In what way did Bill Clinton cause the 2008 mortgage crisis?

I think you are thinking of Barney Frank, not Clinton.

The typical Rush answer will be that banks were forced to give out bad loans (knowingly) and had no choice but to commit fraud in order to survive.

He did not. If so why did it take 8 years to show its head ?

For most of Clinton's years in the WH he had a Republican Congress.

It was called the Community Reinvestment Act (or something like that). You can find arguments that say it contributed to the bubble and others who say it didn't. It is moot at this point.

Sure.

Here is the real reason for the 2008 crash.. but it is a little complicated ..

Actually Bill Clinton [Democrat] /Greenspan had more to do with the 2008 mess than Bush. It's all about derivatives [betting that a growing company will fall] and Wall Street. Clinton made derivatives legal after 100 years. He had no idea what they could do. He said that later. Everything is simple once you understand it.

A derivative is like a football game .. the New York Giants are like a stock. Every week they play and they do better or worse. But, the fans in the stands also bet on the outcome - for or against. Giants team can lose but the fans can bet they will lose and win.

That is it. Home builders/banks could not lose. Government backing on one side .. high profits on the other with people who could not afford to buy a home. [In the end we all lost .. jobs and Trillions of dollars].

Today it is called longs and shorts. I trade every day.
http://www.cbsnews.com/2100-18560_162-4546199.html

Banks caused the swindle. They got a bailout and they write off their losses too. In effect, they get a taxpayer bailout twice

http://en.wikipedia.org/wiki/Gramm-Leach-Bliley_Act

The Gramm Leach Bliley Act of 1999 which was very bipartisan.  It was the final repeal of Glass Steagall and allowed for banks, inventments, and insurance entities to merge making them too big to fail.  Also included was the quota to sell to minorities to stop red lining or the institutions lost their rights to merge and use Fannie and Freddie.  This led to many sub prime mortgages which were bundled, sold as investments, and insured mostly through Freddie Mac and Fannie Mae which is how the lenders recouped their capital.  They also kept making housing appraisals higher and higher until finally they were too expensive and also the higher rates kicked in leading to those with sub prime mortgages to either lose their homes or to refinance with a similar loan, sometimes 3 times.  That is when it all came to a screeching halt.  

With nobody buying the houses and no toxic bundled mortgages to sell anymore, there was no way to recoup their capital so they went belly up.  Likely one of these huge institutions tried to sell everthing off all at once which led to the stock market crash.  This was all predicted before Clinton signed the bill.  

There are other factors such as fraud, lack of making people prove they could repay the loan, people who didn't understand their loans, etc, etc.  Clinton denies that is what happened but it seems pretty clear but there were other factors.  The fed should have been regulating the whole thing but failed to do so.  Also false reporting on the financials was a factor.  There should be a string of prosecutions related to it but instead the SEC is suing them.

The answer above is right.  Derivatives related to the housing is why there was more money lost than exists.

What you are talking about began with Jimmy Carter, and the "Community Reinvestment Act (CRA).  This law essentially "encouraged" banks and other lenders to make loans in underserved areas.  The law was designed to discourage discrimination in lending based on race and other factors.

(see first link below)

This law did not require banks to make subprime loans, but it did subject lenders to federal scrutiny - banks had to follow strict guidelines set by the CRA;  a bank's CRA compliance record was to be taken into account by the banking regulatory agencies when the institution seeks to expand through merger, acquisition or branching.  This gave banks more of an incentive to lend money in underserved areas.  

In 1994, President Clinton directed 10 agencies to issue an ultimatum to banks and mortgage lenders to ease credit for lower-income minorities or face investigations for lending discrimination and suffer the related adverse publicity. This ultimatum was signed by HUD Secretary Henry Cisneros, Attorney General Janet Reno, Comptroller of the Currency Eugene Ludwig and Federal Reserve Chairman Alan Greenspan, along with the heads of six other agencies. Mr. Clinton also ordered Fannie and Freddie to buy these mortgages from the banks.

(see second link below)

The ultimatum was then codified into a 20-page "Policy Statement on Discrimination in Lending" and entered into the Federal Register on April 15, 1994.

(See third link below)

The reality was that with this eased credit, banks weren't committing fraud (as some answers seem to imply).  The banks were violating their own credit and risk rules in order to comply with CRA standards or face stiff penalties and restrictions.  In order to compensate for this, Fannie Mae and Freddie Mac were backing these loans with the "Full Faith and Credit of the US Government"; in other words, the government's taxing authority.

Both Bill Clinton and George Bush gained a lot of political capital from this - they both bragged that "Individual Home Ownership Increased" under their administrations - but it was a house of cards.  

Chris Dodd and Barney Frank were in charge of Fannie Mae and Freddie Mac, but they were not only mismanaging it but taking bribes.  As chairman of the Senate Banking Committee, Chris Dodd has been investigated and censured because he and staff members received preferential treatment from Countrywide Mortgage - a clear violation of ethics.  

(see fourth link below)

By 2003, banks were practically giving away money.  During that time, I personally went over my own finances, wondering if I could afford a $5,000 home equity loan.  I called my bank to ask about the interest rates, and by the next day they had papers for me to sign for a $20,000 note.  I didn't even think I could afford the $5K but they didn't care - their loans were backed by the government.  

This led to people speculating on homes with essentially free money - which led to home prices spiraling out of control.  When the backers of this free money - Fannie Mae and Freddie Mac collapsed, it began what we know now as the mortgage crisis.  

Clinton was not the only player in this, but his "Policy Statement on Discrimination in Lending" and the demand that banks make these subprime mortgages was a major factor.