Yes!
Insure that the loans would be paid and let the market work. Also, let the banks holding the mortgage backed securities value them based on cash flow and not mark to market.
They didn't do that and have made a tough recession that's just getting started a lot tougher.
Wrong...because of the mark to market accounting rule by SEC the banks were unable to value those MBS’s...now that SEC has changed that mark to market there will be a better way to value those MBS’s.
Now if the SEC does NOT drop that exemption for the $40 loan to $1 capital reserve, then in a few years this will all have been for naught...it is time to get that RESERVE amount right. Everyone should be writing the SEC to revoke that $40-$1 exemption NOW....before they start lending again or we will be right back in this mess in a few years..