FASB Proposed Change to Mortgage Servicing Rules

New accounting standards aim to standardize how companies measure the value of residential mortgage servicing rights.

Updated on Sept. 23, 2026 in Residential

Isometric editorial illustration of a wooden house block next to brass weights on stone, representing standardized mortgage valuation. — The Financial Accounting Standards Board has proposed an update requiring entities to include recapture effects when valuing residential mortgage servicing rights. AI Illustration. Upload story photo >

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Do you trust that current accounting standards accurately reflect the true value of home mortgage loans?

The Financial Accounting Standards Board has issued a proposed Accounting Standards Update that would require entities to include recapture effects when measuring residential mortgage servicing rights. This shift is intended to bring financial reporting into closer alignment with current market pricing practices.

Why it matters

Current accounting guidance has led to inconsistent practices and reduced comparability, as some firms have not explicitly included recapture value in their measurements. By mandating a uniform approach under Topic 820, the proposal aims to improve transparency and consistency for market participants.

The proposal affects all entities recognizing rights under Subtopic 860-50 and requires the application of Topic 820 Fair Value Measurement. The exact dollar-level impact on individual mortgage portfolios is not yet determined.

The players

Financial Accounting Standards Board

An independent organization that establishes accounting standards used by public and private companies in the United States.

The details

Under current rules, there is no explicit requirement to include recapture value when measuring residential mortgage servicing rights, leading to diversity in how firms report these assets. The new proposal would require entities to include these recapture effects, ensuring all rights and obligations associated with a servicing contract are valued consistently. This change forces firms to use the standardized fair value measurement framework established in Topic 820.

September 23, 2026: FASB issued the proposed Accounting Standards Update.
November 9, 2026: The deadline for stakeholders to provide public comments on the proposal.

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Money Landscape

This proposal sits within the broader cycle of regulatory efforts to harmonize financial reporting standards across the residential lending industry. It follows a period of inconsistent practices that have made it difficult for investors and stakeholders to compare mortgage servicing assets.

While this change applies to institutional accounting, it may eventually impact the transparency of the financial institutions that manage your mortgage. If you have questions about how these standards might affect your mortgage servicer, consult with a financial professional.

The takeaway

The move toward standardized reporting for mortgage servicing rights represents an effort to clarify the true market value of these assets. Keep an eye on how these accounting updates influence the financial transparency of the institutions that hold your residential debt.