The sub-prime borrower was the victim in this debacle (Opinion)

Forbes.com - Don't Blame the Borrowers

The common rhetoric was that the sub-prime debacle was caused by people rushing into home ownership who shouldn't have been there in the first place. Yet first-time home buyers accounted for around 10% of the sub-prime mortgages issued. Nearly 4 times that amount were issued to people buying second (or more) homes. (Evidence for this is given in a hyperlinked white paper.) Other sub-prime lending went to refinances of existing homes that borrowers used to pay down credit-card debt, put on an addition, pay for college, lower their monthly payment, etc. This article argues that mortgage lenders and salespeople used three main tactics to lure homeowners into sub-prime loans: bait-and-switch salesmanship, breaking the appraiser system, and inflating a borrower's income claims. This article argues the commonly-held view that salespeople are liars. The second abuse is blackballing honest appraisers and providing financial inducements to those who rubber-stamped an appraisal. The last issue was getting borrowers to misstate upwards their incomes so they could qualify for larger and larger loans (to pay for higher and higher house prices). In many cases, the broker or lender just specified the income of the borrower, who trusted the process and signed on the dotted line.