Seriously, are you kidding me?

On March 2 of this year, federal banking regulators expressed their concerns that homeowners who buy or refinance using adjustable-rate mortgages may not understand these products' associated risks.

They didn't say this on March 2, 2002. Not March 2, 2003, 2004, 2005, or 2006. But in 2007.

I also understand that the National Transportation Safety Commission is about to come out with its groundbreaking study on how the design and construction of the Titanic might represent a risk to passengers.

It's unbelievable to me that regulators have the gall to come out with this now. Were they not in on the little jokes about the products that mortgage banks and brokers were selling? The so-called "liar loans"? Appraisal fraud? Have they not caught any of the "housing bubble" packages on Bubblevision in the past several years, detailing the degradation of credit requirements, the 103% LTV loans, any of this?

Did they not hear the thousands of radio ads or see the thousands of television ads enticing buyers to "get more house" for their money using interest-only and other negative amortization products? Wachovia Bank (NYSE:WB) ran ads locally that showed a house that you could get using some other bank, versus what you could get using their lending products. Come to Wachovia! You can get more house! Hear those ARMs getting ready to reset? Still think "more house" is the be-all and end-all?

Where the hell were these regulators in 2003, when you could get 30-year fixed mortgages at 5.5% and below?

That year, John Talbott wrote a book called The Coming Crash in the Housing Market, in which he described the unholy alliance that was causing housing prices to spike: declining credit-quality standards, low interest rates, and increased leverage. He also described how these same elements that had caused prices to rise would become the market's downfall. OK, he was early. But why in the world are our regulators late? Did none of them ever receive an offer on a "teaser rate" that made them just a wee bit curious?

"Hey, honey, the Fed called and said that this whatchamacallit loan we got when we refinanced for the eighth time in 2005 might make us go broke!" Seriously, what are people supposed to do about it now? According to First American LoanPerformance, 22% of subprime loans written in 2004 were delinquent as of November 2006.

Folks in housing have noted that home prices have never declined more than a few percent on a year-to-year basis. Every time someone mentioned a housing bubble, the folks at Toll Brothers (NYSE:TOL) or NVR (AMEX:NVR) just scoffed. But they seem to have forgotten that there's never been such an explosion of complicated and creative mortgage products on the market, not to mention such a robust collateralized mortgage obligation market to slice and dice the risk in such a fashion. Quite literally, no one knew how these new products had changed the market. But that didn't stop any of the participants -- not the regulators, not the lenders, not the secondary-market buyers, and no, not the borrowers, from using a damn bit of common sense. Everyone was making too much money. And now the regulators are trying to take away a punchbowl that someone's already peed in.

So now the Federal Reserve has put out guidance saying that lenders should approve loans only when they know borrowers can repay them. Brilliant.

As a result of the new "regulatory environment," newly brutalized lender Fremont General (NYSE:FMT) said that it's getting out of the subprime lending game. Other subprime companies, including New Century Financial (NYSE:NEW) and NovaStar (NYSE:NFI), have seen delinquencies rocket higher. Countrywide Financial (NYSE:CFC) noted that 19% of its subprime loans were delinquent at the end of 2006. That includes loans written in 2006.

It takes all sorts of partners to have made this tango go -- tons of greed and poor financial decisions to go around for lenders and borrowers alike. Inevitably, there will be hearings on Capitol Hill, replete with sad-sack stories from ordinary folks who have seen their finances and dreams crushed since they signed mortgages that they didn't know weren't appropriate for them. Many of these stories will be heartbreaking, brutal, and true. The weathervanes will cavil, preen, and show umbrage. There will be findings of fraud; there will be more "protections." It will be great television. Elections will be determined.

But unless I'm mistaken, any and all new rules will be promulgated by the same regulators who waited until everyone on the planet knew that there was irresponsibility going on in the housing market to mention it. In this case, the cow's out of the barn, out of the paddock, and truth be told, no one remembers the last time they saw her 'round these parts. Rumor has it she's living in a flophouse in Passaic. I hope the mortgage isn't delinquent.

Bill Mann is co-advisor of the Motley Fool Hidden Gems small-cap stock investing service. A free trial is yours for the asking. He owns none of the companies mentioned in this article. The Fool has a disclosure policy.