The nation's top financial regulators and four of its largest banks announced plans yesterday to expand a method for financing mortgages, called "covered bonds," in an effort to reinvigorate the frozen housing market.
Covered bonds are securities that a bank can sell to raise money for home loans.
In return, the bank receives monthly payments from homeowners and pays back the bonds.
Treasury Secretary Henry M. Paulson Jr. said the use of covered bonds should lead to better underwriting standards on Wall Street because banks would retain the risk of the bonds.
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