FASB Proposed New Mortgage Servicing Accounting Rules

Homeowners should understand that proposed updates to mortgage servicing rights accounting aim to improve financial transparency.

Updated on Sept. 23, 2026 in Residential

Isometric editorial illustration of a brass key placed on a concrete block, representing the valuation of mortgage servicing rights. — The Financial Accounting Standards Board has proposed new accounting rules to standardize how entities measure residential mortgage servicing rights for greater financial transparency. 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 regarding how entities measure residential mortgage servicing rights. This change aims to standardize how firms account for recapture value when valuing these assets.

Why it matters

Current accounting guidance has led to inconsistent practices among firms, potentially obscuring the true market value of mortgage servicing rights. Aligning these measurements with real-world market pricing should improve consistency across the industry.

The proposed amendments mandate that entities include recapture effects when measuring residential mortgage servicing rights under Subtopic 860-50. These valuations must now align with Topic 820 Fair Value Measurement standards.

The players

Financial Accounting Standards Board

An independent, private-sector, not-for-profit organization that establishes financial accounting and reporting standards for public and private companies and not-for-profit organizations.

The details

Under current rules, there is no explicit instruction regarding the inclusion of recapture value, leading to diverse reporting methods. The new proposal requires entities to incorporate these effects to ensure the accounting reflects how market participants actually price these servicing contracts. By applying Topic 820, firms must account for all rights and obligations in a mortgage servicing contract to achieve greater transparency.

September 23, 2026: FASB issued the proposed Accounting Standards Update.
November 9, 2026: Deadline for stakeholders to submit public comments.

The Home Front

This proposal marks an effort to tighten financial reporting standards within the housing finance sector by aligning accounting methods with market realities. It follows a pattern of regulatory updates aimed at improving consistency in the valuation of complex mortgage-related assets.

While these accounting updates primarily affect institutional reporting, homeowners should monitor how their mortgage servicers communicate changes in service quality or loan management. Keep all official correspondence regarding your mortgage servicing entity in your household records to stay informed.

The takeaway

These accounting updates aim to bring greater transparency and uniformity to how firms value the rights associated with servicing residential mortgages. Readers should continue to track any changes in their mortgage statements, as accounting shifts at the institutional level can influence market behavior.

What happens next

Stakeholders and interested parties have until November 9, 2026, to provide public comments regarding these proposed accounting changes to the Financial Accounting Standards Board.