WASHINGTON — Two top Obama administration officials said Tuesday that the government-sponsored enterprises would not be exempted from a pending proposal to help standardize mortgages sold into the secondary market.
Department of Housing and Urban Development Secretary Shaun Donovan and Treasury Secretary Tim Geithner signaled that the GSEs would have to comply with a plan that forces lenders to retain 5% of the credit risk of loans they sell unless they qualify for a safe harbor that establishes strict underwriting standards. "Everything we've said in this discussion today about reform of the GSEs would suggest that we are very much in favor of ensuring that the GSEs are holding adequate capital against their commitments," Donovan told the Senate Banking Committee. "I actually do not think there are discussions about exemptions."
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