The Subprime Mortgage Crisis of the United States

The Subprime Mortgage Loan Crisis has contributed significantly to the Economic Collapse in the United States. Concerning a lack of regulation by the Fed (that many believe led to this crisis): From CBS in 2010, Greenspan: Subprime Mess Not Fed's Fault [Quote] Alan Greenspan defended his tenure Wednesday as head of the Federal Reserve before a panel investigating the roots of the financial crisis. As he has in the past, Greenspan disputed critics who say he kept interest rates too low for too long, encouraging risky lending. Greenspan also hit back against criticism that his Fed failed to regulate high-risk loans to borrowers who couldn't afford the debt. Many of those loans became the toxic assets that sparked the crisis. Testifying to the Financial Crisis Inquiry Commission, Greenspan insisted the Fed lacked authority to regulate the nonbank lenders that issued most subprime mortgages. But Phil Angelides, the panel chairman, referred to internal Fed documents in which staffers had recommended "broad prohibitions on deceptive lending." Angelides said the Fed had issued guidance on predatory lending but had failed to regulate it. "Why, in the face of all that, did you not act to contain abusive, deceptive subprime lending?" Angelides, a former California state treasurer, asked Greenspan. Greenspan pointed to a series of actions he said the Fed took. Angelides countered that the Fed's actions covered only 1 percent of the subprime lending market. "You could've, you should ...



http://www.youtube.com/watch?v=335iqff25J0&hl=en