Obama repeating mistakes that caused housing crisis

Paul Sperry:

With studies showing home foreclosures hitting blacks and Latinos hardest, the Obama administration’s answer is baffling as well as destructive — to lend them more money, repeating the cycle of easy credit that led to the housing boom and bust. 

A new AARP report finds that even elderly minorities are facing serious mortgage delinquencies. Fifty-and-over African-Americans, for example, are almost twice as likely to lose their home as older whites. 

“This crisis is far from over,” AARP policy chief Debra Whitman said. “We need to think about more creative solutions.”

President Obama’s solutions, however, look a lot like the original problems that landed minorities in the financial mess they’re in today. 

For starters, his new consumer credit watchdog agency has quietly adopted weaker, minority-friendly mortgage underwriting guidelines first published in a landmark 1994 policy statement released by the little-known Interagency Task Force on Fair Lending. 

The 20-page “Policy Statement on Discrimination in Lending” — signed by the heads of 10 federal agencies, including then-Attorney General Janet Reno — warned banks that “the agencies will not tolerate lending discrimination in any form.” 

It was a noble goal — undercut by the fact that the statement also set lower standards by which banks could qualify low-income minorities with spotty credit. 

“Applying different lending standards or offering different levels of assistance to applicants who are members of a protected (minority) class is permissible in some circumstances,” it said. 

“Providing different treatment to applicants to address past discrimination would be permissible if done in response to a court order.” 

The policy planted the seeds of the mortgage crisis, as lenders abandoned prudent underwriting standards altogether. Yet the 1-year-old Consumer Financial Protection Bureau, which was created by the Dodd-Frank financial overhaul, has dusted off the Clinton-era regulation.

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This is idiocy on stilts.  It turns out the government is the one pushing predatory loans on people who would be better off not making the investment in a home they cannot afford.  It is also proof of my contention that the Dodd-Frank law as a massive cover up by Democrats of their failed housing policies that caused the debacle.  We already know that in the first go round minorities that took advantage of the more lacks lending requirements have lost their homes and ruined their credit.  Democrats seem determined to repeat the mistake.