Fin crisis one area blog

As for blame, this report identifies who the real perps were:

From the FHFA report 2010:

• Credit Scores: Eighty-four percent of single-family mortgages acquired by the GSEs during 2001 to 2008 were made to borrowers with FICO credit scores above 660, while 5 percent were made to borrowers with FICO scores below 620. In contrast, 47 percent of mortgages financed with private-label MBS originated during this period were made to borrowers with FICO scores above 660, while 32 percent were made to borrowers with FICO scores lower than 620.

• Loan-to-Value (LTV) Ratios: Over 82 percent of GSE-acquired loans had LTV ratios at origination of 80 percent or less, while two-thirds of mortgages financed with private-label MBS had LTV ratios at or below 80 percent, with that share increasing from 54 percent of 2001 originations to 81 percent of 2008 originations.

• Loan Payment Type: Eighty-eight percent of GSE-acquired mortgages were fixed-rate loans originated between 2001 and 2008 and ranged from 79 percent for 2004 originations to 96 percent for 2001 originations. Mortgages financed with private-label MBS were predominantly adjustable-rate loans; comprising more than 70 percent of mortgages financed with private-label MBS originated between 2001 and 2008.

You can blame Dubya's regulator failure based on the GOP's 'hands off approach' is the best and the private banks for the housing crash.

 FHFA Report Shows GSE Loans Outperformed Private-Label MBS Loans

 https://www.ncsha.org/blog/fhfa-report-shows-gse-loans-outperformed-private-label-mbs-loans



 There is plenty of blame to go around for the U.S. housing bubble, but not much of it belongs to Fannie Mae and Freddie Mac. The two giant housing-finance institutions made many mistakes over the decades, some of them real whoppers, but causing house prices to soar and then crater during the past decade weren’t among them.

The biggest culprits in the housing fiasco came from the private sector, and more specifically from a mortgage industry that was out of control. These included lenders who originated home loans, investment bankers who packaged them into securities, rating agencies that misjudged these securities, and global investors who bought them without much, if any, study.

In other words, America’s mortgage securitization machine was fundamentally broken. It created millions of mortgage loans that, even under reasonable economic assumptions, stood little chance of being repaid — and were not.




Also to blame, of course, were regulators, who gave the private mortgage market little, if any, oversight. The market’s watchdogs were lulled to sleep by a misplaced view that self-interested private financial institutions would regulate themselves. This flawed thinking was most pervasive at the nation’s most important financial regulatory agency, the Federal Reserve.



By Mark Zandi


http://articles.washingtonpost.com/2012-01-24/news/35438120_1_mortgage-loans-total-residential-mortgage-debt-subprime-and-alt-a