Obama Administration Pushes Banks to Make Home Loans to People with Weaker Credit
April 3rd, 2013Via: Washington Post:
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.
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.
Ahhh – I had wondered why suddenly the radio waves are saturated with ads for “Even if your mortgage is underwater or you’re in foreclosure, we can help you refinance your home!!”.
They actually come out and say that if you owe $300,000 on your house but it’s only worth $150,000, they can give you a refi.
So yeah – same shit, different day. Gee, I wonder if the outcome will be any different from the last time we tried it?