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Joint Letter to Regulators Against High-Downpayment Requirements

March 16, 2011
Mortgage Lending
Research

CRL, the National Association of Realtors, the National Association of Homebuilders, and the Consumer Federation of America sent a joint letter to federal regulators, urging them to avoid arbitrary high down payment requirements on mortgage loans. We argue that this would make buying a home more costly, lock out many first-time homebuyers, and short-circuit a recovery of the housing market.

Instead, regulators should adopt standards for core underwriting factors to lower the risk of default. These include strong loan documentation, assessing a borrower's ability to repay, reasonable debt levels, and prohibitions on high-risk loan features.