Tim Westrich ads additional debunking of the “blame the CRA” myth. He also makes this observation:
Moreover, the Bush administration could have taken steps in this decade to further regulate subprime mortgage practices. It wasn’t until July 14 of this year that the Federal Reserve finally cracked down on “unfair, abusive or deceptive home mortgage lending practices” and restricted “certain other mortgage practices,” power given to it under the Home Ownership and Equity Protection Act of 1994. The Fed finally prohibited practices that they had ignored for years, such as so-called “stated-income loans,” in which the lender makes a loan without verifying a borrower’s ability to repay from income and assets, or charging exorbitant prepayment fees.
And even more generally, nobody from the Bush administration said or did anything all throughout 2003, 2004, and 2005 as the housing bubble was building. Not so much, in this case, out of ideological zeal but simply because it was in their political interests to go along with the idea that everything was fine and these increases were sustainable.