Consumers may have to pay as much as 20% down for their mortgages to be exempt from risk-retention standards, according to media reports about the discussions among regulatory agencies.
The reports stated that the Federal Reserve, the FDIC and Office of the Comptroller of the Currency have tentatively agreed to define a qualified mortgage as one in which the consumer makes a 20% down payment.
In an effort to encourage financial institutions to be more careful about whom they lend money to, lawmakers included a provision differentiating between higher and lower quality mortgages in last year's financial overhaul bill. If a mortgage were deemed nonqualified, the lender would have to retain 5% ownership if it is sold on the secondary market.
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