Government tries to protect bad borrowers from themselves
Yesterday, Fed Chairman Ben Bernanke announced proposed rules to help protect consumers getting mortgages. The general theory seems to be that the subprime mortgage mess was created because mortgage companies scammed borrowers. I do believe that happened in some cases, but the 1% home mortgage default rate we currently have is more likely mostly due to irresponsible borrowers.
So in an effort to protect people from themselves and make sure they don't find a way to buy houses they can't really afford, we can welcome in more government regulations. Because borrowers lied about their incomes, the lenders will be required to verify income. The lenders will have to force homeowners to escrow money for taxes and insurance, and they will also have to determine if the borrower can actually afford to pay the mortgage.