Basel III banking rules complicate mortgage servicing

The Federal Reserve’s implementation of the new “Basel III” international banking standards impose stricter requirements for capital held against the risks of mortgage servicing, and that could mean that big mortgage lenders like Bank of America and Wells Fargo have to either sell off the rights to service many of the mortgages they originate, or keep the loans on their books, the Los Angeles Times reports. The American Bankers Association said implementation of the rules will “drive a wedge between mortgage borrowers and lenders.” Source: latimes.com.