Obama to Banks: "Lend to More People"

[Ben]

Holy crap, it's not The Onion.

First he blames banks for "bad lending practices" and giving loans to people for more than they can afford. Now he's telling banks to give loans to people with poor credit because "they deserve a home too". I'll be interested to see who gets blamed for the next housing crash when the loans default.

https://www.washingtonpost.com/business/economy/obama-administration-pushes-banks-to-make-home-loans-to-people-with-weaker-credit/2013/04/02/a8b4370c-9aef-11e2-a941-a19bce7af755_story.html

[AJ Dual]

Student loans are going to implode first, before the housing market/mortgage vehicles does again IMO.

[Perd Hapley]

Not at all surprised.

[roo_ster]

I'll be interested to see who gets blamed for the next housing crash when the loans default.

Predatory lenders and hateful middle and lower class folks who pay their mortgages. 

Just read an article where it was blaming white folks for particular neighborhoods losing "diversity" as they relocated because they wanted their kids to go to better schools and not be tormented by ethnic gangs.

[RevDisk]

First he blames banks for "bad lending practices" and giving loans to people for more than they can afford. Now he's telling banks to give loans to people with poor credit because "they deserve a home too". I'll be interested to see who gets blamed for the next housing crash when the loans default.

Wasn't Obama, but that's literally how the subprime mortgage disaster started.

[T.O.M.]

Student loans are going to implode first, before the housing market/mortgage vehicles does again IMO.

I wonder if this happens, and the student loan market falls to crap, will colleges reduce tuition like housing prices fell after that crash...

[Perd Hapley]

Wasn't Obama, but that's literally how the subprime mortgage disaster started.

Everyone remembers that, except for Democratic voters.

[charby]

I wonder if this happens, and the student loan market falls to crap, will colleges reduce tuition like housing prices fell after that crash...

No, Pell Grant eligibility will be increased and limits raised.

[charby]

Everyone remembers that, except for Democratic voters.

and they are sending one of the architects of that idea to the White House in November. I'm not talking about Bernie either.

[Firethorn]

From what I've heard about the market, the banks could indeed stop dragging their feet about issuing loans to people with even slightly blemished credit.  Basically, they over-reacted and while people with great credit can get really low interest rate loans, they simply aren't available for those with muddied credit that still have the ability to pay.

The trick is to keep to the fundamentals -
Can they realistically afford the payments?
Do they have a down payment?
Is the home worth it?

So called 'NINJA' loans - No Income, Job, or Assets, need to stay gone.  Mortgage buyers need to keep on the first level lender/sellers and make sure they aren't issuing then selling loans fraudulently.

Ultimately though, it should the banks that make that decision, not the politicians.

[Perd Hapley]

Ultimately though, it should the banks that make that decision, not the politicians.

Why do you hate poor people?

[RevDisk]

Everyone remembers that, except for Democratic voters.

I am a Democratic voter. 

Firethorn is correct. Sure, banks could be less picky, but ultimately they should be deciding their own risk. And we should not bail them out when they screw up.

[brimic]

So called 'NINJA' loans - No Income, Job, or Assets, need to stay gone.

Student loans?

[Perd Hapley]

I am a Democratic voter. And pointed that out. 

Everybody knows that too.

[Fly320s]

From what I've heard about the market, the banks could indeed stop dragging their feet about issuing loans to people with even slightly blemished credit.

Not picking on you, Firethorn, but I wish the banks would stop dragging their feet on lending to people with excellent credit.  Such as me.

I'm near the end of getting a re-fi mortgage for my house and it seems like the bank wants more info and reports than when I bought the house.  Our credit scores are over 800, we have high income, only debt is the house (we own the land free and clear), and we pay our bills early.  They still want a ton of paperwork, tax filings, dental records, DNA tests, one kidney, and three of my baby teeth.

[Firethorn]

Student loans?

Should be treated as a form of unsecured credit.  That being said, institutions should be free to decide whether to loan or not based on the prospects of the student. 

IE $100k/year for 6 years to be an elementary school teacher might not be a good investment.

Or, to put it another way - there's a difference between a student who's getting certification for something and has even today a pretty good chance of finding a job out of college that pays decently, and a chronically unemployed person looking to buy a house, where the house doesn't change his employment chances significantly.

They still want a ton of paperwork, tax filings, dental records, DNA tests, one kidney, and three of my baby teeth

That's a big part of the problem.  They've over-reacted and aren't loaning out the capital that the low fed rate makes so cheap.

[RoadKingLarry]

Those that forget/ignore/denounce the lessons of history are doomed to repeat them.

[grampster]

Not picking on you, Firethorn, but I wish the banks would stop dragging their feet on lending to people with excellent credit.  Such as me.

I'm near the end of getting a re-fi mortgage for my house and it seems like the bank wants more info and reports than when I bought the house.  Our credit scores are over 800, we have high income, only debt is the house (we own the land free and clear), and we pay our bills early.  They still want a ton of paperwork, tax filings, dental records, DNA tests, one kidney, and three of my baby teeth.

I would hazard a guess that the banks don't require that information...it's the federal government that demands they require the info.

[charby]

I would hazard a guess that the banks don't require that information...it's the federal government that demands they require the info.

Yes, I bought a house recently, my loan is through a national Bank because I have excellent credit and they offered the lowest rate and cheapest closing costs. The amount of paperwork was crazy and almost all of it was demanded by the feds. I'm glad I got approved for loan before October 1, 2015 because the amount of paperwork increasedone even more.

[makattak]

Those that forget/ignore/denounce the lessons of history are doomed to repeat them.

Those that do learn the lessons of history are doomed to helplessly watch them repeat.

[brimic]

I would hazard a guess that the banks don't require that information...it's the federal government that demands they require the info.

Yep. HUD paperwork is always the bulk of it.