“Because one subprime mortgage collapse is never enough.
True, but I think they over-corrected on this one.”
I agree. I am in the business and while I do not want to go back to the craziness of 2006, I do think that common sense has to come into play sometime. We way over-corrected and now the government runs the Mortgage industry with an iron fist.
For example, self-employed people are completely screwed. If you want to claim any business expense deductions against your income, you better think twice because now the only loans out there are for W-2 borrowers.
There is a place for stated income loans. They just got out of control when W-2 borrowers were allowed to use them. If we decide not to bring those back, even requiring a 20% down payment, the least we could do is allow for business bank statements to be used. Averaged out over a 12 month period.
As it stands now, mortgages are more expensive for the consumer and their options are much more limited than they used to be.