Fed governor says rules on mortgages should compatible
WASHINGTON (Reuters) - A top Federal Reserve official said on Thursday that regulators should consider making a new mortgage rule that would provide an exemption to risk-retention requirements compatible with an existing rule.
At issue is making a definition of a qualified residential mortgage compatible with the definition for qualified mortgages that was made earlier this year by the Consumer Financial Protection Bureau.
Federal Reserve Governor Daniel Tarullo told lawmakers it was "definitely the case" that regulators should consider making the two rules congruent.
The Consumer Financial Protection Bureau, in defining qualified mortgages, said they would be considered to meet requirements that lenders verify borrowers can repay loans.
A group of regulators is now working on a definition of qualified residential mortgages, which would be exempt from "skin in the game" rules requiring mortgage originators to keep a portion of securitized loans on their books.