just a couple of notes:
#1 - Lehman was able to get into the mortgage lending biz because of the repeal of Glass-Steagal (of course, our regulatory framework was built for a pre-Glass-Steagal world)
#2 - The Community Reinvestment Act was a Carter idea. Clinton catered to the black vote by essentially supercharging Fannie & Freddie to use that Act to pump money into inner cities (which big city mayors love too)
#3 - rates were low around the world. The perfect storm aspect to this is unrivaled but then so it the potential damage. You have to include the timing of the 2005 tax bill which finally freed up real estate to be sold by zeroing out cap gains taxes on home sales. Real estate had been essentially stagnant since the S&L crisis when Carter devalued all real estate assets and caused the S&L industry to suddenly become under-collateralized.
There are a handful of a major factors in real estate alone which could have been overcome if not for the now discovered 40-1 leveraging by Lehman and others of each mortgage they packaged into LBOs, CDOs and other bond instruments. Nobody in their right mind would leverage an asset 40 times to 1. Apparently, the idea of a UCC search doesn’t exist for financial instruments or a title search on a piece of property. Investors in these mortgage backed investments likely had no idea they were sharing their collateral with an entire football team worth of other investors. So much for transparency.