You would have had moral hazard with home buying, and people would have been incentivized to pay a lot more for their homes because the likelihood of a bailout

You would have had moral hazard with home buying, and people would have been incentivized to pay a lot more for their homes because the likelihood of a bailout would be good. At least with a central approach, regulators could come in and monitor. There wouldn’t really be a way for regulators to check home prices / the free market at such a massive scale.