First time back since Sunday - busy week so far. Interesting discussion. I spoke my opinion earlier, so I'll just say a couple of things in hopes of not repeating myself.
First - nobody is going to come out of this unscathed, including taxpayers. And only the taxpayers are going to come out of this with no part of the blame.
Second:
I hope they get tougher. But I think you go overboard, at least on one thing - 20% down.
I bought my home with 5% down in 1998. Excellent credit, acceptable income, blah blah. But I wasn't ready to come up with 20%. Since then I've refinanced twice. Went from [6.125% 30 yr] to [5.75% 20 yr] to [5% 10 yr]. Each time I knew exactly what I could afford, and I plan to pay things off in Q1 2013.
None of this could have happened if I had to have 20% down. (Remember, no exceptions.)
Third, and I'm only thinking of this as I was typing in my rates, is what I think was the FIRST thing that started everybody down this slippery slope - variable rates. It's one thing to allow someone (like me) 5% down when their income history says they can make a flat monthly payment. But when you start scheduling balloon payments and expect the average Joe and Jane to plan for it? Insane.