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IPFS News Link • Housing

New Rule: Banks Exempt from New Mortgage Rules

03-29-2011 • GlobalEconomicAnalysis.blogspot.com

90% of loans are sold to Fannie and Freddie . Thus, 90% of loans will be exempt from the new rule. 90% seems like a high number and it is. However, why would banks accept any "skin-in-the-game" risk, when they can easily dump all the risk onto taxpayers via Fannie and Freddie? Clearly, the effect of the new rule and its exemption will put upward pressure on the already astronomical percentage of loans going to Fannie and Freddie. If the intent of this regulation is to get someone other Fannie and Freddie back in the mortgage business it will fail. If the intent of the regulation is to force more risk on banks, that will fail too.

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Reported By Jack Gregson

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