“Skin in the game.  Most mortgage bankers, especially those who have experienced a loan buyback, feel like they have some.  If Senate bill S3217, Restoring American Financial Stability Act, is passed in its current form mortgage bankers will learn what “skin in the game means to the current Administration.  This bill calls for mortgage bankers to retain the risk on 5% of the loans they originate.  The language in the bill is not clear, but some have suggested that retaining risk means funding a reserve with cash.  Lets do some math.  If a mortgage company is really efficient, it might earn 1% on the loans it originates and sells.  If they are required to hold 5% as a risk reserve, it will not take long for mortgage bankers to originate themselves into bankruptcy.  Who would participate in this business? Glen Corso, Managing Director of Community Mortgage Banking Project, joined the show today to discuss his efforts to lobby the Senate to add an amendment to the “skin in the game provision of S3217.  The amendment would exclude “well underwritten loans from the risk retention requirement.  Think Ginnie, Fannie, or Freddie loans.  They cannot be defined that way because we may [...]