An interagency rule that could discourage use of an innovative alternative to mortgage insurance appears headed for adoption.

The rule would require banks and thrifts to hold 8% capital reserves against the total loan amount of so-called 80-10-10 residential mortgages. In an 80-10-10 mortgage, the borrower puts 10% down, gets a first mortgage for 80% of the purchase price and a second mortgage for the remaining 10%.

Subscribe Now

Access to authoritative analysis and perspective and our data-driven report series.

14-Day Free Trial

No credit card required. Complete access to articles, breaking news and industry data.