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.
Obama pledged in his State of the Union address
to do more to make sure more Americans can enjoy the benefits of the
housing recovery, but critics say encouraging banks to lend as broadly
as the administration hopes will sow the seeds of another housing
disaster and endanger taxpayer dollars.
“If that were to come to
pass, that would open the floodgates to highly excessive risk and would
send us right back on the same path we were just trying to recover
from,” said Ed Pinto, a resident fellow at the American Enterprise Institute and former top executive at mortgage giant Fannie Mae.
Full story at WaPo