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Originally Posted by Flames Fan, Ph.D.
Generally agreed.
But let's not forget the role of the mortgage servicer. With the housing bubble, many of these guys explicitly tried to get more and more people into homes so that they had more mortgages to bundle up into new derivatives.
Their culpability in all this is further strengthened by the current mess that is surrounding the origination of loans, who owns what, robo-signing, etc...
Certainly people who didn't read or comprehend their mortgage contracts* and those being financially reckless played an important role. However, the servicer had all the motivation in the world to make sure that the customer be fit into a mortgage, regardless of the repercussions.
* I think this is why people like Elizabeth Warren have been popular in the public sphere. I'd like to think of myself as an educated guy, but there is probably no way that I could reasonably take a mortgage contract and understand its every detail by myself. Her push to simplify these agreements has a lot of appeal, imo.
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Plain language laws threaten the law makers and more importantly, the interpreters of the law. The cynic in me thinks that while this is a great idea, it will never happen.