The Securities and Exchange Commission's lawsuits against six top executives of Fannie Mae and Freddie Mac, announced last week, are a seminal event.

Efforts to blame the banks for the financial crisis are failing because they are not supported by data. The key fact is that, by 2008, before the crisis, half of the 54 million mortgages in the U.S. financial system were subprime and other low-quality mortgages.

Sir, Edward Luce's description of the competing views in the US about both the financial crisis and a supposed "crisis of capitalism" was a caricature, particularly his discussion of the view he ascribed to the Republicans ("America's three views on the crisis", March 19).

When the bubble deflated in 2007, an unprecedented number of weak mortgages went into default - those that were held or guaranteed by Fannie and Freddie, and those that had been securitized by Wall Street. This drove down housing prices and threw Fannie and Freddie into insolvency. 

The Federal Reserve's proposed rules on mortgages are likely to head off far more costly legislation, especially if foreclosure rates head for the stratosphere in coming months.

Discolsures contained in SEC complaints further validate the necessity to look behind Fannie and Freddie's characterization of subprime loans.  

In order to overcome the subprime mortgage bust, we must help borrowers to become more competent and informed.

Now that the worst of the housing slowdown is over, potential homeowners have something new to worry about: the subprime mortgage market.