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20 percent down? Don’t bet on it
Proposed requirements for down payments could further harm the housing market -- if they ever see the light of day
From the October issue: Remember the proposed requirement from six federal agencies that homebuyers make minimum 20 percent down payments if they want the lowest interest rates?
Remember the controversy that erupted over the plan last spring, when labor unions joined with bankers, civil rights groups, mortgage companies, realty agents and consumer advocates to get it changed? A bipartisan group of 39 senators and more than 250 Democrats and Republicans in the House even signed letters demanding that the agencies ditch the proposal on the grounds that it would be deeply harmful to a housing market mired in deep trouble.
Half a year has passed since all that bubbled up, so here’s an update on the issue: The 20 percent proposal is still alive, but it’s temporarily bogged down in agency reviews of the roughly 12,000 comments filed by interest groups and individuals. [more]