The next big problem is the lack of stated income loans that were part of the mortgage fabric for decades. What do you do for those who acted based on a rule, never had a problem or a late payment and now the rule is changed and they cannot participate?

One actual example should point out the problem. An independent businessman who became a financial broker, working from his house, found it impossible to refinance and lower his payment. His house appraised for $975,000, down from his last appraisal of over $1 million. He has a 780 credit score and over $500,000 in liquid assets. His loan was $399,000 and he simply wanted to lower his payment. Because he didn't show enough in taxable income he was declined. Was this really a risky loan? Are you convinced he couldn't make his payments?

Before you make up your mind lets look at what actually happened. Fannie Mae and Freddie Mac have an automated underwriting system (AUS) that would have approved him in a second up until they made a major change late last year. Evaluating his high credit score and low loan to value, plus large reserves, their only requirement would have been a CPA letter saying the borrower was self employed for over two years. When that changed thousands of self employed people were in trouble. It has been replaced with one year tax return that will allow up to the low 60% debt to income ratio. If you earn $15,000 gross a month you can have a monthly debt load of over $9000 a month and be accepted for a loan.

Better idea?

Are these new ways of operating a product of the hysteria whipped up by the media who prints first and discovers afterward? Should politicians who have left us in the largest financial mess we have seen in many decades dictate the rules that they don't understand? I believe the turnaround in real estate is being hampered by those who are here to help and won't be fullly underway until they are out of the way. What do you think?