PT, I'm afraid you must be drinking the Kool-Aide provided by the libs.  Other than the AGW scam, you seem to often be more like a stealth lib pretending to be a curmudgeon conservative or libertarian.  I don't know where you get this '04-'06 time frame stuff later in this thread, but the truth is that the seeds for the sub-prime mortgage crisis were sown by Carter with the passage of CRA.  Clinton then upped the ante, with the help of Obama, by forcing banks to use poor lending practices to increase minority homeownership with federal guarantees and threats of fines and more. (bolds are mine)

Acorn's Seed Money:  The group that pushed banks into the risky loans that brought the economy down is now eligible for a huge chunk of stimulus cash. The stimulus plan does create jobs — for community activists.

Revision Run Amok:  Media Bias: The paper of record blames the "mortgage bonfire" on President Bush and his "laissez-faire" housing policies. But to get there, the Times completely ignored history prior to 2002.

..."no Clinton housing crusader was interviewed for the Times' one-sided story. The paper's reporters didn't even bother to search their own archives. Had they done so, they would have found a Sept. 20, 1999, article by Steven A. Holmes that reported:

"Fannie Mae has been under increasing pressure from the Clinton administration to expand mortgage loans among low and moderate income people."

It quoted former Clinton Budget Director Franklin Raines, who Clinton installed at the helm of Fannie. Raines said he had relaxed credit standards to meet the Clinton administration's goal of 50% loans to low-income minority borrowers.

Further on in the story, a highly regarded scholar warned that Fannie was taking on too much risk and could fail if the housing market ran into trouble.

"If they fail," warned American Enterprise Institute fellow Peter Wallison, "the government will have to step up and bail them out."

His warning was not unique. There were many like it back then. Even Clinton's own Treasury Secretary Lawrence Summers in 1999 and 2000 warned of the dangers subprime lending posed, well before Bush was in office.

Yet Bush gets all the blame for ignoring warnings.

It's plain the New York Times is trying to litigate its case — without full discovery or a fair trial — on behalf of its client, the president-elect, who derided the Republican "Ownership Society" during the campaign.

Small wonder that Americans have lost faith in the media establishment."

The Subprime Lending Bias:  Media: If, as they say, it's journalists who write history's first draft, then future texts will be riddled with errors about the origins of the subprime disaster, teaching future leaders the wrong lessons.
"Take, for instance, a recent front-page article in the Washington Post, under the headline, "How HUD Mortgage Policy Fed the Crisis." The piece correctly fingers HUD for helping fuel risky lending at Fannie Mae and Freddie Mac. But the newspaper starts its analysis in 2004 (in fact, the first sentence begins, "In 2004 . . . "), making it seem as if the Bush administration crafted "affordable housing" policy and created the subprime market.

The Post knows better. The Bush HUD merely continued a politically correct policy launched by the Clinton administration. For the first time, President Clinton ordered HUD to set quotas for Fannie and Freddie to buy huge portions of Community Reinvestment Act loans and other low-income mortgages made to borrowers with poor credit. The Post failed to mention this key fact.

By 2000, fully half of the mortgage giants' portfolios consisted of these risky loans, most of them subprime mortgages. In effect, the Clinton HUD set a time bomb that would explode years later with the collapse of home prices, which happened to occur on Bush's watch.

At the same time, HUD pressured the federally subsidized giants to lower their loan-to-value ratios and other underwriting requirements to accommodate minority borrowers. HUD Secretary Andrew Cuomo even admitted that the administration was mandating a policy of "affirmative action" lending (his words, not ours).

And it was Clinton who initially spread the subprime rot to Wall Street. To help Fannie and Freddie reach their "affirmative action" lending quotas, HUD in 1995 let them get affordable-housing credit for buying subprime securities that included loans to low-income borrowers.

Less than two years later, Freddie partnered with Wall Street investment banker Bear Stearns to issue the first securitizations of low-income CRA loans.

There's even a press release still available on the Web that memorializes the historic deal, which dumped hundreds of millions of dollars in the risky loans on the market — a down payment on the hundreds of billions that were to follow.

The Post left all of that out of its story, even though the deal marked the beginning of the boom in subprime securities.
..."The administration's blind eye to the impending crisis is emblematic of its governing philosophy, which trusted market forces and discounted the value of government intervention in the economy," wrote AP Washington correspondent Matt Apuzzo.

Reality check: "Government intervention" is what planted the seed to this whole crisis. As we've noted, Clinton in 1995 revised CRA regulations to pressure banks into adopting "flexible" lending standards to increase minority homeownership.
...Make no mistake: It was Clinton who forced banks — most importantly, Fannie and Freddie — to go into the subprime market to serve the targeted populations that HUD and other Clinton banking regulators wanted them to serve.

In effect, the media are blaming Bush for Clinton policies. Whoever controls the debate in Washington controls the truth. Right now, it's Democrats and their press courtiers. And so far, they've managed to shade the truth about the root causes of this epochal financial crisis."

CRA Defenses Sound More Like CYA:  Mortgage Meltdown: Democrats first circled the wagons around the Community Reinvestment Act, aided by their friends in the media. Now regulators have joined them. It's called CYA.
..."In a more aggressive pursuit of "social justice," the Clinton administration revised the CRA in April 1995 to mandate that banks pass lending tests in "underserved" communities and suffer tough new sanctions for failing to make enough loans there.

According to the language of the new Clinton regs, banks that used "innovative or flexible lending practices" to address the credit needs of low-income borrowers passed the test. Banks with poor CRA ratings were hit with stiff fines and blocked from expanding their operations. Soon, "flexible" lending became the norm, and banks used subprime loans, which charge higher interest rates, to cover the added risk.

But it wasn't enough. So Clinton ordered HUD to pressure Fannie Mae and Freddie Mac to buy the higher-risk loans from private banks and lenders, while adopting the same "flexible" credit standards. By 2000, HUD had mandated that low-income mortgages — including CRA-related loans — make up half of their portfolios.

To further spread the risk, Clinton legalized the securitization of such mortgages. In 1997, Bear Sterns securitized the first CRA loans — $385 million worth, all guaranteed by Freddie Mac. Thus began the massive bundling of subprime mortgages that wound up poisoning the entire industry.

The cause and effect is clear. As ex-Fed chief Alan Greenspan recently testified: "It's instructive to go back to the early stages of the subprime market, which has essentially emerged out of the CRA."

It strains credulity for top regulators to now say the CRA had "absolutely nothing" to do with the subprime crisis. It smacks of political spin and bureaucratic CYA."

Don't Blame Bush For Subprime Mess:  Housing Crisis: A new report from the Associated Press claims that the mortgage meltdown is due largely to President Bush's failure to act in 2005. Sounds plausible — until you actually look at the facts.
..."Here at IBD, we've done more than a dozen pieces — most recently, in yesterday's paper — detailing how rewrites of the Community Reinvestment Act in 1995 under President Clinton, along with major regulatory changes pushed by the White House in the late 1990s, created the boom in subprime lending, the surge in exotic and highly risky mortgage-backed securities, and the housing boom whose government-fed excesses led to inevitable collapse.

Despite this clear record, we're now besieged by enterprising journalists blaming Republican "deregulation" or the president's failure to recognize the seriousness of the problem or act. But these claims fall apart, as a partial history of the last decade shows.

Bush's first budget, written in 2001 — seven years ago — called runaway subprime lending by the government-sponsored enterprises Fannie Mae and Freddie Mac "a potential problem" and warned of "strong repercussions in financial markets."

In 2003, Bush's Treasury secretary, John Snow, proposed what the New York Times called "the most significant regulatory overhaul in the housing finance industry since the savings and loan crisis a decade ago." Did Democrats in Congress welcome it? Hardly.

"I do not think we are facing any kind of a crisis," declared Rep. Barney Frank, D-Mass., in a response typical of those who viewed Fannie and Freddie as a party patronage machine that the GOP was trying to dismantle. "If it ain't broke, don't fix it," added Sen. Thomas Carper, D-Del.
...In 2005, Fed chief Alan Greenspan sounded the most serious warning of all: "We are placing the total financial system of the future at a substantial risk" by doing nothing, he said. When a bill later that year emerged from the Senate Banking Committee, it looked like something might finally be done.

Unfortunately, as economist Kevin Hassett of the American Enterprise Institute has noted, "the bill didn't become law, for a simple reason: Democrats opposed it on a party-line vote in the committee, signaling that this would be a partisan issue. Republicans, tied in knots by the tight Democratic opposition, couldn't even get the Senate to vote on the matter."

Had they done so, it's likely the mortgage meltdown wouldn't have occurred, or would have been of far less intensity. President Bush and the Republican Congress might be blamed for many things, but this isn't one of them. It was a Democratic debacle, from start to finish."

Barney Frank's Bankrupt Ideas:  Financial Rescue: Democrats created the mortgage crisis by forcing banks to give loans to people who couldn't afford them. Now Obama and Biden want bankruptcy judges to bail out the same deadbeat homeowners. And once again, Barney Frank is helping.

..."On Sept. 11, 2003, the Bush administration proposed to Congress a new agency under the Treasury Department to assume supervision of Fannie and Freddie. The new agency would have had the authority to set capital-reserve requirements, veto new lines of business and determine whether the two quasi-government lenders were adequately managing the risk of their ballooning portfolios.

When former Treasury Secretary John Snow pleaded for Frank to support Fannie and Freddie reform, Frank responded: "These two entities — Fannie Mae and Freddie Mac — are not facing any kind of financial crisis. The more people exaggerate these problems, the more pressure there is on these companies, the less we will see in terms of affordable housing."

ACORN's Senator:  Election '08: Barack Obama wasn't just the second-largest recipient of Fannie Mae and Freddie Mac political contributions. He was also the senator from ACORN, the activist leader for risky "affirmative action" loans.

..."The CRA empowered regulators to punish banks that failed to "meet the credit needs" of "low-income, minority and distressed neighborhoods." It gave groups such as ACORN a license and a means to intimidate banks, claiming they were "redlining" poor and minority neighborhoods. ACORN employed its tactics in 1991 by taking over the House Banking Committee room for two days to protest efforts to scale back the CRA.

As a former White House staff economist writes in the American Thinker, Obama represented ACORN in a 1994 suit against redlining.  ACORN was also a driving force behind a 1995 regulatory revision pushed through by the Clinton administration that greatly expanded the CRA and helped spawn the current financial crisis.

Obama was the attorney representing ACORN in this effort. Last November, he told the group, "I've been fighting alongside ACORN on issues you care about my entire career."

"The future is not set.  There is no fate but what we make for ourselves."

michaelyon-online.com

This was before the Democrats were in control of congress.

Greenspan says ARMs might be better deal (USA Today, February 23, 2004)
More home buyers go with adjustable-rate mortgages (USA Today, March 30, 2005)
Scary days could be ahead for adjustable-rate mortgages (USA Today, April 4, 2005)
Some homeowners struggle to keep up with adjustable rates (USA Today, April 4, 2005)
More fall behind on mortgages (USA Today, April 3, 2006)
More homes are going, going, gone (USA Today, December 14, 2006)

Carbon Dioxide (CO2) is Not Pollution

The facts don't support you position:

Comptroller Dugan Says CRA Not Responsible for Subprime Lending Abuses (Reuters)
Fed’s Kroszner: Don’t Blame CRA (The Wall Street Journal)

- Only 6% of subprime loans were extended by CRA-covered lenders

Don’t Blame CRA (The Sequel) (The Wall Street Journal)
Sheila Bair: Stop Blaming the Community Reinvestment Act (U.S. News and World Report)

"Let me ask you, where in the CRA does it say to make loans to people who can’t afford to repay? Nowhere." - FDIC Chairman Sheila Bair

Carbon Dioxide (CO2) is Not Pollution