FDIC Simplifies Coverage Rules for Mortgage Servicing Accounts

by Sabrina I. Pacifici on October 14, 2008

News release: “The FDIC Board of Directors today adopted an interim final rule, effective immediately, to simplify the deposit insurance rules for accounts held at FDIC-insured institutions by mortgage servicers…Under the interim rule [effective October 10, 2008], coverage will be provided to the lenders/investors, as a collective group, based on the cumulative amount of the borrowers’ payments of principal and interest into the account. Because servicers are able to identify borrowers more quickly than investors, the per-borrower coverage provided for under the interim rule would enable the FDIC to make deposit insurance determinations on mortgage servicing accounts more quickly and to pay deposit insurance more quickly. This insurance coverage afforded in connection with principal and interest payments in mortgage servicing accounts would not be aggregated with or otherwise affect the coverage provided to borrowers in connection with other accounts the borrowers might maintain at the same insured depository institution.”

  • Related postings on financial system
  • Previous post:

    Next post: