Everyone can argue all they want. If the buyer has any thoughts of walking, then putting as little down as possible is the best bet. There really is no argument. If the buyer never intends to walk or is not going to sell in a short period of time then a larger downpayment is better. There is no argument that a larger downpayment is better for all possible outcomes.

As for the moral hazard…. come on now, quit kidding yourselves, we lost that quite awhile ago. Don’t jump on this guy for following the rules.