Has Obama Forgotten the Danger of Loose Mortgage Lending?

Politicians have been promising more than they can deliver since the dawn of democracy. So it’s no surprise that President Barack Obama wants to make housing more affordable, ensure that home prices keep going up, reduce taxpayer support for the mortgage-finance system and prevent future crises -- simultaneously. But some of the items on his wish list, as outlined in a speech Tuesday in Phoenix, are contradictory.

Many of the president’s goals are smart steps along the path of reform. Private lenders should have to deal with the consequences of their own bad decisions without dumping them on taxpayers. It should be easier for borrowers who are current on their loans to refinance at today’s relatively low mortgage rates. And government policy shouldn’t favor homeownership over renting, now that it’s clear renting is the better option for millions of households.