I agree with the first premise.

IIRC, there was some effort by congress to require lending institutions (Fannie Mae?) to slack off on their credit requirements.

People were bamboozeled. If the house boom had been mostly about affordable housing for those who wanted it and the lenders were not allowed to write, bundle & sell crappy mortgages, this might have been a good thing. Also, people used thier house's already inflated value like an ATM, thus piling more debt on top of poor valuation. There was no sane reason for the market to keep rising by such massive amounts every year. It was a game played by teh mortgage companies and they reamed the people greatly. many more of them should be in prison for the scam they pulled.