The debacle that is the subprime crisis is said to be one of the worst in history, and sadly, I do not think we will learn enough from it. There are many factors that contributed to this situation and I will try to focus on a few I feel are most important. I realize that this is a finance class and the focus should be on the financial institutions aspect, however, this scenario played out in the real world where there are almost infinite variables. As a 1st generation immigrant, I can appreciate the spirit of this lending; it has allowed many illegal aliens in my eastern European community to be able to purchase a house regardless of the fact that they couldn’t document income since the worked “under the table.” I know many families that were able to take advantage of this when it had initially started and are still happily in their own home, however, I know almost as many that got a 5-yr ARM loan about 5 years ago that have now lost their home. One of the things I feel could have been done differently to avoid this would have been to introduce some sort of regulation of the subprime loans; maybe place a limit to how much of your loans can be in it. I know the chances of this happening would have been very small because we live in America and everyone has the right to make money how they see fit. I also realize that the case mentions there was no precise dividing line so it was difficult to measure the fraction. However, I believe that if effort had been put forth, regulations could have easily been established. There was too much faith by the people, by the government in the fact that the market will govern itself, and unfortunately, that was not the case. We cannot believe that corporations will work for the common good, WorldCom and Enron taught us that. For the most part, everyone acted like the housing boom would last forever; that nothing could happen to