Housing Bubble - Part 2

In continuing our discussion of the causes of the housing bubble we must now turn our attention to the 

WOULD-BE HOMEOWNERS.

This group is often considered at fault, by many, because of their irresponsibly accepting a loan on homes that they know they have no chance of repaying in full over time.

But, I imagine, that most of them were told by the media and other resources at their disposal, that they should attempt to get a loan through certain programs, as this is now possible.

Is it within the realm of possibility that these programs were originated by those other sources, and promulgated through the media for the homeowners benefit, or those of others?

I look back at the time when they were told that they could make it and remember how everyone was told that "you should reach out for the American dream of homeownership and we are going to make that possible for you". This type of statement, and others that were made, make it seem likely that those would be homeowners were led down a path, which we now understand that they could not possibly succeed in, for an unknown reason.

But we also see that not everyone had blinders on because there were far more would be homeowners who either did not believe the reports or chose not to accept the easy path offered.

ARE ALL THREE TO BLAME?

As we have seen in the previous three areas of discussion, you can blame any and or all of the previous three areas.

The investors saw an opportunity to gain more money by utilizing the relaxed standards for loans themselves to complete deals that they would not normally be able to do. Or by helping those would-be homeowners to the programs that would assist them in selling their deal quicker for more profit by way of more deals. Therefore we see blame here for sure, but how much?The banks also led these would-be homeowners into the programs with the relaxed standards with the promise of help if things go wrong.

Some local banks that saw that if things did indeed go wrong the amount needed to cover them, as promised, the program could not possibly keep everyone on a solid foundation shunned this. Therefore, there must be blame assigned here as well, but again how much?

The would-be homeowners were actually led down that path by the investors who sent them to banks who led them to those programs that were unsustainable by their very nature. In my opinion there is not much blame here, but since many (maybe most) did not take those loans, there is also some blame here.

If none of these three are the real source than who is the real culprit in these matters. I hope to dive into this area in part 3.