Defenders of Johnson Crapo have argued that objections from the far right and far left mean the bill struck just the right balance. But housing reform is just as controversial as healthcare and far less urgent. Our current mortgage market, which relies almost exclusively on government backing, at the very least isn't putting sand in the gears of the economy.
So what was Obama thinking? The only explanation I can think of is that Obama is a centrist to his core and did not want to be seen as blowing off the issue. So he put something out there that he believed in, or at least one his financial team believes in: another gift to the banks. Congressional Democrats, to their credit, aren't having any of it.