A Banker Speaks, With Regret - Nicholas Kristof

http://www.nytimes.com/2011/12/01/opinion/kristof-a-banker-speaks-with-regret.html?_r=1&pagewanted=all

This article is making the rounds this morning. A confession of sorts from a banker that they, not borrowers, bear the blame for the financial crisis.

As a regional vice president for Chase Home Finance in southern Florida, Theckston shoveled money at home borrowers. In 2007, his team wrote $2 billion in mortgages, he says. Sometimes those were “no documentation” mortgages.
“On the application, you don’t put down a job; you don’t show income; you don’t show assets,” he said. “But you still got a nod.”

“The bigwigs of the corporations knew this, but they figured we’re going to make billions out of it, so who cares? The government is going to bail us out. And the problem loans will be out of here, maybe even overseas.”
One memory particularly troubles Theckston. He says that some account executives earned a commission seven times higher from subprime loans, rather than prime mortgages. So they looked for less savvy borrowers — those with less education, without previous mortgage experience, or without fluent English — and nudged them toward subprime loans.

In other words, the money was so good that no one bothered to look where it was taking them, and so they lied to people in order to get their money, all the while planning on government intervention if something went wrong. I don't necessarily exonerate borrowers, but to insist that the borrower know as much as the banker or mortgage broker in order to avoid being ripped off is the same as asking the banker to know as much about his car as the mechanic, and that the mechanic is under no ethical duty but is in fact obligated to try to get as much money from you as he can.