How the Plan Aims To Safeguard A Risky Market

Tuesday, June 16, 2009

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.

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