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FDIC Mulls Tougher Disclosure Requirements

The Federal Deposit Insurance Corp. is said to be considering new disclosure requirements for large banks that securitize mortgages, reports MarketWatch.

The Federal Deposit Insurance Corp. is said to be considering new disclosure requirements for large banks that securitize mortgages. Sources said the FDIC is taking aim at financial institutions that own both mortgage servicers and second-lien loans. It may require firms to notify mortgage investors what would happen to second-lien loans if first mortgages sour. Observers say the current situation creates conflicts of interest for banks when borrowers look to have their loans modified.

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