Franklin Raines, the former CEO of Fanny Mae, is one of The Obama's economic advisers, and is on the short list for his Treasury Secretary cabinet post. If you recall Raines is the man who had financial documents forged so that he could receive he's windfall bonuses. Now it looks like that the federal government is getting into the mortgage business. This should end well.
This "crisis" was caused by a number of things, but mainly political correctness. Laws were passed that made it illegal to ask a potential home buyer, how much money they made. The government, used many leftest groups like Acorn
to act like it's muscle to threaten banks and mortgage companies to lend money to people that they knew would not be able to pay back. The government in turn, threatened to investigate institutions that did not follow these practices.
The bottom line is, people were buying houses they knew they could not afford. Loans were made over 100% the value of the property. The value of homes corrected itself from overinflated values. People were getting 100% or more mortgages on homes that were, in reality only worth about half of the listed value.
There is a lot of blame to go around. From the government, forcing the lenders hand, to the lenders "cooking the books" to show profits, as well as the borrowers that knew they could not afford to buy a house in the first place. You could also add the people who got on the flipping band wagon over the past decade into the equation. since over half of the foreclosures were on second homes or homes bought just to be flipped. (This trend also added in the falsely over inflated prices of homes.)
In the end, it is the people that the government claims to want to help that get hurt. As well as the people like me and you that the government doesn't give a shit about that will have to pay off this mess.
Throw a presidential election in the mix and it doesn't matter who wins because we all lose.
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