Bankers and mortgage companies are the main culprits for our financial meltdown. When the CRA was implemented, the bankers legitimately complained about the risks of waiving lending requirements. Clinton placate them by having Fannie Mae and Freddie Mac buy these subprime notes along with other mortgage notes after the banks held them for six months or more. When the bankers discovered that FMFM were not auditing the mortgage notes, because the fed gov assumed bankers would not jeopardize themselves via fraud and losses from mortgages based on false applicant data. The gov was deadly wrong, because their policy of buying all the mortgage notes unaudited meant bankers can make tons of money in the six month holding period just on application fees and points. Bankers no longer cared about loan integrity and more on how much volume of mortgages they can get in the six month period. Encouraging prime applicants to falsify income so they can use their good credit history and new false income to qualify for larger loans (and larger dream house) became widespread practice. Subprime loans did not hurt as severely as false application prime loans because the subprime are clearly marked while liar loans are hidden toxic assets sold as AAA rated investments. Country Wide and WaMu were not the few rotten apples, nearly all the large US banks were involve with liar loans and selling it to FMFM. Conservatives need to stop spreading the myth that gov is the major cause of the real estate and financial collapse of 2008. If the bankers knew the gov was not auditing the mortgage notes they were buying, they at least should not have taken advantage of the gov blindspot and flooded the market with liar loans.
True, since the Fed is independent of "gov". The only one cause of all booms and busts is loose money.