How the Plan Aims To Safeguard A Risky Market
The Obama administration's blueprint for regulatory reform seeks to make the market for securitized loans safer with provisions that would require:
-- Lenders to retain at least 5 percent of the risk of losses on each asset-backed security;
-- Loan officers to be paid over time rather than up front, with penalties if a loan defaults;
-- Rating agencies to clarify risks to investors and to be more transparent about their methodology.