Interesting read on the most likely cause of the increase in credit supply during the housing boom prior to the GFC.

Credit Supply and the Housing Boom
Alejandro Justiniano, Giorgio Primiceri, and Andrea Tambalotti
Liberty Street Economics, APRIL 20, 2015

In a nutshell:

… When savers and financial institutions are less restricted in their lending, the supply of credit increases and interest rates fall. Since access to credit requires collateral, the increased availability of funds at lower interest rates makes the existing collateral—houses—scarcer and hence more valuable. As a result of higher real estate values, borrowers can increase their debt, even though their debt-to-collateral ratio remains unchanged. These responses of debt, house prices, aggregate leverage, and mortgage rates match well the empirical facts illustrated in the previous four charts. We conclude from this experiment that a shift in credit supply, associated with looser lending constraints, was the fundamental driver of the credit and housing boom that preceded the Great Recession.