Some Bankers Never Learn and it's about the (new, not-so-improved) rise of risky low-down loans. Title and above should link. Ms. Morgenson talks about the Dodd-Frank bill and what it would mean to the mortgage market. My favorite quote: "Basically, Wall Street would have to eat a bit of its own cooking." The columnist comes out squarely on the side of requiring all mortgage loans to have 20% down.
Although it sounds great in theory, and I love Morgenson to pieces, I need to differ with her on this. Where are people supposed to get that 20%? Considering the economic client of the last few years, how would it be possible for any middle-class person to have saved that much unless they happen to be employed in a very few select industries? Or have tapped the Bank of Mom and Dad? Yes, zero-down loans are risky -- but can't we compromise and go with 5% down loans? Unless we want to see our markets tank again?
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