“For mortgages, I’d actually like to see the GSEs scale back to an 80% guarantee up to $417,000. If a lender wanted to take the risk on that last 20%, they would be free to do so. However, most likely, this would force lenders to go back to requiring 20% down and we would quickly see the home-buying market go back to normal.”

Isn’t this the way banks are headed? I mean back to the 20% down concept. I haven’t heard anything corroborating what I hope happens, but it seems like the logical thing to do. Practicing this concept may be the only way to assure investors that they are making a good investment in the mortgage bundles.