Dive Brief:
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As President Obama begins his search for U.S. Attorney General Eric Holder Jr.’s successor, some in the housing industry are pushing for a replacement who will loosen the Justice Department’s grip on mortgage lenders.
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During Holder’s tenure, lenders were required to buy back billions of dollars worth of risky, government-backed home loans in an effort to spur the housing market, as the Justice Department sued some of the nation’s biggest banks for billions for approving flawed loans. A result: Banks imposed credit requirements on borrowers that were so strict that millions of would-be homeowners have been unable to qualify for mortgages.
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Banks are unlikely to end that practice until the government stops the lawsuits and the buybacks—so there does not seem to be an end in sight.
Dive Insight:
President Obama has not moved to stop Justice from pursuing the banks, so analysts predict it’s likely he will select a new attorney general who will continue the practice. On the other hand, Obama and his newly appointed secretary of Housing and Urban Development have expressed an interest in boosting homeownership, which requires access to mortgage credit.