30%??? No, we went through a couple different lenders and they were all fine with 5%

I have run across a few blog posts lately that mentioned it, but finally found a news article today in the l.a. Times that mentioned 30% downpayment:

WASHINGTON -- Home buyers and refinancers who can't come up with sizable down payments and whose FICO credit scores are below 680 are about to get squeezed.

Giant investors Fannie Mae and Freddie Mac are imposing significant increases in fees for a broad range of borrowers who have lower than 30% down payments and formerly were treated as "prime" credit applicants. At the same time, the two largest private mortgage insurers -- MGIC Corp. and PMI Group -- are raising premiums on consumers who have low down payments and FICO scores in the mid- to upper-600s. The added costs for some buyers could mount to thousands of dollars either upfront at the closing or in the form of higher interest rates.

Here is a link that might be useful: Ouch! Fee hikes pinch borrowers who can't raise the bucks

I've read that a lot of lenders are not offering their best rates to anything that's not at least 10% down, I haven't come across 20% or even 30% yet. But my area isn't poised for a rapid drop, more like a gradual one. 10% plus regular payments should keep most borrowers in the black around here.

I could see that for a conforming loan 30% would be needed, but that's because of the house prices, not the credit conditions.

IMO it only makes sense to expect a borrower to have some considerable equity in the property. With none or little, and falling home prices, it's too easy for the borrower to become upside down in the mortgage and walk.

BTW, what IS the consequence of that for a borrower? How long does that stay on his credit record and how does it really affect him longterm?