Penalizing Responsible Consumers
The government is hampering the housing recovery by placing additional risk-retention requirements on the banks/lenders.
The policy will prevent more employed middle-class citizens from becoming homeowners...they will be priced out of the market.
Federal regulators want to put pressure on the banks/lenders with regards to their foreclosure procedures...it's a little late.
Unfortunately the policy will deter homeownership.
“High down payment and equity requirements will not have a meaningful impact on default rates. But they will require millions of consumers, who are at low risk of default, to either put off buying a home or pay unnecessarily high rates," according to a statement from a coalition including the Mortgage Bankers Association and the National Association of Home Builders. "The government is penalizing responsible consumers, making homeownership more expensive or simply out of reach for millions. We urge regulators to develop a final rule that encourages good lending and borrowing without punishing credit-worthy consumers.” 
The Bottom Line:
There are many arguments on all sides with the new regulations implemented to safeguard the market in the future and heavy financial penalties to pay for the wrongs of the past, but as foreclosure activity begins to pick back up again combined with a weak housing market, the focus needs to be on the present and what exactly can be done to jumpstart home sales and encourage banks to initiate affordable loans to those who are qualified.
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