Strict Risk Retention Rule Imperils Recovery, Biz Group Says

Law360, New York (December 3, 2012, 4:00 PM EST) -- A leading business lobbying group said Monday that allowing only a narrow band of mortgages to be included in a rule exempting high-quality home loans from mortgage-backed security risk retention requirements could derail the slow economic recovery.

Business Roundtable's letter addressed federal regulators working on the risk retention rule and developing the so-called qualified residential mortgage standard that would determine which loans could bypass it. Existing proposals would prevent lenders from issuing mortgages that would be expensive to package into securities, the group said.

“An unnecessarily...
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