Originally Posted by
Koyote
Don't forget the repeal of the Glass-Steagall Act, inadequate regulation of mortgage lending practices, and Alan Greenspan's incredibly naive view of financial markets.
Rather, it was because of Barney Frank and Ted Kennedy, among others in Congress, who sponsored legislation requiring a certain percentage of loans being given to non-credit worthy recipients in order to overcome perceived disparities in the housing market. The whole subprime mortgage crisis was a direct result of their legislation. Recall that the lenders got vilified and politically crucified, but no one admonished the legislators that forced the crisis into existence. Freddie Mac and Fannie Mae execs got off scott-free. That legislation helped drive up prices, drive up demand, and drive up the number of subprime mortgages that were doomed to failure from the start.