Suddenly, the FedGov had a lot of worthless mortgage papers on their hands, and so bundled them and sold them as if they had value, when most of them were going to end up in foreclosure. The banks bought them thinking the gov was telling the truth, when they weren't. So, we had the housing bust - thanks to LIBERAL policies on housing. The rest is history. Except, the libs who didi it keep blaming the BANKS instead of government interference in the market.