Government Housing Policies In The Lead-Up To The Financial Crisis: A Forensic Study

From the American Enterprise Institute and The Heritage Foundation:


Monetary Policy/Financial Regulation

Government Housing Policies in the Lead-up to the Financial Crisis: A Forensic Study

by Edward Pinto

American Enterprise Institute

October 22, 2010

The major cause of the financial crisis in the U.S. was the collapse of housing and mortgage markets resulting from an accumulation of an unprecedented number of weak and risky Non-Traditional Mortgages. These NTMs began to default en mass beginning in 2006, triggering the collapse of the worldwide market for mortgage backed securities and in turn triggering the instability and insolvency of financial institutions that we call the financial crisis. Government policies forced a systematic industry-wide loosening of underwriting standards in an effort to promote affordable housing.



URL: www.aei.org/docLib/Government-Housing-Policies-Financial-Crisis-Pinto-102110.pdf

Here is a link to the report:  http://www.insideronline.org/summary.cfm?id=13789