Obama Administration Pushing Banks to Make Higher-Risk Loans
With the housing-bubble crash and the financial crisis of 2008 apparently a distant memory, the Obama administration is pushing banks to make more home loans available to people with weak 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.
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.
In 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.
No amount of sanity in any of our institutions will be tolerated by this Regime.
The FHA used to work well, noted Ed Morrissey at Hot Air, "before the Obama administration turned into Little Fannie."
In November, FHA reported that its capitalization had turned negative — in other words, it had become insolvent. The Washington Post reported then that its stated position actually underestimated the danger for the FHA. The push for FHA to become Little Fannie has put it in the same exact position as the other, failed GSEs. In fact, FHA will likely require a bailout of its own.
Exit question: If Obama was an enemy saboteur, trying to do everything possible to wreck America's economy, what would he be doing differently?