I couldn't figure this one out when I saw the headline in the Washington Post: "Obama Administration Pushes Banks to Make Home Loans to People with Weaker Credit." Haven't they learned anything from recent history? This was one of the reasons we had the banking and Fannie Mae crisis just 5 or 6 years ago.
Officials are also encouraging lenders to use more subjective judgment in determining whether to offer a loan... If you loan someone money there has to be objective criteria that they will pay it back or someone is getting to eat the loan. And it usually ends up being the honest taxpayer.
CNBC reports more problems developing with loans to people who cannot realistically pay the loan off.
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