Excellent 12 minute short overview by 60 minutes coverage of the current situation.
"Because, perhaps they didn't understand the underlying risk, and nobody really saw the effects that were going to flow through from the subprime lending situation,"
There was major alarms by industry hawks, economists, and bloggers back in early 2006.
A TRUTH stated is:
"Somehow, through, I will call it a criminal neglect and incompetence, the people at the top of these firms chose to look away, to take more risk, to enrich themselves and to put the shareholders and, indeed, the country, itself, ultimately, the country's economy at risk. And it is truly not only a shame, it's a crime." "
NY Times indepth coverage of Fannie Mae Risk-taking (NYTimes should have posted this article 3 years ago....)