yes. It was home owners who anticipated the economy would stay strong. Most were homeowners who had homes for years without a missed payment.

you might find "Unsustainable" interesting; the
basic hypothesis is that the producers in the U.S.
could secede and drag the moochers/looters into
a better future, without a civil war. -- j

This was also the case in my Georgia neighborhood. Large homes were sold to people with no jobs or income, a down payment was not required, and people moved in droves from high tax states. It didn't take long for the foreclosures to begin. It always irked me that people wanted a better standard of living with lower tax rates, but once they moved here started complaining that the area was too conservative and started voting for democrats/leftists with their high tax policies. Some of them have no idea how to maintain a home, complain about having to pay for trash pick-up because where they moved from it was "free." I'm getting off subject a bit - just a little venting.

Actually here is the irony.
Jimmy Carter actually started it with this law.
Housing and Community Development Act of 1980 Remarks on Signing S. 2719 Into Law.
Regan could have done away with this new agency and policy set but did not.
Clinton, expanded HUD to a point that went so far it was unbelievable.
Fannie and Freddy (started in 1938 by Democrat FDR) and Barney Frank, started blowing up the bubble. Barney Frank and Chris Dodd helped banks created "virtual" investments based on derivatives based on mortgages permitted by HUD, Fannie and Freddie., Pres. G.W. Bush expanded HUD again until the bubble finally burst.

5 Democrats and One Republican are really at fault when you perform a Root Cause.

The biggest problem with GOP and Republicans is they unwillingness to roll-back the DUMBASS policies, they just try to pander to the same looters as the Democrats.

Beautifully articulated.
The only items that I would add to your list of contributing factors would be: Endless, nonsensical wars of attrition with created enemies who view death as the ultimate good...and the deaths and disabling of our soldiers who would have been productive members of society.
People create demand. Productive people create supply. Destruction eliminates both.

working on it John. still in developmental editing

They caused a lot more than the financial crisis and none of it any good.

is that the cover of a new book? . when might it
become available, K? -- j

p.s. my latest edit is:: http://www.amazon.com/Unsustainable-Tuck...

you got it! . community reinvestment act, then Barney
Frank and pressure on the banks, then Hank Paulson
and Boom! -- j

We needed a study to tell us that?

All my life we've had those 3% down loans with a slightly higher interest rate as a "benefit" to veterans. It's sounds like we're back to everyone enjoying this "benefit" that actually just means people taking more risk and paying more interest.

Of Course!

And its starting again. 3% down payment loans.

same two guys who made the the finance reform laws on the back end of the deal.

also the tax code is set up in such a way, it also was driving people to make certain kinds of investments they otherwise might not have

well partly that happened because the money was running into closed doors on investing. Regulations had already shut the doors of many important sectors. As usual, govt picking winners and losers. still happening.

me too

That's another accurate corollary... the distortion of the housing marketplace also changed houses from "homes" to "investments."

That unintended (?) consequence was another driving force for the bubble and the collapse.

So have I and I just forwarded the link to a ton of folks who have disagreed with me since I recognized the premiere of the Bill and Barney "Everyone MUST OWN A HOME show."

Add to that the absurd 'mark to market' crap and the die was cast to kill the already overblown housing market.

I have described "mark to market" of that time as analogous to "ok, what's your house worth? Oh, wait, I'm going to kill you and all of your family if you don't sell it by noon tomorrow. NOW what's your house worth?"

My observations and conclusions have been vindicated by reports like that one, and unfortunately, the actions of many others caused untold damage to thousands, if not millions of US citizens.

THAT pisses me off!

The "crisis" of the late 1830's was neither national or a crisis except in the balance sheets of the money center of New York and industries dependent upon money center bank financing. It was caused by the central bank of England restricting credit, and the NY banks that followed suit. The wiki-history is written during the era of the fed and you can easily see the slanted view in the text, blaming the lack of central banking power for excesses in the American west. If you read the details of each "crisis" you can decide for yourself. War or natural disaster destruction of capital is usually the cause and the crises are painful especially in the areas of destruction. (Look at the result of war in Europe vs US in 1946-1960 for example.) No central bank control would have had any positive effect (based upon the history of central banking.) Bankers make mistakes and they always will, but only a centrally controlled system forces the errors to a wide scale. The "crisis" was not a depression because the economy was not so concentrated nor dependent on debt. The central banks purposely create as much debt as they can because it increases profits. Then when a natural cooling of industrial production due to slower demand or due to lower production from mines (silver and gold in particular) the banks who have issued far more credit than they have assets reduce credit and demand specie payments when they have just had a reduced supply. Central control by a banking cartel always does the opposite of what is promised when it is authorized with government backing.

Bullseye!!!!!!!!!

excellent points

Let the free market work. If banks had let their customers lose houses, then realtors would have been more conditioned to saying "NO!"