The requirement from last year’s landmark financial services legislation that MBS issuers retain some of the risk associated with residential mortgages will raise the costs of securitizing them to prohibitive levels, discouraging the return of private capital and maintaining the market’s dependence on Fannie Mae and Freddie Mac, industry experts warn. The proposed definition of “qualified residential mortgages” under the terms of the Dodd-Frank Wall Street Reform and Consumer Protection Act was a major focus of concern raised during a webinar last week sponsored by Inside Mortgage Finance. “I think the big-picture news is that certainly the risk-retention regulations do what Dodd-Frank mandates that they do. But in some very important ways they go beyond that...