Is Alan Greenspan to blame for the Housing crisis?

Recently, the National Association of Realtors (NAR) reported, ...

A record numbers of foreclosures (up 25% year over yera) helped drive down Phoenix AZ real estate more then 30%

It does not matter if you live . Whether you are rich, poor, or live in a different Country, when people lose money they like to point fingers of blame. It is ingrained in us as Americans not to be wrong, so it must always be someone else's fault.

Today, When it comes to the housing crisis, people are losing much of their net worth; especially in Greater Phoenix and there is some blame to go around.

So who really is to blame?

• Borrowers ? greed and buying more than they could afford?
• Lenders? greed in making money with easy underwriting?
• Banks ? packaging risky loans to Wall Street?
• Wall Street - ? selling pools of risky CMO's (collateralized mortgage obligations) to investors?
• Government -? - lack of regulation ?

A fantastic multi-part history of the Housing Crisis details the Roots of the problem.

A name that is now being talked about who may be the key factor is financial uber-guru and financial world icon, and some say ‘Rock Star' is Alan Greenspan.

Alan Greenspan, Head of the Federal Reserve and maker of monetary policy introduced lax lending standards to halt the inflation of the 1990's bull (stock) market.

After he achieved this goal with great success he was challenged by the dot -com bubble bust in early 2001 and then the tragic events of 9/11. What did he do to stimulate the economy you ask??

After 9/11 he continued to ease lending guidelines (think sub-prime) and more significantly, he started lowering interest rates and lowering interest rates and lowering interest rates.

Under Greenspan the Fed cut rates from 6.5 percent in late 2000 to 1.0 percent in mid-2003.

As interest rates continued to drop and sub-prime and alternative (Alt-A) mortgages became easily available, builders built and buyers bought and investors invested.

The Housing market began to grow in 2001 and boiled until 2005 and grow into the Real estate bubble that burst at the end of July of 2005.

Look at the bright side, Alan Greenspan sees the bottom in housing next year and he cannot be so far off 2 times in a row! Can he??