mess, it's the financial engineers, no background check, and predatory lending that caused the mortgage mess. Not paying your mortage doesn't cause the flow of credit to collapse. It's the lender's responsibility to do a background check and verify income. That's like selling cars on credit to a complete stranger. Would you sell a car with no money down and a handshake? That's basically what banks did. It's not the buyer's fault that a seller foolishly sold them a car with no check. It is the buyer's fault that they didn't pay but the seller allowed the situation to happen. Banks and financial engineers sliced these poor investments up into packages and resold them as AAA rated bonds. Then insurers who didn't see what was happening lost big.
There are many ethical low income banks and mortages out there that served their own fiduciary responsibility but the difference is that these banks did their due diligence instead of snowballing in greed. See :newsweek article The law doesn't force banks to give out money blindly so don't blame it all on government either.
