North Carolina Tightens Oversight of Mortgage Servicers with New Law
Raleigh,NC – North Carolina has enacted House Bill 762 (HB 762),introducing new licensing requirements and prudential standards for mortgage servicers operating within the state. The legislation, recently signed into law, aims to bolster financial stability and consumer protection within the mortgage servicing market.
HB 762 focuses on “covered” mortgage servicers – defined as those managing portfolios of 2,000 or more residential loans serviced for others. These servicers are now required to maintain sufficient capital and liquidity,alongside thorough written policies and procedures governing these standards. While the law doesn’t specify precise capital and liquidity levels, it offers a “safe harbor” for servicers meeting the eligibility requirements for enterprise single family seller/servicers established by the federal Housing Finance Agency (FHFA).
Beyond financial requirements, covered mortgage servicers must adhere to corporate governance standards.These include board oversight, both internal and external audits, the implementation of a risk management program, and annual risk management assessments.
The new North Carolina standards align with a growing national trend, as an increasing number of states enact or consider similar prudential standards for mortgage servicers.
HB 762 also includes provisions loosening restrictions on fees associated with small-dollar loans – those under $10,000 – secured by second or junior liens.
Companies involved in mortgage activity in North Carolina are advised to review the amendments and assess potential impacts,including the need for a mortgage servicer license,adjustments to capital and liquidity,or modifications to corporate governance structures.
