Former Federal Reserve Chairman Alan Greenspan acknowledges he failed to recognize early on that an explosion of mortgages to people with questionable credit histories could pose a danger to the economy. In an interview, Greenspan said he was aware of “subprime” lending practices where homebuyers got very low initial rates only to see them jacked up later, causing severe payment shock. But he said he didn’t initially realize the harm they could do. “While I was aware a lot of these practices were going on, I had no notion of how significant they had become until very late,” he said in a CBS “60 Minutes” interview to be broadcast Sunday. “I really didn’t get it until very late in 2005 and 2006,” Greenspan said. An excerpt of the interview was released Thursday. As Fed chief, Greenspan’s handling of the economy had earned him monikers, including the maestro, the greatest central banker who ever lived and the second-most important person in Washington. Yet, some wonder whether the Greenspan Fed could have done more to prevent lax lending standards, bad loans and other problems that have since come to light in the subprime mortgage market. A meltdown in that market has rocked Wall Street. Foreclosures and late payments have soared and lenders have gone out of business. Nervous financial institutions tightened credit standards, making it harder for even more creditworthy borrowers to get financing. This has increased chances the economy might slide into a recession. Greenspan, who ran the central bank for more than 18 years, left in 2006. His successor, Ben Bernanke, has had to deal with a credit and financial crisis stemming from the subprime mortgage mess. When he was at the helm, Greenspan maintained there was little the Fed, which also oversees the safety and soundness of banks, could do about the subprime situation. One of the Fed’s governors, however, had raised a red flag about questionable lending practices. “Well, it was nothing to look into particularly because we knew there was a number of such practices going on, but it’s very difficult for banking regulators to deal with that,” Greenspan said. Some blamed Greenspan’s interest rate policies for feeding the housing frenzy. The Greenspan Fed from early 2001 to the summer of 2003 had slashed interest rates to their lowest level in decades. It was done to rescue the economy from the blows of the bursting of the stock market bubble, the 2001 recession, the Sept. 11 terror attacks and a wave of accounting scandals that shook Wall Street. Critics say the Fed kept rates too low for too long, encouraging a Wild West mentality in housing. Greenspan, however, defended the institution’s actions. “They are mistaken,” he said of the critics. “It was our job to unfreeze the American banking system if we wanted the economy to function. This required that we keep rates modestly low,” he said. 160Want local news?Sign up for the Localist and stay informed Something went wrong. Please try again.subscribeCongratulations! You’re all set! MORTGAGES: Former Fed leader says he failed to see danger to the economy of the pending payment shock. By Jeannine Aversa THE ASSOCIATED PRESS Even the maestro didn’t see it coming.