The true size of the American subprime problem was hidden for years by the defective bookkeeping of the GSEs. Fannie Mae was unable to get its books certified and had to stop reporting publicly between November 2004 and December 2006, pending an often delayed clarification of their accounts. Freddie Mac had had similar problems earlier. Not until the summer of 2007 did the full magnitude of the subprime problem begin to become apparent. Fannie's third-quarter write-offs almost quadrupled relative to the second quarter. Moreover, the source of loss did not become fully evident until September 2009, when Fannie Mae very belatedly disclosed significant reclassification of loans, from prime to subprime, dating back to loans that it had made and held in 2003 and 2004. More important, those revelations helped to explain how what was thought to be a relatively sound portfolio of prime conventional mortgages in mid-2007 could generate the huge losses Fannie and Freddie had been reporting.Which is what Ed Pinto, Peter Wallison, Charles Calomiris and others were saying. And was being denied by the likes of Paul Krugman and the denizens of Prof. DeLong's Semi Daily Journal virtually every the subject of the housing bubble arose.
Greenspan also notes that the Basel II international banking regulations reduced bank capital requirements, thus causing leverage to balloon. Something that the AEI's Peter Wallison predicted would happen (and the usual suspects denied vociferously).