Basel III Threatens Real Estate Financing in US, MBA Chief Says

The head of one of the largest mortgage trade groups in the US said proposed rules on bank capital levels have the potential to upend the nation’s entire system of financing real estate.

The proposal, known as Basel III Endgame, would force lenders to thicken the cushions they create to absorb unexpected losses. Regulators initiated the proposed international overhaul in response to the financial crisis of 2008. If approved, the rules would require big banks to increase their capital cushion by almost 20% to ensure they can survive another crunch.

The changes are “called the end-game proposal, but only one ...