Six regulators have issued new proposed rules that loosen previously proposed restrictions in the mortgage securities market. The new proposal addresses a Dodd-Frank requirement that issuers of mortgage-backed securities keep 5% of the credit risk on their books. However, exemptions have been carved out in this new proposal that essentially neuter the 5% retention rule. It now only applies to risky loan products such as those responsible for much of the chaos in the housing market in 2008.
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