" This is erroneous mythology.

The fact is that the so-called "mortgage market" is entirely a non-market creation of the federal government that began in 1938 with the creation of the Federal National Mortgage Association (Fannie Mae).

The investor guarantees provided by Fannie Mae, and its related agencies Ginnie Mae, Freddie Mac, FHA, and the VA are the sole means by which the vast majority of working Americans are able to obtain home mortgages. Take away the government guarantees and virtually all of us would be renters for life, as was the case prior to 1938.

The subprime crisis resulted from political decisions to first artificially reduce interest rates to promote the so-called "ownership society" prior to the 2004 Presidential election (go back and read the President's speeches from that era), and then to steeply increase interest rates post-election at the expense of recent mortgage borrowers.

"

" Yes, I'm going to have to agree with Curious Reader on this one. Even for the Cult of "Government All Bad, Free Market All Good" this is quite a contortion to suggest that an act from the 70's designed to restrict the very real issue of redlining ( an underlying cause in the wealth and upward mobility gap in our society) is what triggered this recent mortgage meltdown.

As I wrote about a few weeks ago, I began to see this problem coming a few years ago when I seemed to be meeting a lot of ambitious 20-year-olds in off-the-rack suits and too much cologne who were working out of strip malls and pushing 95-100% LTV loans with zero or (almost nothing) down.

Its a bitter pill to swallow but we have to come to grips with the fact that most of America's biggest financial upheavals have come from over-confident, under-regulated markets. "

" Wishful thinking and little understanding, it’s called gambling. Fannie mae, Ginnie mae and Va mortgages must meet a certain criteria to be guaranteed. In other words they are regulated.

The current mortgage crisis is not about these guaranteed loans or any socialist conspiracy as the letter writer would suggest. Rather it can be laid at the door of freemarketeers or corporate pirates who see no regulation as a license to steal. Even casinos must submit to greater government oversight than is currently practiced concerning the financial industry.

Markets need leeway to expand and contract but the invention of sub prime ARM loans in an inflated real estate market was a mouthwatering bonanza for large speculative institutions to promote as the potential for ever greater profits, by shifting the risk to institutions not regulated as strictly as the banking industry.

Laying the blame on the Community Reinvestment act of 1977 is pure red scare dogma, demonstrating a lack of economic understanding. This crisis is directly related non-regulation and lack of honest supervision. If any thing it can be laid at the feet of those calling for less regulation which has brought us the fiascos of Enron et al and the sloganeering profiteers of our current situation.

The steady call for less government regulation of the financial and other networks over the last thirty years has led to public bailouts not of misled or uninformed purchasers but the same gamblers it should have policed in the first place leaving the purchaser and the public holding the bag while faceless corporate enterprises take a pass.

The fogging of government responsibility with the free market choice assumes that free markets are actually subject to an enforceable code of ethics. The proper word is banditry.
"

" This mortgage meltdown was created by a massive cutback in banking regulators, a total lack of oversight of securities companies that created an entire industry based on weak leveraged paper, and insane fiscal policy over the past 7 years. "

" What you really need to do is go back to the Federal Reserve Act of 1913 to find out where this all started. Rockefeller, JP Morgan, Paul Warburg and their gang all met on Jekyll Island and wrote this eventual legislation. Congress rubber stamped it in the middle of the night on Christmas eve when most congressmen were home with their families. It's all in the history books but they don't use THOSE books in teaching our children. The government teaches us how to lie...and they are indeed the best! Wake up people! "

" As usual Larson and his conservative friends try to rewrite history and turn it into an attack upon the liberal socialist left who seems to be everyone that doesn't agree with them. Federal regulation usually occurs when businesses go bad and consumers are duped. I think this was the result of a lack of oversight and an overly aggressive free-market mentality (shall we say "unrestrained corporate greed") that has hobbled our economy and people with untold debt. Perhaps Mr. Larson would be more honest by submitting his "work" to a fiction writer's conference. "