Government guaranteeing the loans/losses is what sets these things into motion. It is easy to be careless with other peoples money. No sane person would do what these people did with their own money. There should have been no government guarantees and no government bail out. Freddie Mac, Fannie Mae and the others...
To blame all this on a lack of regulation is wrong.
There was plenty of regulation, regulation created by fools in congress.
[Government guaranteeing the loans/losses is what sets these things into motion.]
As of June 2007, None of Ameriquest/Argent Mortgage's loans qualified for underwritting by Freddy/Fannie.
Their predatory product was securitized and pumped into the Wall Street pipeline; evidently without any regulation at all - with the associated derivative exposure created BY THE MARKET to insure itself.
The securitization process effectively gave Ameriquest/Argent access to unlimited capital... but only so long as the pipeline was flowing into the bubble. Very clever.