Greed on the bank's part for making deals that were a little shady. But in the boom times, everyone was paying their mortgage and foreclosures were low. Jumbo loans, subprime loans, they seemed to be working out just fine.
Greed on the consumer's part for buying houses that were too much for them to afford and spending money they didn't have with credit cards.
It didn't really make sense that the economy was chugging along fueled by money that didn't really exist, but it appeared to all be working fine, until a few chips appeared in the foundation and it was revealed that it was all a house of cards.
The economy goes through periods of boom and bust. It wasn't caused by any one single factor such as a greedy banker.
The national (and world) economy is incredibly complex. To try to point the finger at one "bad guy" is simplistic thinking.
It's not just the banks.
buysers and borrowers "created" neccessary details on the loan apps... and Appraisal values were being approved with total ease. Creating loans and getting loans were super easy and were approved on false income, credit and other figured.
The banks don't owe, it's a mutal upset due to poor regulations.
What did they do? Did the FORCE everyone to take out loans to buy houses the BUYERS knew they could not reasonably afford? Did they FORCE people to use phantom equity in their homes as ATM's?? I see the whole banking mess as a 50/50 split. You cannot hold the banks responsible for this mess and not hold consumers responsible as well. Claiming ignorance on the consumers part is ignorant in itself.
Ryan M - You are 100% correct. The banks were pressured to issue mortgages to some people who really didn't qualify and overbought their means. nostupid, what do you expect the banks to pay, and to who? They are the ones stuck with the foreclosures.