WASHINGTON — Calling proposals that would require lenders to retain a portion of the loans they securitize "imprecise" and "indirect," Comptroller of the Currency John Dugan said Tuesday that policymakers should focus on tougher underwriting standards.
"Instead of going at the underwriting problem indirectly through 'skin in the game' requirements, why not attack it directly?" he asked during a speech to the American Securitization Forum. "If quality underwriting is the goal, then why not … establish minimum underwriting standards directly by regulation, at least for residential mortgages? Why not apply these standards to all mortgages, whether retained or securitized, so that there is an entirely level playing field?"