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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.

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.

Administration officials say they are looking only to allay unnecessary hesi*ta*tion among banks and encourage safe lending to borrowers who have the financial wherewithal to pay.

“There’s always a tension that you have to take seriously between providing clarity and rules of the road and not giving any opportunity to restart the kind of irresponsible lending that we saw in the mid-2000s,” said a senior administration official who was not authorized to speak on the record.

The administration’s efforts come in the midst of a housing market that has been surging for the past year but that has been delivering most of the benefits to established homeowners with high credit scores or to investors who have been behind a significant number of new purchases.

“If you were going to tell people in low-income and moderate-income communities and communities of color there was a housing recovery, they would look at you as if you had two heads,” said John Taylor, president of the National Community Reinvestment Coalition, a nonprofit housing organization. “It is very difficult for people of low and moderate incomes to refinance or buy homes.”

Yes, young people are being 'left behind' because they can't get loans Oh wait, they are being 'left behind' because you're artificially inflating home values you dbag!!!!! This is the same reason college is expensive

FAKKKKKKKKKKKKKKKKKKKKK!!!!

__________________

“They have the guns and therefore we are for peace and for reformation through the ballot. When we have the guns then it will be through the bullet.” - Saul Alinsky, quoting Lenin

“I wanted [Jimmy] Carter in and I wanted [Ford] out,” comedian Chevy Chase would later admit of his mocking Ford impersonation on "Saturday Night Live", “and I figured look, we're reaching millions of people every weekend, why not do it."

I look forward to spending 500k on a 3 bedroom house that needs updating this summer!

__________________

“They have the guns and therefore we are for peace and for reformation through the ballot. When we have the guns then it will be through the bullet.” - Saul Alinsky, quoting Lenin

“I wanted [Jimmy] Carter in and I wanted [Ford] out,” comedian Chevy Chase would later admit of his mocking Ford impersonation on "Saturday Night Live", “and I figured look, we're reaching millions of people every weekend, why not do it."

Personally, I don't believe we are near the bottom, especially around major cities. NYC for instance is looking at some serious corrections in the coming years.

You're right that it depends on the market, but I would venture to say a majority of the national housing market hit bottom and is slowly coming back. Look at a historical Case-Shiller index chart for reference.

Personally, I don't believe we are near the bottom, especially around major cities. NYC for instance is looking at some serious corrections in the coming years.

The market is rebounding in the Chicago area. The condo I was renting sold for $890,000 last month and was only on the market for two days. Where there is demand there will always be high prices. It's when you build up areas like Las Vegas that you see the bubbles pop.

You're right that it depends on the market, but I would venture to say a majority of the national housing market hit bottom and is slowly coming back. Look at a historical Case-Shiller index chart for reference.

I was looking for some real estate in CO since I am considering relocating there, and I am simply amazed at the amount of foreclosures, even in high end areas. I think that as the economy keeps declining (save the debate for another thread peeps) more and more foreclosures will be coming. Couple that with rising property taxes, rising prices (inflation) and Bernanke's constant attempts to prop up the market, will inevitably send the housing market tumbling down. While some markets will get hit harder than others, I think the decline is inevitable. Personally, as a betting man, Im holding off. I think those that have some cash stashed away will make out like bandits in the coming years. The rebound IMHO is a temporary prop. If I knew how "temporary," I'd be a very rich man.

The market is rebounding in the Chicago area. The condo I was renting sold for $890,000 last month and was only on the market for two days. Where there is demand there will always be high prices. It's when you build up areas like Las Vegas that you see the bubbles pop.

I agree. Chicago, LA, NY, (and generally nicer wealthy areas) are generally immune (at least for a longer period) from the hits simply due to demand of people to live there. Miami however took a massive hit in the high priced condos, but obviously Miami isn't Chicago or NY.

He set in motion the idea that we need to relax standards for mortgages. His goal of removing the down payment hurdle is a great idea for fiscally responsible people. The problem there is, if you were fiscally responsible in first place, you would be in the position to afford a down payment at the appropriate point in your life on your own.

He set in motion the idea that we need to relax standards for mortgages. His goal of removing the down payment hurdle is a great idea for fiscally responsible people. The problem there is, if you were fiscally responsible in first place, you would be in the position to afford a down payment at the appropriate point in your life on your own.

It's unlikely anything of substance will come through this. Underwriting standards have been forced upward due to new government regulation and people usually don't go all-in on the previous thing that caused a major recession. Many people who got burned on tech stocks in the early aughts never waded back in.

I'm currently house shopping with a lot of cash in hand. Houses are literally on the market for a week tops and going for asking price around here. It's surreal.

__________________

“They have the guns and therefore we are for peace and for reformation through the ballot. When we have the guns then it will be through the bullet.” - Saul Alinsky, quoting Lenin

“I wanted [Jimmy] Carter in and I wanted [Ford] out,” comedian Chevy Chase would later admit of his mocking Ford impersonation on "Saturday Night Live", “and I figured look, we're reaching millions of people every weekend, why not do it."

Seems like every president is bent on doing this. First Clinton ("Everyone should be able to own a home."), Bush's/GOP's "Ownership Society," both of which led in some no-small part to the housing bubble and subsequent economic collapse of 2007-08, and now, apparently, Obama. While I can understand, even laud the sentiments behind these efforts, I think they tend to address the wrong end of the problem, shrinking lower and middle class wages and wealth, which I put about 90% on that Great Scam, Tinkle-Down Economics that have proved an utterly ruinous for the aforementioned lower/middle classes, but that perhaps is a topic for another thread. Focus, rather, on economic policies that will benefit the 90% so that they can actually afford houses rather than just the 10% or so as in the past 2-3 decades.

I think the housing market has, for the most part, bottomed out and will slowly, very slowly, recover but I doubt (hope) not to the stratospheric and inflated speculative heights of the naughts.