We’re still struggling to recover from the worst economic downturn since the Great Depression and what have policy makers learned? Absolutely nothing. Nada, zip, zilch, zero.
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.
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.
I really shouldn’t be surprised, but I am. I suppose I haven’t learned anything either.
“If you were going to tell people in low-income and moderate-income communities and communities of color there was a housing recovery, they would look at you as if you had two heads,” said John Taylor, president of the National Community Reinvestment Coalition, a nonprofit housing organization. “It is very difficult for people of low and moderate incomes to refinance or buy homes.”
Ah, so now we have the real reason. We have to make sure that blacks and Hispanics get to live the American dream. That’s a noble idea, but not when it doesn’t make economic sense and not when they were the ones originally tricked into the subprime loans they couldn’t afford that kicked this entire ordeal off.
Home ownership correlates with a host of positive outcomes for the home owner, but the arrow of correlation might not point from home to betterment but the other way around.