The underwriting standards should have been much much better, but that won't stop somebody from buying in a market that has had unsustainable appreciation and it won't stop somebody from using a more exotic adjustable rate or balloon mortgage over a standard fixed rate loan.
Should we have a financial aptitude test before somebody can get something other than a fixed rate loan? Perhaps, but until we do there isn't much of a solution.
People should be free to make the financial decisions they think are in their best interest. Inherent in that is a certain risk and reward.
When they are being lied to and pressured into signing very complex instruments, it's wrong to put all or even most of the blame on the customers who aren't trained in these matters.
There should be thousands of mortgage brokers and bankers in jail. Many made tons of money not caring what would happen to their "clients".
The banks were even worse. It's their fiduciary responsibility to look at every deal. They didn't care.
To absolve banks and crooked mortgage brokers is terribly unfair and short-sighted.