During a June 22nd press conference, a coalition of lawmakers and nearly 40 industry groups gathered to criticize a proposed mortgage reform rule. In a rare bipartisan display of unity, nearly 340 members of the House and Senate have pressured regulators to revise a proposed mortgage finance rule within the Dodd-Frank Act.

Dodd-Frank requires financial institutions to retain a portion of the risk when packaging mortgages into bonds for sale. Under a March proposed rule, firms would have to retain 5 percent of the risk on such asset-backed securities, in an effort to guard against the widespread creation and selling of risky securities that played a role in the financial crisis.

However, the risk retention requirement is waived for “qualified residential mortgages,” which, under the proposal are those where there has been a 20 percent down payment.

The proposed rules were initially scheduled to close for comment on June 10. But after much opposition from Congress and industry groups, regulators indicated the comment period would be extended until August.

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For additional information, members can contact Jason Boehlert at 703-558-0660 or jboehlert@mfghome.org.