Fezzy's right. It was the regulations implemented by the government that started this whole mess, put into place by past Democratic presidents. They felt it was a "right" to own a home and thus forced banks to lend to unqualified people. Now we're facing an economic meltdown and the Democrats want to place MORe regulations on the industry.
The banks covered under the CRA were responsible for about
1 in 4 of sub-prime loans by the federal reserve's own admission, but the bulk of it occurred outside of government supervision. By contrast private institutions comprised about twice that much. Obviously that doesn't absolve the government of blame but saying they were responsible for the bulk of these loans is silly. If anything, the government is at fault for creating a moral hazard after the last bank related fiasco (the S&L crisis).