[Lancaster Online]

[Subsonix]

What is this, but government trying to save you from yourself?

Sure, you might be predisposed to taking out a risky loan. You might be foolish enough to get a balloon mortgage. You might foolishly be staking the farm (or the split level) on the delusion that home prices are only going to rise rise rise, and thus you’re going to be able to sell the home at a significant profit. Maybe you are engaging in fiscally reckless behavior.

You're missing the point, Gil. When banks aren't backstopped and insured every which way, when they have to eat their own losses, they make damned sure you're capable of paying them back. They want(ed) documented income, actually considered backend ratios, etc because they knew if you couldn't pay, nobody would be propping them up. Government wouldn't have to mandate these regulations because banks would feel the pain of their own stupidity.