The housing market didn't cause the recession. But the banks involved in the inflation of the housing market did....You said Dow plunged when Lehman went under. Guess why Lehman went under?
This is exactly why the Credit Unions are 100% fine. They did not go after the poor people that couldn't afford a loan with predatory/subprime lending.
You can blame the banks entirely for the issue, but if that was the case, then why (like you said) didn't this happen 20 years ago? Simple answer: The securities didn't exist until banks took on higher-risk mortgages due to the changing of laws involved in the CRA. The government incentivized the securities by backing them through Fannie Mae and Freddy Mac, which are government owned.
Who traded around mortgages as securities? Fannie Mae. They owned or guaranteed 50% of the entire mortgage market in 2008. When you have a government entity that is doing that much work to assure you....Then why not go after the extra buck from high-risk homebuyers?
Back from the dead, I'm afraid.
