A couple of things about that. At that period of time new mortgage companies were springing up offering no doc loans. A development having nothing to do with Pelosi since they were not selling the mortgages to government backed agencies like Fannie and Freddie. They were bundling the mortgages in to RMBS's and selling them as AAA rated bonds to the investment community. That's how they recapitalized themselves.
Secondly, have you ever heard of Bush's "Ownership Society" initiative. He was promoting the idea that mortgage companies come up with creative ways to give financing to people who did not previously qualify for a mortgage based on conventional standards.
There are plenty of culprits, like lenders who peddled easy credit, consumers who took on mortgages they could not afford and Wall Street chieftains who loaded up on mortgage-backed securities without regard to the risk.
But the story of how the United States got here is partly one of Bush's own making, according to a review of his tenure that included interviews with dozens of current and former administration officials.
From his earliest days in office, Bush paired his belief that Americans do best when they own their own homes with his conviction that markets do best when left alone. Bush pushed hard to expand home ownership, especially among minority groups, an initiative that dovetailed with both his ambition to expand Republican appeal and the business interests of some of his biggest donors. But his housing policies and hands-off approach to regulation encouraged lax lending standards.
www.nytimes.com
So Much for Bush's 'Ownership Society'
Remember the ownership society? President George W. Bush championed the concept when he was running for re-election in 2004, envisioning a world in which every American family owned a house and a stock portfolio, and government stayed out of the way of the American Dream.These families were, of...
www.newsweek.com