers or even suspend the requirements in times of economic, societal, or environmental volatility. 

CSBS released the standards for public comment on Oct. 1, 2020, receiving comments from 17 organizations, including several industry groups. CSBS considered all comments and made determinations on each issue, which is summarized in the final standards.


Archived public comments


American Bankers AssociationPDF
Alston & Bird PDF
Community Home Lenders AssociationWord
Credit SuissePDF
Freedom MortgagePDF
Housing Policy CouncilPDF
Independent Community Bankers of AmericaPDF
Manufactured Housing InstitutePDF
Mayer BrownPDF
Mayer BrownPDF
Mayer BrownPDF
Michel, NorbertWord
Mortgage Bankers AssociationPDF
National Consumer Law CenterPDF
Quicken LoansPDF
Union Home MortgagePDF
Urban InstitutePDF
Veterans UnitedPDF


Contact Information

Please submit comments to [email protected]