High Risk Mortgage Lending Still Being Promoted By GSEs – By Bill Zielinski – Sufficient Income Key To Sound Home Ownership – … The problem is that some one forgot to tell Fannie Mae (FNM), Freddie Mac (FRE) and especially the FHA what HUD and the OCC have proposed as a safe debt ratio.  (See Why Does The FHA Approve Loans That Borrowers Cannot Afford.)   We now have the absurdity of lenders being required (at taxpayer expense) to modify mortgages to a 31% debt ratio while it is extremely common to see new mortgages being approved at debt ratios of  50% or higher. … – Mortgaged Future

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Many underwater homeowners are deliberately walking away from mortgages – By Kenneth R. Harney -  A study finds that 26% of the defaults across the country are calculated economic decisions to bail out of loans by borrowers who could afford to make the monthly payments. – LA Times

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Tight Mortgage Rules Exclude Even Good Risks - By DAVID STREITFELD – … “The credit pendulum is stuck at ‘stupid,’” said Lou S. Barnes, an owner of Boulder West Financial Services, a Colorado mortgage bank. “I am turning down loans every day that my grandfather in his Ponca City, Okla., savings and loan in 1935 would have been happy to make. And he was tough.” … – NY Times