One of the great misconceptions about the foreclosure crisis, collapse of the banking industry, and resulting economic depression has been that there was just too little regulation of the mortgage and financial sectors of the economy. Unfortunately, the exact opposite has tended to be the case, with so many laws, rules, and regulations that it would be almost humanly impossible for any company or individual to know them well enough to be able to follow them.

In fact, the vast number of federal laws designed to regulate the housing market and consumer lending industry have served to lull home buyers and owners into a false sense of security, rather than provide effective controls over the economy. While some regulations were meant to restrict lending to those who could not afford to pay back their loans, other actions taken by legislators and regulators have directly encouraged such lending.

Thus, homeowners now facing foreclosure who put trust in the federal regulatory structure to help them save their homes may discover that these agencies participated in the housing boom by encouraging artificial price increases. Now with the collapse of the bubble and accompanying declines in home values, these same bureaucracies are being given hundreds of billions of dollars to assist homeowners in solving a problem they originally helped create.

The following is a list of just some of the federal or semi-federal organizations or regulatory bodies that had relevancy to the housing market, all of which failed to see the bubble, predict the collapse, or deal effectively with the fallout from rising foreclosure rates:

Conference of State Bank Supervisors Federal Financial Institutions Examination Council Federal Reserve Board and Federal Reserve System Federal Housing Administration Department of Housing and Urban Development Fannie Mae Ginnie Mae Freddie Mac Office of Federal Housing Enterprise Oversight Fair Housing and Equal Opportunity Office United States Treasury Financial Crimes Enforcement Network Federal Trade Commission Office of the Comptroller of the Currency Office of Thrift Supervision National Credit Union Administration Department of Agriculture Veterens Administration Department of the Treasury

And these are only the regulators that had relevancy to the housing market. Other agencies such as the Securities and Exchange Commission had more oversight over the financial investment firms, hedge funds, and banking giants. These were the companies that did so much to inflate the bubble and spread the risk of the collapse to overseas markets and throughout the entire American economy. Semi-private companies like the credit ratings agencies are also absent from the above list.

Could any more regulation possibly have stopped the banks from wrecking havoc over the entire economy? There have been armies of federal bureaucrats sitting in offices throughout the country who were taking taxpayer money in exchange for overseeing the housing market and financial sector of the economy. Instead of providing effective regulation, they fostered the false sense of security so many homeowners and investors mistakenly bought into.

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