Cause for the Credit Crisis

Being a political year, everyone is trying to blame everyone else for the credit crisis problem that has grip the world. I found a Wall Street Journal article date September 30, 1999 that talks about the Clinton Administration encouraging Fannie Mae to extend home mortgages to people that would not qualify for a conventional loan. Fannie Mae does not originate any loans themselves but the set the conditions for the loan bundles that they buy. When they change the conditions on the loans the bank or organizations that originate the loans can loosen their conditions and sell these new "loosened" loan bundles to Fannie Mae. Full Article can be found here

This was not the only cause of the credit crisis but one condition that allowed the crisis to happen.