Making more bad home loans isn’t the answer

I understand President Barack Obama leans toward offering home loans for under-qualified buyers (“Bad ideas don't improve with age,” Dispatch editorial, April 7). This would create jobs for the building sector.

The fact is that our long, current downturn in the economy was caused by the same thinking, aided by former Sen. Chris Dodd, D-Conn., and Rep. Barney Frank, D-Mass., that government support agencies were in fine shape when actually they were choking on bad loans.

This time it will be different?

Incidentally, the Reuters article “White House projection: FHA needs a bailout” in Thursday’s Dispatch said the Federal Housing Administration will need $394 million to survive this year due to loan defaults.

It would seem that some think the old adage “what we need is more volume” would be the solution to all our problems.


Grove City