You make a lot of good points.
“(2) Almost no one understood that millions of new buyers were moving into homes with no down payment, and with mortgage payments that were often equal to, or less than, the rent they had been paying”
Dubya should have known, because he was championing and promoting an incredibly foolish policy known as the American Dream Downpayment Initiative that was designed to do exactly that.
“In creating mortgage pools and determining risk, lenders depended on algorithms that had been accurate for 80 years:”
The entire industry ended up pricing risk by using David X Li’s Gaussian Copula Function which he borrowed from the life insurance field. The problem is that there was a serious flaw in using this formula for mortgages- which none of the wizards running the the lenders were aware of because they didn’t understand the complex math involved and they didn’t listen to their risk officers who warned of impending disaster.
From 2005-2007, he rarely made a speech without saying America achieved record home ownership under his administration.
Thanks for the heads up on David Li, whose name I don't know.
Several of the credit rating agencies have claimed innocence based on the two algorithms I mentioned, which is why I listed them.