Where was this rule when greedy banks sold them expensive mortgages ?
Uhm, the government encouraged much of the mortgage lending you're referring to. The loans themselves were artificially cheap. Unfortunately for borrowers, the houses were not.
Of course, the borrower gets screwed but who gives a shit about them. And if the housing market tanks the whole thing falls apart, but the market can only go up, up, up!
Out of all the "victims" in the housing collapse, MBS investors were arguably some of the more sympathetic. They were the true bag holders, overpaying (in the form of lower yields than was justified by actual risk) for lead that credit ratings agencies assured them was gold. Following the collapse, many any of them sued, alleging amongst other things, fraud.
On the list of "victims", many but certainly not all borrowers were less sympathetic characters. Some individuals had no problem lying about their income, and many others took out adjustable rate mortgages with the incorrect assumption that they'd be able to flip their homes at a profit or rent them out when their payments increased. It's hard to see these folks as anything other than willing participants in the game.
Maybe the answer isn't limiting the amount that can be invested but increasing oversight on the companies people are investing in. No one wants to be taken for a ride even though the risk is above average in this case.