New Rule Pushing Big Down Payments Could Make Homeownership Unaffordable

The Huffington Post reports:

Among the most hotly contested ideas bank regulators have proposed to reduce the risk of another financial crisis is rule making a 20 percent down payment mandatory on some new home loans. Consumer advocates, civil rights groups and lending industry groups alike have said the proposed rule would deter many families from ever buying a home.

A new survey by the National Foundation for Credit Counseling could shed light on the actual effects of the proposal: The survey found that half of the 1,000 people contacted thought they would never be able to put together a 20 percent down payment to buy a home.

Friends don't encourage friends who can't come up with down payments to take on 50-to-1 leverage. Yet, many U.S. Senators think even 5-to-1 leverage isn't enough leverage for their favorite unqualified interest group.