But if we insist on figuring out whether each and every applicant spent too much on their vacation in the recent past, or renovated their bathroom without a government-approved reason, or violated the Guidelines on Acceptable Countertop Materials that the Department of Housing would need to draw up, or sent their kids to private schools, we should be willing to pay for the army of bureaucrats who will need to pore over people's financial histories in order to make that kind of determination.If you do anything to help other people, whether it's giving money to bums, building houses with a church group, or establishing a government program, some of that help is going to go to people who do not deserve it. Some of the undeserving are easy to weed out, but you'll never be able to create a 100% clean program. And the closer you get to 100%, the harder you have to work to get it, and the more expensive the program becomes. It resembles the problem of the last mile (in that the relationship between efficiency and cost is a power law relationship), and the sweet spot, in terms of efficiency, is still going to mean that a lot of undeserving people get help.
That's not even getting into the real issues surrounding the housing crisis, which is that if my good-for-nothing, irresponsible neighbor gets what he deserves for buying too much house and poorly managing his money, i.e. he loses his house, then the value of my house goes down. When this happens once, it's a relatively small problem, but when it's widespread, as it is now, it cascades badly.
Most (or at least many) housefires are the result of somebody doing something stupid. That doesn't mean we just let them burn, because doing so would hurt their neighbors who didn't, say, leave a pan of hot oil on the stove while they went next door for a cup of coffee.