Housing Bubble or Mortgage Crisis Repeat?

A recent report says that 12 facts point to higher home price expectations as a fundamental reason why credit expanded during the housing boom, which eventually led to a mortgage crisis:  

• Fact 1:  Resets of adjustable rate mortgages did not cause the crisis 
• Fact 2:  No mortgage was designed to fail 
• Fact 3:  There was little innovation in mortgage markets in the 2000s 
• Fact 4:  Government policy did not change much from 1990 to 2005 
• Fact 5:  The originate-to-distribute (OTD) model was not new 
• Fact 6: MBSs, CDOs, had been widely used for decades 
• Fact 7:  Mortgage investors had lots of information
• Fact 8:  Investors understood the risks 
• Fact 9:  Investors were optimistic about house prices 
• Fact 10:  Mortgage market insiders were the biggest losers 
• Fact 11:  Mortgage market outsiders were the biggest winners
• Fact 12:  Top-rated bonds backed by mortgages did not become toxic

The availability of mortgage credit expanded during the housing boom and many people received mortgages for which they should not have qualified.  The report concludes that the housing bubble occurred because people believed that home prices would keep going up, the defining characteristic of an bubble. People were willing to take a risk if lenders were willing to loan the money. As long as the current loan underwriting remains in place, it's doubtful that a similar mortgage crisis would happen again.