U.S. Bank Regulators to Discuss 'Skin-in-the-Game' Lending Rules

August 21, 2013
mortgage lending news

On Aug. 28, the Federal Deposit Insurance Corp. (FDIC) will meet to discuss the credit risk retention rule, or the "skin-in-the-game" rule, under the Dodd-Frank law. The rule would require lenders to retain 5 percent of securitized mortgages on their books, with the exception of the most basic loans.

The initial rule dictated that loans with a down payment of 20 percent or more or that met other qualifying criteria would be exempted from the rule, but lenders warned that the strict requirement would block access to credit for first-time and lower-income home buyers. Sources believe the rule will be modified to offer exceptions for more loans; but the process involves not only the FDIC, but also the Federal Reserve, the Securities and Exchange Commission, the Federal Housing Finance Agency, the Office of the Comptroller of the Currency, and HUD.

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