The shadow of a house key falls over a mortgage application form.
The shadow of a house key falls over a mortgage application form. - 
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STEVE CHIOTAKIS: The federal government is thinking of making it even harder for people to buy homes. Reports are this morning regulators may encourage banks to make fewer risky mortgages. And could encourage banks to require homeowners bring as much as 20 percent down to the process.

Marketplace's Nancy Marshall-Genzer is with us live from Washington with the latest on that story. Good morning Nancy.


CHIOTAKIS: Why would the government want homebuyers to shell out even more for a down payment?

GENZER: Since the housing crisis, we now know that banks don't keep most of their loans. They sell them to investors. The idea of this 20 percent rule is to force banks to have a little skin in the game. So, the Feds are saying to banks, look, if you make a riskier loan, like those with down payments of less than 20 percent, you can't sell the whole loan. But with a 20 percent down payment, banks could sell off the entire loan.

Guy Cecala publishes Inside Mortgage Finance. He says the idea is to stabilize the housing market.

GUY CECALA: They're going to put some standards in place now that'll mean a stronger housing market in 10 or 20 years but it'll certainly mean less Americans getting homes and less Americans getting mortgages.

CHIOTAKIS: Yeah I mean, fewer American getting mortgages -- what's that gonna look like?

GENZER: Cecala says low and even moderate income Americans could just be priced out of the housing market. There is a little good news, though. Cecala says as things stabilize, banks will start to feel more comfortable making loans with a 10 percent down payment. But that will take a few years.

CHIOTAKIS: Marketplace's Nancy Marshall-Genzer. Nancy thanks.

GENZER: You're welcome.