Minnesota passed a bill imposing Net Worth requirements for large mortgage servicers licensed under the Minnesota Residential Mortgage Originator and Servicer Licensing Act. Under the bill, mortgage servicers that service (or subservice) at least 2,000 mortgage loans must maintain sufficient allowable assets for liquidity, in addition to the amounts required for servicing liquidity, to cover normal business operations. Mortgage servicers that meet the Federal Housing Finance Agency’s eligibility requirements for enterprise single-family seller/servicers with respect to minimum capital ratio, net worth and liquidity are deemed in compliance with this requirement (regardless of whether the mortgage servicer is approved for government-sponsored enterprise servicing). In addition, the bill requires mortgage servicers that service (or subservice) at least 2,000 mortgage loans to maintain a board of directors, annually procure an external audit, and establish a risk management program. The net worth and additional requirements do not apply to mortgage servicers that are an institution of the Farm Credit System, servicers solely owning or conducting reverse mortgage servicing, or the reverse mortgage portfolio administered by a servicer. The bill went into effect on August 1, 2023.
Click to view the Minnesota Senate Bill 2744: https://www.tenaco.com/wp-content/uploads/2023/08/MN-SB-2744-08-01-23.pdf
