Bair: 3% down payment mortgage comes with risk

A solution to lower student debt: Sheila Bair

Borrowers who only put 3 percent down on a new home could be taking a risk, former FDIC Chair Sheila Bair said Thursday.

Earlier in the day, Wells Fargo announced it is now offering fixed-rate conventional mortgages with a minimum 3 percent down payment.

"The good news is these are fixed-rate mortgages, so you don't have the problem with the payments shocks where you have to refinance to make the payment affordable," Bair said in an interview with CNBC's "Closing Bell."

However, "you're exposing yourself to risk if home prices take a dip."

Wells Fargo, the nation's largest mortgage lender, is targeting first-time home buyers and low- to moderate-income buyers who have been sidelined in the housing recovery. The bank is underwriting the borrowers and Fannie Mae is originating and selling the loans. Borrowers may take out a mortgage up to $417,000.

A Wells Fargo home mortgage office in San Francisco.
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Bair said it appears that Wells Fargo isn't taking much of a risk with its new program.

"Fannie Mae's got it. Private mortgage insurers got it. They're underwriting, but they're passing it along," she said.

"We saw during the crisis that when you separate the ... credit decision to make the loan from who is actually holding the risk of the loan, you can run into some problems too. I'm not completely comfortable with it, but it is what it is."

— CNBC's Diana Olick contributed to this report.