“lax lending practices earlier this decade led to irresponsible lending and irresponsible borrowing.”

[rgG]

It takes two to tango. I get offers for more credit than I need, all the time. I don't take them up on the offer. Maybe you need irresponsible lending first, but without both parties coming to the dance, we would not be in this mess.

The borrowers are also at fault here. Many were greedy, other were stupid and some were both greedy and stupid. The same could be said for the lenders. The problem on both sides of the deal was that the parties directly involved were not the ones really taking the risk. The lenders were going to immediately sell the loan, therefore they didn't have to worry if the borrower could pay the money back. They were getting there money just for doing the initial paperwork. The borrower often had to put no money down, so if they couldn't make the payments, they weren't out anything either, except the hit to their credit score. Not enough personal risk was assumed by either of the two main parties to the transaction. The risk was pushed off to others who had no idea whether or not the original borrower could make the payments on the loan.

The rating agencies were also complicit by not accurately rating these mortgage backed securities, so many unsuspecting buyers bought what they thought were safe investments, when they weren't.