Democrats Reject 5% Down Payment Rule

IBD reports:

The Senate today rejected a proposal by Sen. Bob Corker, R-Tenn., to impose a minimum 5% down payment for virtually all home mortgages. The amendment to the broader financial regulatory overhaul bill, which failed 42-57, would have required income verification and an assessment of borrowers’ ability to repay as well.

Corker’s proposal also would have stripped out a provision that required financial firms securitizing loans to keep a 5% portfolio risk.

Democrats then passed their own amendment imposing some underwriting standards, but no minimum down payment.

Regarding Corker’s bill, Democrats argued that a 5% down payment would hurt minorities and the poor.

But if you can’t scrape together a 5% payment, maybe you should remain a renter.

That's right, the Democrats want it to be legal to have over 20 to one leverage. This is more leverage than Democratic patron George Soros' runs his hedge fund. In a free market, the market regulates risk better than any bureaucrat or politician because collateral is demanded. Next time you hear about a politician talk about regulation , remember this story.