Do low-income families deserve homes?

by 29 Apr 2015

By David Lykken
Special to MPA

A few weeks ago, I heard about the initiative under consideration by the current administration to lower credit standards and give more people the opportunity to get into homes. Of course, the argument is that lower-income families deserve homes too. It's the American dream, and everyone should have the opportunity to attain it. Obviously, I agree that home ownership is a good thing for all of us to aspire to, and I wish more low-income families could get into homes.

Nevertheless, I am worried about the lowering of credit standards in order to engineer more homeowners. It seems to me that such practices, at least in part, are exactly what got us into the recession in the first place. I want people to get into homes, but I want them to do it the right way. I don't just want to give people mortgages -- I want them to be able to afford the debt they are assuming. I want to go for sustainability.

Whether or not it's time for us to lower credit standards again is somewhat of a gray area. It's a judgment call. Many in the industry seem to be in support of it. I'm not necessarily opposed to the idea -- I just want us to be cautious of our motivations.

Are we just looking to close more deals, without thinking about where it may lead in the long run? Or do we honestly feel that the economy has improved enough to enable people to bear the burden? Regardless of where we stand on the issue, it is imperative that we ask ourselves these questions.


  • by Aaron | 4/29/2015 7:05:06 AM

    Low income and credit standards are separate. The recession was fueled by lowering the income verification and credit... This causes shaky borrowers to default and leveraged investors to bail - cards fall. Credit standards can be lowered if we keep the income history and verification in place... Shaky borrowers hurt everyone.

  • by Dominick Sammarone | 4/29/2015 9:03:03 AM

    Do low-income families deserve homes? ABSOLUTELY! Everyone deserves a home.
    They're called apartments.

    Stop trying to "push" a mortgage or real estate sale on everyone who breathes. We went through that phase in the U.S. already and it failed miserably.

  • by Carl hoelscher | 4/29/2015 10:53:46 AM

    We are talking about two separate issues. What got us in trouble was allowing people to qualify for mortgages that required more than 30% of their income to support. Also allowing mortgages that were 125% of appraised value.


Should CFPB have more supervision over credit agencies?