FASB Proposed Updates to Mortgage Servicing Rights

The Financial Accounting Standards Board has introduced new guidance for measuring residential mortgage servicing rights.

Updated on Sept. 23, 2026 in Residential

Bold flat-color editorial illustration featuring a monolithic building form and a heavy geometric block, representing structured financial valuation. — The Financial Accounting Standards Board has proposed new guidance requiring entities to include recapture effects when valuing residential mortgage servicing rights. 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 (FASB) released a proposal on September 23, 2026, aimed at standardizing how residential mortgage servicing rights are measured. The update requires entities to incorporate recapture effects into their valuation process.

Why it matters

Current accounting guidance has led to inconsistent practices and limited comparability among market participants. By mandating the inclusion of recapture value, the proposal seeks to align financial reporting more closely with actual market pricing.

The proposed amendments require entities to apply Topic 820 Fair Value Measurement when valuing these rights. This standard applies to all entities recognizing residential mortgage servicing rights under Subtopic 860-50.

The players

Financial Accounting Standards Board

The Financial Accounting Standards Board is a private, non-profit organization that establishes the generally accepted accounting principles (GAAP) used by public and private companies in the United States.

The details

The proposed amendments clarify that recapture value must be included when measuring residential mortgage servicing rights, an area where current rules have been ambiguous. This change is intended to ensure that financial statements better reflect how market participants actually price these specific assets.

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

Culture Shift

The proposal aligns residential mortgage servicing valuation with the standardized rigor of Topic 820 Fair Value Measurement. By mandating the inclusion of recapture effects, the FASB aims to eliminate the diversity in practice that has historically hindered financial comparability.

While these accounting changes primarily affect financial reporting, they may lead to more consistent pricing and transparency for mortgage-backed securities. Investors and financial analysts should monitor these updates as they could refine the valuation of housing-related assets.

The takeaway

This regulatory update serves as a reminder of how accounting standards evolve to match real-world market behavior. Professionals in the housing finance sector should review the proposal to understand how their valuation models for servicing rights may need to be adjusted.