FASBs Emerging Issues Task Force is studying a request by the Mortgage Bankers Association to reconsider the accounting panels consensus position on what constitutes all risks and rewards and no significant unresolved contingencies when mortgage loan servicing rights are involved.
Timothy Lucas, FASBs research director, said the EITF took no action on the request during its Nov. 17 meeting but could discuss it in January.
The issue about unresolved contingencies has taken on increased meaning because the mortgage refinancing boom of 1992 and 1993 caused people to question the reliability of estimates for prepayment contingencies.
In September, EITF attempted to clarify questions about contingencies by reaching a consensus that any retention by the seller of risk attributable to uncertainties about mortgage servicing rights would preclude sales recognition until those uncertainties were resolved.
