Subprime blame game

Some 2.4 million homeowners are in danger of losing their homes, many because of bad subprime loans. Critics are pointing their fingers at who is responsible - here are the main targets.

Regulators
Regulators
The charge: Government agencies such as The Federal Reserve did not use the authority granted them under the Home Ownership and Equity Protection Act to prohibit substandard lending practices.

Federal regulators came in for a large share of subprime blame during a series of Congressional hearings in March. Christopher Dodd, Democrat from Connecticut and, perhaps not coincidentally, presidential candidate, accused regulators of being "asleep at the switch" when they allowed lenders to push hybrid loans with low initial rates that would spike in future years.

Harry Dinham, president of the National Association of Mortgage Brokers, says, "The majority of these loans were being done by companies like New Century and Countrywide that were not under the control of bank regulators."

Furthermore, there's nothing inherently wrong with the loan products themselves, according to Dinham. "They were designed to give the credit-challenged a chance," he says. "To see if they could make it."

Regulators were following a policy that they hoped would help increase home ownership, a goal regularly lauded by politicians.

Bottom line: Regulators could probably have acted sooner to stem the worst abuses.

Mortgage brokers

Appraisers

Regulators

Lenders

Wall Street

Agents

Borrowers
Now more than ever it pays to be a prime borrower - here's how to be that guy. (more)
Housing activists say families that have mortgages with questionable terms should be given six months to work out deals. (more)
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Market indexes are shown in real time, except for the DJIA, which is delayed by two minutes. All times are ET. Disclaimer Morningstar: © 2014 Morningstar, Inc. All Rights Reserved. Disclaimer The Dow Jones IndexesSM are proprietary to and distributed by Dow Jones & Company, Inc. and have been licensed for use. All content of the Dow Jones IndexesSM © 2014 is proprietary to Dow Jones & Company, Inc. Chicago Mercantile Association. The market data is the property of Chicago Mercantile Exchange Inc. and its licensors. All rights reserved. FactSet Research Systems Inc. 2014. All rights reserved. Most stock quote data provided by BATS.