
Under pressure from real estate industry lobbyists, government regulators completely cave in and allow banks to underwrite bad loans with no risk retention. In what can only be described as a complete abdication of responsibility, government regulators will allow banks to underwrite no-money down loans without retaining the mandated 5% risk retention on their books. The last vestige of hope for a stable real estate market was set aside so lenders can make more money by putting unstable and unqualified borrowers into loans they shouldn't be given -- and taxpayers will likely pick up the tab when these loans go bad. The 5% risk retention provision is part of the Dodd-Frank financial reform bill. It's designed to force lenders to…[READ MORE]