You still have not followed where it went, and why.

In 2004 another thrust was initiated, and it dominates the foreclosure numbers.

A crime requires a motive. The motive of this crime was power, not greed.

You do not look far enough back. I agree that what you state is true and helped with this crisis but the beginning was when Congress and the President pushed to get banks to lower the standard for loaning money in order to make eligible those people that could not qualify for conventional loans. These borderline applicants and the future "custom" loans, designed for those who could not be qualified for conventional loans pushed the Government into the rule changes that allowed the banks to have more debt ratio than before. This notion that every American deserves or as some say has the "right" to home ownership is the root. All Americans have the right to own property but they also have the "right" to be responsible for the payment for that property. Just because it is expensive or they cannot afford it does make it unfair or somehow take away from their rights.
The government is pushing entitlements and some people love those. I beleive that it takes away from our self worth. I refuse entitlements for myself just as I do for my children who seem to care much more for things that they work hard for and earn. This places value on these things much like houses. If I give my child a house they will not hold it in the same regard as I have held it after I have worked many years to save for the down payment and then struggled many months to make the monthly payment. This pushes me to maintian the house and keep it looking nice and thus retaining its value.

Lita,

It's possible that happened, but this really was a political power grab, and misstatement of financial statements was not required to accomplish it.

Read the history of statements by Karl Rove and George Bush about capturing the minority vote. It's something they actively engaged in going way back in Texas. It was their goal to break the Democrat stranglehold on the minority voting block, and they crowed about their successes. Bush was advertised as being the Latino buster.

Alphonso Jackson, a partisan black Republican, was their buddy - long-time buddy. It goes way back. They wanted there to be a lot more Alphonso Jacksons, and they were willing to pay for them.

In 2004 HUD did something, and more than 400 billion in bad loans were quickly issued in the next two to three years (not all HUD, but most exceedingly reckless.) What is the median age of a foreclosed mortgage? Within how many months of origination do most foreclosures happen? Do the arithmetic.

If anything, the bankers, like Paulson, were probably duped. People just do not realize how evil and manipulative Karl Rove is. He will do anything to win, and he did this. They thought the economy was easily controlled - soft landings, magical tax cuts, Goldilocks, etc. They never suspected this disaster could happen. In 2004, these men were pretty full of themselves. They were fantasizing about a 100-year Neocon reign, and shattering the minority voting blocks was their guarantee.

The Fed, other than the Ayn Rand stupidity stuff, was not in on it. The Burrsankit Fed shocked them. He raised rates pretty aggressively. Certain regions of the country had economic problems that aggravated the situation greatly. The ARMs imploded. Instant financial catastrophe. But not because of greed. Greed is basically good. Still is. We are going to need a lot of it.

Banks were told that they could lend the money, not that they had to.

You forgot about what this rule change did to the price of oil. The massive leverage created through the sale of mortage backed securites was also used to buy billions in oil contracts.

The mortage mess and energy crisis all stem from Washington granting provisions to investment banks that allowed them to run up massive short term debt in an attempt to cash in big. $100 oil and $700billion in taxpayer money going to bail out Wall Street, and perhaps the second great depression all becuase Paulson wanted to increase the bottom line of Goldman Sachs.

I also wanted to add. Whoever thought it would be a good idea to have investment banks sold off as publicly traded companies whould be found and shot.

That just asked for the kind of shady accounting and massive spending the curtailed the economy. When a stock becomes publicly traded all that matters is the bottom line. The higher the bottom line, the bigger the fortune you sit on. IN one day a rise in stock can net more paper wealth than a years worth of true business transactions.

Look when Goldman Sachs became a publicly traded entity, 1999. Then look what they got into right after that and you'll see that Goldman Sachs can almost be completely blamed for the entire economic meltdown. Goldman was the principal in the speculative oil price drive and the selloff of mortage backed securities. When investment banks started to show signs of trouble the former CEO of Goldman came to the rescue with a $700 billion safety net.

One thing that has not been mentioned is the 2004 hearings regarding Republican concerns that Fannie & Freddie were being mis-managed in the interest of increasing mortgages to people who were not qualified.

Gov't regulators interviewed at the hearings expressed grave concern that their books were cooked and they posed systemic risk to the economy. Democrats ranted that the concerns were overblown and that the GSEs were fullfiling their purpose of increasing home ownership.

Community Reinvestment ACT of 1977 banks were told they had to do this or face the FDIC HAMMER. The start of the Bubble.

I live in Baltimore, Md and i have seen the blight that is pervasive in many inner city neighborhoods. I doubt that there are many well qualified borrowers in those neighborhoods, and if there are, due to the deteriorating conditions of the neighborhoods, the bank, in my opinion were correct in not lending to the "well qualified"