Financial Reform Bill Gives Nod to Simple Loans
Under the proposed financial reform compromise bill, a mortgage lender would have to keep 5 percent of each mortgage when it is securitized, unless the mortgage is a plain vanilla type of loan that the government dubs a “qualified residential mortgage.”
Analysts believe that such an incentive is means that the mortgages available to most borrowers will come from conventional institutions like banks. If more exotic loans are available, they will be offered by private lenders that charge significant fees to take these risks.
Source: Bankrate.com, Holden Lewis (06/29/2010)
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