Federal Housing Finance Agency issues advisory on mortgage servicing rights

The Federal Housing Finance Agency last week released an advisory on the valuation of mortgage servicing rights for managing counterparty credit risk.

The notice is intended to communicate FHFA’s supervisory expectations for Fannie Mae and Freddie Mac “to establish and implement risk management policies and procedures for monitoring and valuing seller/servicers’ mortgage servicing rights.”

This bulletin only applies to MSRs for single-family mortgage loans and is effective April 1.