Obama's anti-logical argument

President Obama whined in his speech that unethical banks "trick" people into loans they cannot afford. This makes absolutely no sense. Why would banks give you a loan you can't afford? All that does is cause them to lose money.

If I know you can't afford to pay me back, I wouldn't loan you $100, much less $100,000 or more! That's just stupid! And if it was about getting the house and flipping it, they could do that much more efficiently by just buying the house instead of giving some dude a loan he will default on in 5 years, so the bank gets the house.

Do people even think about this crap logically?