Housing Red Flags Ignored - Emac's Stock Watch | Fox Business

Housing Red Flags Ignored | Fox Business: "One of the nation’s biggest mortgage industry players repeatedly warned the Federal Reserve, the Federal Deposit Insurance Corp. and other bank regulators during the housing bubble that the U.S. faced an imminent housing crash.

The trade group also mapped out the 15 states which faced 'sudden increases in foreclosures' and 'a downward spiral,' including California, Florida and Nevada.

But bank regulators not only ignored the group's warnings, top Fed officials also went on the airwaves to say the economy was 'building on a sturdy foundation' and a housing crash was 'unlikely.'

The letters, obtained by Fox Business, were sent in 2005 and 2006 before the housing bubble burst."

Not only was the government complicit -- they encouraged it.