A group of federal regulators will likely lower the proposed 20% down payment requirement for home-loan lenders who wish to avoid holding added credit risk on the securitization of mortgages.
The five federal regulators proposed the rule in March 2011 under the Dodd-Frank Act.
It requires a bank to maintain 5% of the credit risk for mortgages and other loans sold to the secondary market, also known as skin-in-the-game. The exception is the qualified residential mortgage, which requires at least a 20% down payment from the borrower among other standards, including a tightened debt-to-income ratio.
