...And I agree with your assessment, but it's just a small piece of the puzzle.
Think about this - If you have a way to sell a loan and not have to take the fall for a default, but yet make some money on the sale of the debt, you're going to do it every time, because you're in business to profit, not fail! So the gov't made it possible for banks to sell to people that could not really afford the loans, but the problem is the gov't didn't have the resources to back up the loans it gave the banks the ability to sell to poor risk borrower's.
That's not the banks fault!! That's not even "greed," it's common business sense.
Factor in the Cloward-Pavin strategy and the insanity makes sense.