There was a time when putting 20 percent down on a house was the accepted norm for most buyers, AJC reporter Christopher Quinn writes.
A proposal to move back toward that standard in the wake of the housing meltdown, however, has produced an odd-bedfellow coalition of Democrats and Republicans, consumer advocates and bankers who fear that would leave homebuyers unable to afford loans and sellers unable to find buyers, Quinn reports.
What do you think of the proposal?
It would split home loans into two categories, Quinn writes. One would be loans to buyers who put 20 percent down, and lenders would face few regulatory hurdles bundling those loans to sell as investment securities. It was the volume of subprime loans in such securities that helped precipitate the financial crisis.
The other loan category would allow smaller down payments, but would require lenders to maintain at least 5 percent of the total value of their loans so they shoulder part of the risk, Quinn reports. The intent is to ensure lenders thoroughly vet borrowers. Some believe this would cause higher interest rates and shut lower-income buyers out of the market.
Do you support or oppose this proposal? Why?
- Henry Unger, The Biz Beat
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