On Oct. 21 and 22, as required by the Dodd-Frank Act, the SEC and various federal banking and housing agencies adopted credit risk retention rules for securitizations. These rules, which were first proposed in 2011 and re-proposed in 2013, provide several methods of retaining the required 5 percent credit risk exposure, as well as limited exceptions for pools of assets that satisfy specified credit criteria. Among other things, the new rules provide an exemption for pools of “qualified residential mortgages” — a term that has the same meaning as “qualified mortgages” as defined by CFPB’s ability-to-repay rules.
Click here for more information and a link to our comprehensive guide to the credit risk retention rules.