Comment on the proposed Credit Risk Retention Rule

Shutterstock.com

Article Highlights

  • The Dodd-Frank Act was intended to restore sound underwriting practices.

    Tweet This

  • Enacted over 3 years ago, Dodd-Frank introduced 3 new factors into housing finance.

    Tweet This

Editor's Note: The following letter is a comment on the revised risk retention rule (part of the Dodd-Frank Act) proposed by six government agencies in August 2013. The proposal defines "qualified residential mortgage" (QRM), mortgages which would be exempt from risk retention requirements (i.e. the rule requiring sponsors of securitization transactions to retain risk in those transactions).

 

Dear Sirs and Madam:

The Dodd-Frank Act was intended to restore sound underwriting practices. Enacted over three years ago, it introduced three new factors into housing finance: (1) a high quality mortgage—called the Qualified Residential Mortgage (QRM)—that would have a minimal incidence of default; (2) a set of minimum mortgage standards called the Qualified Mortgage (QM); and (3) a requirement that the securitizer of any mortgage not a QRM retain at least 5 percent of the risk of any mortgage pool it sponsors. The terms of the QM were specified by the Consumer Financial Protection Bureau in January 2013, and the proposed terms of the QRM were specified in an August 28 release by the six agencies1 charged with responsibility to design the QRM.

Download the PDF to read the full comment.

Comment on the proposed Credit Risk Retention Rule by American Enterprise Institute

Also Visit
AEIdeas Blog The American Magazine
About the Author

 

Peter J.
Wallison

 

Alex J.
Pollock

 

Edward J.
Pinto

What's new on AEI

Retirement crisis is hyped
image Why the Foley beheading will force Obama to continue US airstrikes
image How the New York Times misguides their readers on Internet regulation
image US still has time to stake out a position of strength on Ukraine
AEI on Facebook
Events Calendar
  • 25
    MON
  • 26
    TUE
  • 27
    WED
  • 28
    THU
  • 29
    FRI
Wednesday, August 27, 2014 | 3:00 p.m. – 4:15 p.m.
Teacher quality 2.0: Toward a new era in education reform

Please join AEI for a conversation among several contributors to the new volume “Teacher Quality 2.0: Toward a New Era in Education Reform” (Harvard Education Press, 2014), edited by Frederick M. Hess and Michael Q. McShane. Panelists will discuss the intersection of teacher-quality policy and innovation, exploring roadblocks and possibilities.

No events scheduled this day.
No events scheduled this day.
No events scheduled this day.
No events scheduled this day.
No events scheduled this day.
No events scheduled today.
No events scheduled this day.