Congress mulls 5% minimum down payments

A proposed amendment to the Senate’s financial reform bill would require mortgage originators to set minimum down payments of 5 percent and ramp up documentation standards for lending in the secondary mortgage market, according to the Wall Street Journal. While the down payment rule would not apply to government agencies like the Federal Housing Administration, the National Association of Realtors has expressed its disapproval of the measure, arguing that private lenders have already sufficiently tightened their lending standards. The amendment, which was proposed by Republican Sen. Bob Corker, of Tennessee, would also do away with the risk retention rules that require banks to keep a portion of the mortgage securities on their balance sheet, a provision the White House has strongly supported. [WSJ]