Let the banks/lenders decide the terms of the loans...
does that make too much sense?
I know it takes power out of the hands of the central planners, so that’s why they oppose it,
but, it would let the market work, and those lenders who were either too tight or loose with their standards would suffer the market consequences of those policies.
The market stopped working the day that Henry Paulson went on his knees in front of Nancy Pelosi, begging for $800 billion so his buds wouldn't have to face the consequences of their imprudent decisions.
It has not been restarted since.
No, allowing the market to set the terms of loans makes perfect sense.
However... you and I, as taxpayers, should not be funding the buying of speculative mortgages written with absurd LTV’s through Fannie/Freddie/FHA/etc.
The regulation(s) should be set to require that loans to be purchased in the secondary market by Fannie/Freddie/FHA/etc require a 20% down payment. If a bank wants to write a note with a higher LTV ratio, then they can. They just can’t sell the note to the taxpayer-backed secondary market.