WaPo; 'Obama administration pushes banks to make home loans to people with weaker credit'

Clearly, Obama learned absolutely nothing from the last time a president and Congress pressured banks to loan money who were poor credit risks … because he’s obviously bound and determined to repeat the same mistake:

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. …More here.

The end result of this futile exercise in wealth-redistribution is obvious … America’s taxpayers are about to take it on the chin … again, and they’ll have no one to blame this time but Barack Obama and his fellow Dems.

History shows that whenever the government gets involved in luring or encouraging banks into making loans to people they wouldn’t otherwise lend to, people who by definition have a lower probability of paying the loans back … banks and taxpayers alike always lose. That’s exactly how we got into the last subprime lending crisis. It’s got nothing to do with so-called ‘Wall Street greed’ or greedy bankers … it’s all about government pressure on banks to make irresponsible loans.