FDIC Proposes Exemption for Mortgage Securities

By: Associated Press
By: Associated Press

Regulators are proposing to exempt certain mortgages from rules that would force banks to take on more risk when they package and sell mortgage investments.

The Federal Deposit Insurance Corp. is voting Tuesday to advance the proposed exemption from rules required under the new financial regulatory law. Under the rules, banks must hold at least 5 percent of the mortgage securities on their books.

Banks would not have to have so-called "skin in the game" for mortgage securities that contain loans for which buyers made a 20 percent down payment.

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