“yet NOBODY is reporting how this started.
Banks were forced to make loans to unacceptable risks. “
There’s plenty of political hacks saying exactly that. It makes a handy club for beating Democrats, who richly deserve it, but it’s not quite the truth. The CRA applied to commercial banks and had been around for years. The bubble took off when investment banks joined the game in a huge way. CRA didn’t apply to investment banks, they were funnelling money into risky loans all on their own.
I am speaking of the redlining.
Essentially the banks and politicians figured out that mortgage back security notes were essentially printing a “secondary currency”.
They could take an outhouse and wright a million dollar loan on it and it would be sold as mortgage backed securty. It is hardly hacks it is just reality. The collusion for the inflating of residential property value was a ponzi scheme doomed to fail when nobody else would buy the fake pricings.