Democrat: Why are We in this Housing Mess?

I read an article today laying out why we are in the housing mess that we are.  The writer, Orson Scott Card, is a Democrat and a newspaper columnist, and in this article he helps us understand what government decisions lead to the housing crisis we are in today.  He says”

This housing crisis didn’t come out of nowhere.  It was not a vague emanation of the evil Bush administration. It was a direct result of the political decision, back in the late 1990s, to loosen the rules of lending so that home loans would be more accessible to poor people.  Fannie Mae and Freddie Mac were authorized to approve risky loans. What is a risky loan?  It’s a loan that the recipient is likely not to be able to repay. The goal of this rule change was to help the poor — which especially would help members of minority groups.  But how does it help these people to give them a loan that they can’t repay?  They get into a house, yes, but when they can’t make the payments, they lose the house — along with their credit rating. They end up worse off than before. This was completely foreseeable and in fact many people did foresee it.

He then goes on to look at reporting which is not so much my concern today  — As a free-marketist (Is that a word?), I am not sure that having the government tell financial institutions who to make loans to gives us a solid financial footing in the long run…

What do you think?