Only 20% of loans that Fannie Mae and Freddie Mac purchase would be deemed “qualified residential mortgages” and thus be exempt from the 5% risk-retention requirement of the Dodd-Frank Act, according to new research. A qualified residential mortgage is one for which the borrower puts down a 20% deposit on the property. Regulators, however, are considering a proposal to expand the definition to include a 10% down payment. In addition, both government-sponsored enterprises would be exempt from the requirement as long as they are in conservatorship, though efforts are under way to downsize or eliminate the lenders.

Click here to read the story from National Mortgage News.