Mortgage lenders need to demand robust income documentation, full debt disclosure, and a significant downpayment from potential homebuyers to restart the housing market, according to Federal Deposit Insurance Corp. Chairman Sheila Bair. Talking to CNBC's Larry Kudlow Wednesday night, Bair said tighter controls could help the housing industry. "I think we can do a better job of having consistent, strong lending standards across the board for both bank and non-bank mortgage originators," Bair said. "It doesn't have to be complicated, really just make sure we document income…there's a bit of downpayment…that the borrower does have the capacity to repay if it's an adjustable-rate mortgage once the interest rate resets. Just some common sense standards that apply to everyone." Bair suggested the size of the downpayment a homebuyer submits is a clear indicator of the loan strength. "There's a strong correlation between the amount of skin in the game a borrow puts in up front and how that loan performs," she said. "If you put 20% down, you're committed to that house…you walk away from that house and you're going to lose a lot of the money you put in up front." A few weeks ago, Treasury Secretary Timothy Geithner announced the need for "fundamental change" in the federal handling of the reformation of Fannie Mae and Freddie Mac. Bair told CNBC that policymakers "are trying to balance the need for prudent underwriting with a need to support what is still a very distressed housing market." Write to Jason Philyaw.