Community financial institutions have expanded their share of the mortgage servicing market since 2008, even as new servicing rules and the Basel III capital treatment of mortgage service rights have made servicing home loans more expensive, according to a recent Government Accountability Office study. Since 2008, community banks’ share of the servicing market has doubled to 6.8 percent. Community banks’ persistence in the market comes in spite of significantly higher compliance costs and, for a few banks, a need to raise more capital. The GAO found that these costs are outweighed for community banks by the customer connection, fee revenue and cross-selling opportunities. GAO Report