And the Bush administration’s decisions were driven by the same political realities that state governments face. Namely that we have a voting populace that’s addicted to credit and the idea of government pulling strings to make sure the “disadvantaged” get given lots of stuff that is naturally the result of hard work and good choices. Any serious attempt to shut down the subprime lending scam would have been instantly attacked by useful idiots on the left as “a move to prevent disadvantaged minorities from achieving the American Dream”.
If the federal government hadn’t refused to go down this hopeless path, thus allowing the state governments’ efforts to actually start having a significant effect, the state governments would quickly have found themselves forced to retreat. There were a lot of people making a lot of money on these scams, as well as a lot of exploited home”buyers” who still believed this was a great thing for them. The former wouldn’t have wasted a second in lining the pockets of the Al Sharpton types in exchange for their willingness to run around convincing crowds of blacks and Hispanics that the evil racist powermongers were trying to stop them from being able to buy nice homes in white neighborhoods.