If I were in a position to lend, I would be more cautious now. The introduction of moral hazard has Changed the culture. More people now would be willing to ‘walk away’ than in the past.
I do believe that some ‘progressives’ orchestrated the effort to cause this financial crisis by encouraging bad behavior (charging up credit cards to the max with no intention to pay) after the Re-election of GW.
That’s my only conspiracy theory to date. I followed the DU posts on the topic after 2005, but can’t gage the total numbers.
“More people now would be willing to walk away than in the past.”
Thus the reason for significant down payments. Make it hurt to walk away. Bring down the loan-to-value ratio so the lender left holding the property (thru foreclosure) has a little leeway to resell the home without risk of loss...or as much loss if it had been a 3-5% (or ZERO%!!!) down payment.