Certainly the Congress pushed hard to help citizens with less than perfect applications become homeowners, probably feeling that homeowning citizens were "better" citizens, and to a large degree, who could argue that?
That certainly helped fuel demand for housing, and began the price increases, and as folks scrambled to get a home FAST, the popularity of the crazy loans skyrocketed, along with their siren-like returns at least on balance sheets engendered greed and excess liquidity not just with the bankers, but even institutional investors. The results, at least in the first few years, were stratospheric, as we know, but all built on a shaky proposition....housing would keep going UP UP UP!
Then, the banking community scrambled to get a piece of the proverbial pie....even the most conservative banks either purchased a Sub Prime lender, or began offering the same types of products. Then, to insure enough demand for those products, (Remember, these loan products were generating HUGE profits on paper), the banks began offering loan officers 3 times the commissions or more for selling the sub prime loans, well, I am sure you know the "Rest of the Story".
But really, didn't everyone, including consumers, real estate agents, loan officers, bankers, congress, investors, hedge funds, european banks etc all get greedy and push the envelope? There is plenty of blame to go around, and plenty of folks that deserve part of that blame.
Jim Ryan, HSOA.
"WE have met the enemy, and he is us!" ( Pogo via Walt Kelley, Earth Day, 1970).