What is the maximum number of mortgage loans a small servicer may service?

The correct answer is that a small servicer may service a maximum of 5,000 mortgage loans. This threshold is set by federal regulation to define small servicers, which are generally characterized by certain operational flexibility and reduced regulatory burdens compared to larger servicers. The cap on the number of loans allows small servicers to maintain a manageable portfolio, enabling them to provide personalized service to borrowers while remaining compliant with federal regulations. This limit is significant because it helps delineate small servicers from larger entities that typically have more complex operational requirements and may be subject to stricter regulatory scrutiny. Understanding this limit is crucial for those in the industry to ensure that they are in compliance with their servicing practices and to avoid inadvertent classification as a larger servicer when they exceed the established limit.