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FASB proposes standardized MSR accounting to include recapture value
The proposal would amend GAAP to require mortgage servicers to incorporate recapture in fair value MSR measurement, aiming to improve comparability across servicers.
The Financial Accounting Standards Board issued a proposal that would require mortgage servicers to include the value of recapture when measuring residential mortgage servicing rights at fair value. HousingWire reports the update is designed to reduce differences in current accounting practice and improve comparability across servicers.
FASB said the change would amend GAAP by clarifying that all rights and obligations in a residential mortgage servicing contract must be reflected in the MSR valuation, including recapture. The proposal responds to feedback from stakeholders that current guidance does not clearly state whether recapture value should be included, contributing to inconsistent practices.
HousingWire also notes that analysts characterized the goal as increased transparency, while saying the change is unlikely to move MSR carrying values. The FASB proposal was issued on Wednesday.