Financial Services—Mortgage Banking

ASC 948 provides incremental industry guidance for mortgage banking, and its Overall subtopic (948-10) frames the two interrelated activities that define the industry: originating or purchasing mortgage loans for sale to permanent investors, and servicing those loans long-term (948-10-05-4). Scope covers mortgage banking entities and the mortgage banking operations of other entities such as commercial banks and thrifts, but not their normal lending activities, and excludes commitments to originate loans held for sale and derivative-accounted purchase/sale commitments under Topic 815 (948-10-15-2 through 15-4). The only substantive requirements in the Overall subtopic are disclosures about minimum net worth (capital) requirements imposed by secondary market investors or state regulators—describing the requirement, whether the entity complies (with required and actual amounts at each balance sheet date), and the possible material effects of noncompliance (948-10-50-3 through 50-5). The key idea: ASC 948 supplements, rather than replaces, other applicable GAAP (e.g., loan and commitment fees follow Subtopic 310-20).

Subtopics

1. 10Overall18 ¶

   ASC 948-10 is the Overall subtopic for mortgage banking, providing background on the two core mortgage banking activities—originating/purchasing loans for sale to permanent investors and subsequently servicing those loans—and defining the Topic's scope. Its only substantive requirements are disclosures about minimum net worth (capital) requirements imposed by secondary market investors and state regulators, including whether the entity complies and the effects of noncompliance. The Topic supplies only incremental industry guidance; entities must also apply all other applicable GAAP.

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