The US government is being civil charges against an investment firm for trafficking “troubled subprime residential mortgages”. The fact of the matter is that these subprime mortgages were invented and pushed by the US Government. There seems to be surprise that these loans were "troubled" . They were troubled by definition because they were subprime and they were subprime because there were no down payment or income requirements. That is what the government wanted. At the urging of Barney Frank, Andrew Cuomo and Chris Dodd et al, Fannie Mae and Freddie Mac dropped any kind of prudent lending guidelines so that anyone could qualify. The Financial industry did not change the rules for mortgage approval; the US Government did.
Government caused the problem and now more government intrusion is being sold as the way to resolve the problem that government intrusion caused. It is troubling that the Administration thinks that giving us more of the cause of the problem is the cure.