In the 1990's the Clinton Administration revised the Community Reinvestment Act to allow "community groups" to hold banks hostage to a CRA rating.  A single complaint would deny banks the ability to open new branches, merge or expand.  At the time, this was identified as a trillion dollar extortion scheme.  

Lenders resisted because they could not to keep these loans in their own portfolios and could not sell them on the secondary market because the underwriting standards did not meet Fannie Mae and Freddie Mac guidelines.

Community groups such as ACORN lobbied their Democrat allies in Congress who, in turn, convinced Fannie Mae and Freddie Mac, headed by former members of the Clinton administration, to purchase loans with virtually zero underwriting requirements.

Once the GSE’s dropped underwriting standards the entire mortgage industry was compromised and a flood of sub-prime loans were made and sold to the GSE’s and created "the housing bubble."

Historically, a mortgage was as “good as gold” or nearly as good as a Federal Note, Bond or high grade Corporate Bond.  Historically, underwriting standards were high and Americans paid their mortgages.  So, when Fannie and Freddie sold MBS's (Mortgage Backed Securities), the buyer was getting what could reasonably be thought to be a security backed by a mortgage written under the “gold-standard” from a source backed by the United States Government.

Buyers of the MBS's then sliced, diced and packaged Collateralized Debt Obligations (CDO's) and sold them.  As additional comfort in the safety of the CDO's they were covered by Credit Default Swaps (essentially insurance against the CDOs going into default).

Unfortunately, hidden in the salad (a group of mortgages that made up the MBS) was a piece of toxic lettuce (a sub-prime loan or loans either in default of likely to default).  No one knew where the toxic lettuce was.  So, when foreclosures began to rise and yields began to drop the whole system began to fall apart because the underlying assets were suspect.   On top of this, Sarbanes-Oxley required assets to be "marked to market".  So, a single sale of an asset would trigger the stated asset value of all similar assets to be re-set at the amount of the last sale, even if the holder had no intention of selling the asset in the near future.

Since banks are required to maintain a 10 to 1 asset ratio, this meant that banks had to raise cash to make up for the paper loss in asset value which meant they had to curtail lending, creating the “credit crisis”.

As defaults and foreclosures accelerated an enormous amount of asset value was destroyed and the ripple effect spread throughout the world’s financial system.

What this all boils down to is that Democrats funneled cash to ACORN (for example) through grants for various purposes and for counseling low and middle income borrowers on obtaining mortgages.

ACORN used the grants to contribute to Democrat political campaigns, fund voter registration fraud campaigns (according to the Commonwealth of Virginia, 86% of voter registrations submitted by ACORN's Project Vote in Virginia were fraudulent) and also fund professional lobbyists who lobbied Democrats in Congress to get the GSEs to buy sub-prime mortgages.  The GSEs complied and the result is world-wide financial collapse.

All the complaints about unregulated CDOs and such ignores the fact that they would not exist in the first place if the mortgage underwriting standards had not been compromised.

The number of ways that this story has been spun to discredit “a Republican regime of de-regulation”, “myopic Reaganomics” and “outdated conservative ideology” can't be counted.  Not only that, it is, has and will be used to justify every imaginable left-wing, Democrat, socialist scheme.  And not a single voice is raised in opposition.

The “emergency” justified by the collapse of the financial system is the foundation of and will be the justification for everything the Democrat majority and Administration will propose. If no one is willing or able or interested in widely exposing this story, then Republicans and conservatives can look forward to a left wing Democrat majority for generations.   If an investigation will not expose this then something must.