Real estate

Government Policy the Major Villain in Mortgage Meltdown

Feds pushed a "no down payment" policy that increased risk


Mortgage-backed securities loaded with "toxic" subprime loans fueled the housing bubble and crash. Many blame Wall Street bankers for the MBS debacle. But actual data show that government policy was the main culprit.

Packages of mortgages sold to investors were a safe investment for decades. It wasn't the creation of mortgage securities that triggered the subprime boom. Rather, government policy unleashed subprime into the MBS market.