Could it Be?

The information clog might be breaking up. An editorial applauds the decreased Fannie Mae/Freddie Mac lending and concludes that we would be better off without the government in the mortgage guarantee business. An article describes the Dodd-Frank requirements for down payment and borrowing limitations related to income and other indebtedness. Ironically, these are the same lending criteria that existed for decades and were discarded by Fannie Mae and Freddie Mac in order to make it easier for everyone to own a home. Follow the trail. These agencies guaranteed the mortgages that met their non-criteria and called them sub-prime. The agencies were guaranteeing them so banks responded by making these absolutely secure, guaranteed by the US government loans. The agencies then bought the loans packaged them and sold the resulting securities that were based upon these absolutely secure, guaranteed by the US Government loans. As we are all so painfully aware, making loans with no credit criteria leads to defaults. As the loans defaulted, the securities plummeted in value and so did the derivatives which were based upon the government guaranteed securities. Increasingly, the finger is being pointed at the government’s involvement and attempt at social engineering. A new book on the financial crisis co-authored by a New York Times columnist/business and financial editor (!!!???), blames the central role played by Fannie Mae and Freddie Mac, as well as government policy that pressured banks into relaxing lending standards so that the "under represented" could buy homes they could not afford.
What is going on?