Think about it: A few facts to remember about mortgage crisis

The important thing to remember as you look to figure out who to put in charge of revamping the U.S. financial system is that there is plenty of blame to go around.

Each party points to the other as the cause of the "collapse" and says its leaders have the expertise necessary to get the markets righted.

Neither is quick to jump up and claim any sort of credit for getting us here in the first place.

But here are some things to think about as you plan your next move when it comes to the economy and choosing a leader to get the job done.

The mortgage crisis was caused -- in part -- because of bankers and investors who bought into the real estate bubble and made loans they shouldn't have or who sank money into mortgage-backed securities.

But where did the push come from to make these risky loans?

What not too many people talk about is that this all started with government pressure -- mostly from Democrats -- to encourage home ownership. Relaxing the mortgage requirements made it possible for many people to own homes they could not afford -- or to get mortgages for significantly more than their homes were worth.

So, when the bottom fell out of the market, of course, banks were left with properties that were worth less and mortgage paper that was useless. You cannot sell a house to recoup a mortgage if no one is willing to pay the price.

And voila, a financial crisis.

Some Wall Street analysts say banks were pressured to increase loan percentages -- some say with threats of regulatory action if they didn't. That's why, some officials say, the loans were made at such a clip. And if you think about it, that sure sounds like it might be true.

There are more than a few Democrats with egg on their faces because of their connections to some of these policies and lenders.

Sen. Christopher Dodd is one of them. Check out his sweetheart deal with Countrywide.

Now, before you chalk up this whole thing up to bad loans, think again.

There is plenty of greed and stupid management in the financial community -- and there have been some bad decisions.

Calls for oversight have been made by some -- but not enough -- of those who are charged with leading this nation. It seemed like many Republicans did not step up when they should have.

See. Plenty of blame to go around.

Change is needed now, but there is more than one place to go to look for it. Make sure you know whom you are trusting with your financial future.

Published in Editorials on October 13, 2008 11:02 AM