[Jan_Sobieski]

What could motivate a bank to make a loan that they know the borrower can not pay? Banks would become insolvent if they did not discriminate between people that can pay and those that cannot. Only in an environment where a government regulation with government assuming all the risk would a company do this! Government meddling in free markets is at the root of virtually all bubbles

[Sam Gamgee]

The risk was passed on by selling the mortgages to investment banks who then packaged them in tranches and then sold them off to unsuspecting pension funds, AIG, ect, as Moodys rated them AAA, when only 20% was in fact triple A quality.

But yes government was part of it, because they were just happy to make sure every one had a right to a home.