OCC Issues Revised Mortgage Banking Booklet

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The Office of the Comptroller of the Currency (the “OCC”) issued an update to its Mortgage Banking booklet of the Comptroller’s Handbook, which was last updated in March 1996.  The Mortgage Banking booklet generally provides guidance for bank examiners and bankers regarding mortgage banking activities.  The updated Mortgage Banking booklet, among other things, addresses recent amendments to Regulation X and Regulation Z issued by the Consumer Financial Protection Bureau (the “CFPB”) that became effective in January 2014.  According to the OCC, the CFPB’s rulemaking is ongoing and bankers should ensure the standards they follow are current.  The Mortgage Banking booklet also makes changes to mortgage servicing rights to “incorporate recent lessons learned and regulatory changes.”  The OCC noted that strong oversight programs are required where critical business processes and technology are outsourced and warned that there will be increased costs associated with mortgage servicing rights because of the need for services to have “more robust” foreclosure policies and procedures, staffing, management of third-party service providers, and compliance with law, among other things.

As a result of the update to the Mortgage Banking booklet, the OCC rescinded or replaced: its March 1996 issue and the March 1998 examination procedures, Section 750 of the November 2008 OTS Examination Handbook, and OCC Bulletin 2011-29, Foreclosure Management: Supervisory Guidance.

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