It also tells us that problems with U.S. housing policy or markets do not by themselves explain the U.S. housing bubble. Total home equity in the United States, which was valued at $13 trillion at its peak in 2006, had dropped to $8.8 trillion by mid-2008 and was still falling in late 2008.The crisis in Europe generally progressed from banking system crises to sovereign debt crises, as many countries elected to bail out their banking systems using taxpayer money. Some elements of TARP such as foreclosure prevention aid will not be paid back.
(source: McLean and Nocera, 80%. It was absurd. "As the shadow banking system expanded to rival or even surpass conventional banking in importance, politicians and government officials should have realized that they were re-creating the kind of financial vulnerability that made the Great Depression possible – and they should have responded by extending regulations and the financial safety net to cover these new institutions. In many markets, prospective buyers are continuing to rent due to concerns over affordability. The authors argued that this investor-driven narrative was more accurate than blaming the crisis on lower-income, subprime borrowers.In the years before the crisis, the behavior of lenders changed dramatically. Loans made by CRA-regulated lenders in the neighborhoods in which they were required to lend were half as likely to default as similar loans made in the same neighborhoods by independent mortgage originators not subject to the law." During the later part of the Clinton Administration, HUD Secretary "The National Homeownership Strategy: Partners in the American Dream", was compiled in 1995 by Henry Cisneros, President Clinton's HUD Secretary.

One of its eight working groups, the Residential Mortgage Backed Securities (RMBS) Working Group, was created in 2012 and is involved in investigating and negotiating many of the fines and penalties described above.Several books written about the crisis were made into movies. The number of new homes sold in 2007 was 26.4% less than in the preceding year. Research indicates recovery from financial crises can be protracted, with lengthy periods of high unemployment and substandard economic growth.For example, U.S. federal spending rose from 19.1% GDP in fiscal year (FY) 2007 to 24.4% GDP in FY2009 (the last year budgeted by President Bush) before falling towards to 20.4% GDP in 2014, closer to the historical average. Ratings arbitrage, Wall Street called this practice. Critics claim that the use of the high-interest-rate proxy distorts results because government programs generally promote low-interest rate loans—even when the loans are to borrowers who are clearly subprime.As part of the 1995 National Homeownership Strategy, HUD advocated greater involvement of state and local organizations in the promotion of affordable housing.As early as February 2004, in testimony before the U.S. Senate Banking Committee, Alan Greenspan (chairman of the Federal Reserve) raised serious concerns regarding the Whether GSEs played a small role in the crisis because they were legally barred from engaging in subprime lending is disputed.Insofar as Fannie and Freddie did purchase substandard loans, some analysts question whether government mandates for affordable housing were the motivation. En effet, lorsque les premiers retards de paiement sont survenus, les banques ont saisi les biens immobiliers achetés avec les prêts, pour se rembourser. The total amount of mortgage-backed securities issued almost tripled between 1996 and 2007, to $7.3 trillion. But never mind: the rating agencies, who were paid fat fees by Goldman Sachs and other Wall Street firms for each deal they rated, pronounced 80% of the new tower of debt triple-A." After researching the default of commercial loans during the financial crisis, Xudong An and Anthony B. Sanders reported (in December 2010): "We find limited evidence that substantial deterioration in CMBS [commercial mortgage-backed securities] loan underwriting occurred prior to the crisis. Concerns regarding the stability of key financial institutions drove central banks to take action to provide funds to encourage lending and to restore faith in the The risks to the broader economy created by the housing market downturn and subsequent financial market crisis were primary factors in several decisions by central banks around the world to cut interest rates and governments to implement economic stimulus packages. For example, according to the However, with the exception of Germany, each of these countries had public-debt-to-GDP ratios that increased (i.e., worsened) from 2010 to 2011, as indicated in the chart shown here.

Aux États-Unis, l'État s'est résolu à procéder à la Dans la semaine qui avait précédé, les marchés boursiers européens avaient tous perdu plus de 20 %. According to the Economist Paul Krugman analyzed the relationship between GDP and reduction in budget deficits for several European countries in April 2012 and concluded that austerity was slowing growth, similar to Martin Wolf. First, "stated income, verified assets" (SIVA) loans replaced proof of income with a "statement" of it. Their bonuses were heavily skewed towards cash rather than stock and not subject to "Derivatives such as CDS were unregulated or barely regulated. (New York, NY: Algora Publishing, 2012), p. 218.Joseph Fried, Who Really Drove the Economy Into the Ditch?

Further, major investment banks which collapsed during the crisis were not subject to the regulations applied to depository banks. Various agencies and regulators, as well as political officials, began to take additional, more comprehensive steps to handle the crisis.