New rules spark down payment debate

The St. Louis Dispatch reports:

Can you come up with $36,000, cash?
If not, you may have a harder time buying a house before long, under new mortgage rules being debated in Washington.
As part of the Wall Street reform act passed by Congress last year, federal regulators are mulling policies that would echo back to a different time in housing and mortgages - a time when plunking down one-fifth of a home's price on closing day was common practice.
A down payment of 20 percent - or $36,000 on the average $180,000 home sold in St. Louis County last year - could again become the official gold standard for mortgages, one that carries lower interest rates for borrowers and more flexibility for lenders if the new proposal stands. But that's a big "if."
The mere idea of setting the bar at 20 percent has met with howls of opposition from the housing industry, fearful that a return to old-time lending could keep sales in the doldrums for years to come.

Just a reminder, many powerful interests think federal taxpayers should subsidize leverage of greater than 5-to-1 even though housing prices can go down more than 20% in a few short years.