The lack of government oversight occurred in the housing market -- specifically in the home loan business. It's sometimes referred to as the "subprime mortgage" crisis. Subprime mortgages were mortgages given to borrowers that didn't qualify for a conventional loan. They would be financed in ways that charged borrowers higher interest because of the risk or had large balloon payments later in the loan period. As a result, there was a "housing bubble" created, where many people had entered into home loans above what they could pay. When that bubble burst and the housing market crashed, it triggered the great recession.
You might check out the book or the film called "The Big Short" for an interesting study of what happened!
