House-Senate Conference OKs Reform Package

Posted by Orb Staff on June 25, 2010 No Comments
Categories : Residential Mortgage

use-Senate Conference has settled its negotiations on financial reforms, sending the legislative package to each chamber for approval. In a deal struck last night, the conference eased the 5% risk-retention provisions pushed by House Democrats. Rep. Barney Frank, D-Mass., had been advocating a skin-in-the-game policy that exempted only Federal Housing Administration (FHA) loans. Community banks that sell mortgages into the secondary market had strongly lobbied against the measure, arguing successfully that standard, 30-year fixed-rate products should not require lenders to retain any credit risk. The bill that emerged from the conference exempts not only long-term, fixed-rate loans, but also mortgages that are backed by the FHA, the U.S. Department of Housing and Urban Development and the Department of Veterans Affairs, BusinessWeek reports. In a statement, Treasury Secretary Tim Geithner called the bill ‘strong’ and urged Congress to ‘carry the momentum forward and move swiftly toward final passage.’ ‘This is a tremendous day," Sen. Chris Dodd, D-Conn., said in a separate statement. "After great debate, we have produced a strong Wall Street reform bill that will fundamentally change the way our financial services sector is regulated." SOURCES: [link=http://treasury.gov/press/releases/tg760.htm]Treasury[/link], [link=http://banking.senate.gov/public/index.cfm?FuseAction=Newsroom.PressReleases&ContentRecord_id=6eb3db3b-a672-fc05-17a2-35abd1c333c9&Region_id=&Issue_id=]Senate Banking Committee[/link], [link=http://www.businessweek.com/news/2010-06-24/private-lenders-to-keep-5-percent-of-risk-under-new-u-s-rules.html]BusinessWeek

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