As a result by 1995 80% of sub-prime loans were being made by essentially unregulated independent mortgage companies or affiliates of banks or thrifts, which were subject - depending on their method of organization - to either minimal federal supervision (including CRT requirements)or to none at all.
As for underwriting standards, I've not seem more recent figures, but at least as late as 1995 there was little if evidence that loans made to archive CRT requirements were especially prone to non-performance, and I suspect that when this all shakes out the smaller, local institutions subject to CRT scrutiny will have been shown to have better evaluated borrowers than larger unrelated institutions such as Countrywide.
In an unregulated environment of ultimately securitized lending no-one was subject to long-term market discipline short of the melt-down we are now encountering. This was a quire straight-forward case of market failure, completely predictable, and likely to repeated in the future as it has been in the past once the current lessons are unlearned by financial engineers two generations hence.
Post #39 - Very well stated. Spot on.