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I think its the usual rethroic that is so common in politics. The new legislation restricts credit not expands it. The new consumer credit protectio mostly protects consumer by restricting credit by taking the decision out of hands of the borrower and bank more.
FTA: Under FHA terms, a borrower can get a home loan with a credit score as low as 500 or a down payment as small as 3.5 percent.
In light of recent history, how is this a good policy? I see a government bailout happening all over again.
America, the credit card nation.
Things don't necessarily need to revert to making outsized loans to folks with nothing more than a pulse. At present it is extremely tough to get a mortgage. From the article, "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."
No doubt this will be viewed along "party lines". And generate lots of rhetoric. But, there may be a prudent middle ground.
"Administration officials say they are looking only to allay unnecessary hesitation among banks and encourage safe lending to borrowers who have the financial wherewithal to pay"
"The administration’s efforts come in the midst of a housing market that has been surging for the past year but that has been delivering most of the benefits to established homeowners with high credit scores or to investors who have been behind a significant number of new purchases"
I think its the usual rethroic that is so common in politics. The new legislation restricts credit not expands it. The new consumer credit protectio mostly protects consumer by restricting credit by taking the decision out of hands of the borrower and bank more.
I hope you and shaker281 are right.
I have to say that this was one of the most disturbing news reports that I've read in a long time, also being reminded that we have nincompoops in government still making, or at least trying to shape, cockamamie social and economic policy, insisting on spreading this fallacy that housing and home ownership are a major source of wealth when they are, on the contrary, mostly a consumer liability.
Real economic wealth is the skills that nationally and globally competitive people bring to the market place, the people who add value to the real economy, not subsidies to slackers, pencil pushers, complainers and rogue banksters.
Obama's masters want to reinflate the housing market. Their plans to keep pumping funny money into the big banks is not working so they are attacking the problem from all angles possible.
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What, exactly, did Obama say that led to the conclusion that he "pushes banks to loan people with weak credit"? Show me the quote.
Did you read the article? How do you interpret "govco providing assurances to banks they will NOT face legal or financial recriminations if they make loans to RISKIER borrowers....?
That is encouraging lending bad behavior...here are some of the snippets from the article.
The 'obama administration' is where this originated...that means Obama.
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.
Housing officials are urging the Justice Department to provide assurances to banks, which have become increasingly cautious, that they will not face legal or financial recriminations if they make loans to riskier borrowers who meet government standards but later default.
Officials are also encouraging lenders to use more subjective judgment in determining whether to offer a loan and are seeking to make it easier for people who owe more than their properties are worth to refinance at today’s low interest rates, among other steps.
Great. More economic Houdini tricks from the pathetic hat of dear leader. Only in America is the free market designated public enemy number 1. If the government would only get out the way, perhaps downsize, quit taxing the snot out of everyone, rewarding bad behavior and laziness, and worry about serving it's original primary functions (and follow the damned constitution!)... Maybe, just maybe the free market could deliver some positive results for a change. Prosperity is not legislated, dictated, artificially inflated or created from the pen of any politician. It is EARNED. Of course, Obama was predesignated as the anointed one, so what does he know about earning anything...
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