[QUOTE=BushyTheBeaver;2802409]I don't buy the laying of the housing crisis at the feet of lending to poor buyers. It doesn't pass the smell test. Not that it wasn't a piece of the puzzle--of course loans were made to poor people that shouldn't have been made. But loans were made to middle class buyers that shouldn't have been made either. Hell, there was a hot market in loans to illegal aliens, and no government program could have pressured lenders to do that without causing a giant stink--the brokers and lenders did that on their own.
For more than 2 years I've been a faithful reader of irvinehousingblog.com. It's a fantastic blog that follows the housing bubble in Irvine California--a decidedly upscale town. No poor or minority borrowers there--just greedy middle to upper class flippers and HELOC abusers treating their houses like ATM machines to fund lavish lifestyles. In many cases the flippers were real estate agents themselves! Give it a look--it's a really interesting site.
[B]Also lets not forget Allan Greenspan's roll in this mess. His continued slashing of interest rates to soften the dotcom burst was key in producing the cheap money that fueled this insanity[/B].[/QUOTE]
I think you need more research, but it is interesting to see how the "upscale" communities in california (up here in NorCal, it's BlackHawk, San Ramon, & Walnut Creek that are similar to the "upscale sprawl" of Orange County) are full of posers that act in an affluent manner. My informal poll as a mortgage broker showed maybe 2-3 people out of ten that had the income to really afford the 2 SUV's and 5 bedroom homes...the rest were wage slaves that were able to eek out a life and make the payments of all the trappings they bought.
Greenspan definitely helped out in 2001...the econmy was pretty bad following 9/11...a prolonged refi-boom (so to speak) was helpful, but the Option ARM really changed the game. Even sub-primers could get that low rate...