Banks Push Home Buyers to Put Down More Cash
"A 2009 Federal Reserve Bank of St. Louis study concluded buyers who made smaller down payments were more likely to default during “unfavorable economic circumstances, such as a housing market slowdown or job loss.”"
Yes, but a decent underwriter would be able to take that into consideration.
A 10% downpayment is more reasonable.
But “forcing” a 20% downpayment is just silly.
Again, the government has no business directing a private business on how they should conduct themselves. The mortgage business worked just fine for a couple of hundred years.