Obama administration pushes banks to make home loans to people with weaker credit

The Obama administration is engaged in a broad push to make more home loans available to people with weaker credit, an effort that officials say will help power the economic recovery but that skeptics say could open the door to the risky lending that caused the housing crash in the first place.

Well that didn't take too long

President Obama’s economic advisers and outside experts say the nation’s much-celebrated housing rebound is leaving too many people behind, including young people looking to buy their first homes and individuals with credit records weakened by the recession.

A rebound being fueled up by people with good credit paying CASH for distressed properties for what amounts to pennies on the dollar.

n response, administration officials say they are working to get banks to lend to a wider range of borrowers by taking advantage of taxpayer-backed programs — including those offered by the Federal Housing Administration — that insure home loans against default.

Tax payer backed on the front end, and the back end when those people default the financial crisis part deux

www.washingtonpost.com... aef-11e2-a941-a19bce7af755_story.html

They never learn.

Alternate link:

From here www.cleveland.com... click on the highlighted "Washington Post".

reply to post by neo96

Clinton did this in the 90's.. This is the man reason people are having their homes taken away now.

Didn't learn one single thing, did they? NOTHING learned...nothing at all. The whole Real Estate bubble and BANG was, at the core, about market fundamentals that could never be sustained. People in homes on 0 interest and/or 110% - 120% home mortgages on a variable rate to just destroy people who either couldn't read the terms or DID read them fine and just figured 'Oh well.. we'll deal with it then'. Oh well x's 10's of millions crashed us into a LONG recession, IMO. Depression by some people's thinking.

Now we're right back at it eh?

Insanity is doing the same thing repeatedly and expecting a different end result each time. Fail is Fail and if the market implosion didn't spell fail on letting people buy homes they can't afford or reasonably obligate to pay for the theoretical life of the loan? I don't know what would do it.

The Fed is STILL buying 10's of billions in BAD mortgage paper per month, as well as the junk that was derived from it. Thats part of that $85 billion a month.

But then... Obama never claimed to be an economist right? He was a Constitutional guy. Gave University classes on it and everything for a time. yikes..

Just a really bad idea. You might have a mortgage of $1400 but you need another $600 for town taxes, PMI, and home owners insurance every month. Never mind upkeep and town sewer and water 2x a year. Thats why banks now require you have money in the bank to show financial responsibility and discipline.

Oh.. something else just occurred to me. Are these idiots ever going to slow down..JUST A HAIR long enough to see the impact of ANYTHING they do?

They are marching out *HUGE* new policy initiatives as if the President just runs with whatever his staffers think up from their wish list and tell him the nation needs THIS week. There is a reason things are done slowly ...and it has to do with every solution often breaking one or two other things in the process.

When they are hitting the markets and nation with so much, in such a blur of dumb, they won't even be able to GUESS which program failed or failed worse than others. It's like upgrading every item in a computer AT THE SAME MOMENT and then flipping the power switch to see what doesn't work. Oh.. Yeah. Good luck there. Been there, done that and have the gray hair to prove it. They're doing it with 7-9 0's on the end.

reply to post by neo96
Whatever happened to the good old days when people had to attain a steady work history, a good credit rating and save up a substantial down payment while also providing a list of credible references and a clean criminal background in order to get financed for a home purchase? If we had stuck to those standards to begin with the so-called "housing bubble" never could have come about, much less "popped"!

I know that it would be wonderful if everybody could own their own home, but all pockets are not filled equally! I'm sorry, but someone making minimum wage cannot afford a "McMansion"- I don't care how many different ways you move the numbers around! If Obama doesn't know at least that much about the housing market what the hell is he doing in charge of our country? It's basic math for goodness sakes!

reply to post by littled16

Whatever happened to the good old days when people had to attain a steady work history, a good credit rating and save up a substantial down payment while also providing a list of credible references and a clean criminal background in order to get financed for a home purchase?

Those days have long since passed now its:

No credit
No Job
No money
No worries

Have They got a deal for them!!!

reply to post by TriForce


yup.

Reagan started the push to ease up lending restrictions and everyone after him pushed harder until Clinton came up with a means of making it so attractive to the banks that they found themselves needing to create all kinds of products to ensure they could lend to people who normally couldn't afford the loan payments. This is where all those crazy loans came from. Prior to clinton's changes, there were very few ARMs available but afterward, they became the loan of choice for people who couldn't afford traditional mortgages. This is also where things like pay as you go came from. In this gem of a loan, if you can't make a payment, the bank adds the amount to your principal. The end result is that people who borrowed, say $250,000, could skip payments and watch their balance grow. Think skipping credit card payments only a much grander scale.

Oddly enough, it was George Bush the younger who forsaw the doom cloud on the horizon. He actually brought up the potential crisis in both campaigns but, given that there were so many politicians who were benefitting from the eased up lending restrictions that getting anything accomplished was a long, uphill climb and then 9/11 happened and, well, you know the rest of the story.

Welcome to the beginning of housing bubble crisis 2.0! These idiots will never learn, until it's too late.

reply to post by neo96


Wait...didn't we go there ONCE already recently?

All the foreclosures, houses under water, short sales, squatters and what not? All the falling home values, ruined neighborhoods?
Shattered lives and ruined credit?


And know they want to do it again
More than madness :shk:

reply to post by littled16


These days, the guys making those loans wouldn't be qualified under the conditions you laid out in your first paragraph - much less the recipients of those loans. Predatory lending.

ganjoa

reply to post by TriForce


Yes, that and the repeal of Glass-Steagall,
of course those who instigated such would have you think
its still all a mystery .....

Anyone getting a loan other than a fixed rate needs to have their head examined... if it lowers you can refinance. Balloons, ARMs etc. are designed to be foreclosed on... how is anyone going to buy a house if all of them are occupied for 30 plus years, and few are selling? Variable rate loans keep turning people out so others can move in... and the people paying taxes should bail out banks that, loan to people dumb enough to get anything other than a fixed rate? Yay! Murica... padding the ground for idiots since at least 1950.

reply to post by neo96


America isn't destroyed enough for these brain-dead progtards!

They have to do something to prop up the entitlement bubble (which is about to burst) and the QE bubble (which is about to burst).

*Idiots!*

wait... this is a 2013 article??????

He's doing this again???????

Isn't this what caused the housing collapse ?

Here we go again.

This kind of rhetoric starts to make you think that they just want to finish off the job of crumbling everything completely since they didn't succeed the first time around.

Isn't the definition of insanity trying the same thing and expecting different results?
Someone needs to check his head.