FDIC Backs 5% Risk Retention For Most Mortgages

Law360, New York (March 29, 2011, 3:32 PM EDT) -- Federal Deposit Insurance Corp. board members approved a joint proposed rule on Tuesday to make banks keep at least 5 percent of the vast majority of mortgage loans as “skin in the game.”

The joint proposed rule will only exempt from the 5 percent rule very traditional mortgages in which a home buyer has paid at least 20 percent of the property’s value as a down payment.

The joint proposed rule implements Section 941 of the Dodd-Frank Wall Street Reform and Consumer Protection Act, which aims...
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