What good will it do to force banks to lend money to borrowers incapable of paying the loans?

I think you nailed it - Congress is filled with idiots. Lending is a two way street. Lending to losers doesn't work (as you pointed out), so banks are not going to do that again (at least for a while). They need to find borrowers who have the ability to pay, but with this economy no one wants to borrow to buy anything since they could be losing their job any day.