Well, we have us a regulatory reform bill. Some factions of the mortgage banking industry were popping champagne this morning while others were moaning about a socialist takeover of the mortgage industry, one in which anything that isn't plain vanilla won't be funded at all. In some quarters Ayn Rand's name was being invoked. But let's get one thing clear: when it comes to MBS risk retention and the 5% rule, the key will be what exactly is a "qualified mortgage." On that score, we know that balloon payment loans and negative amortization are out. And quite a bit of it will be left up to regulators. In other words, the war is over, but there's still a lot to sort out....
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