What defines a small servicer in mortgage lending?

A small servicer in mortgage lending is defined as a servicer that manages 5,000 or fewer mortgage loans. This definition is particularly significant because it helps identify servicers that operate on a smaller scale and may be subject to different regulatory requirements compared to larger servicers. The classification aims to acknowledge the unique challenges and operational practices of smaller entities in the mortgage industry, potentially allowing them some leniency in compliance with certain regulations.

The threshold of 5,000 loans is an important metric that reflects the scale at which a servicer can operate efficiently while still providing a personal touch and maintaining strong relationships with borrowers. This definition does not pertain to the number of employees or the focus on low-income loans, but rather strictly to the volume of loans being serviced. Understanding this classification is essential for recognizing how servicers are regulated and the services they provide within the mortgage lending landscape.