That corrected it!!
It was definitely the mortgage industry, at the behest of the US Government, that ventured into high risk loans - allowing borrowers to make zero down purchases and loan to income ratios of upward to 7 to 1.
Couple that with 5 year ballons on most of these and the building industry producing new homes at the highest rate in history. The collapse was inevitable.
Government policy helped create a housing glut, artificially holding prices down and when these 5 year ballons come due, borrowers are either upside down, do not have the income level to refinance or both.
Uninformed borrowers and fly-by-nite lenders looking for 'easy profits' certainly did provoke this crisis and the U.S. Government (both parties) was only too glad to help as their re-election coffers kept filling up with money from builders and lenders alike.
The people who truly got screwed were those that played by the 'old school' rules. Save until you have the twenty percent down, take a mortgage less than 2 times your annual income, and make sure it is a 15 or 30 year fixed mortgage.
Seemed pretty damn smart until those who did exactly that saw their values plunge right along with the 'bad' borrowers, wiping out their equity.