The consumers also helped the downfall by spending borrowed money. As someone that has been in the title and escrow business a long time, 2nd mortgages and lines of credit using a home's equity as a means for spending is somewhat new. I've had 4 files cross my desk today wherein the home owner's refi'd countless times over a 10 year period and then lost the home to foreclosure. One couple had owned the home for over 15 years but spent their way into the street with numerous lines of credit.
Yea, changes in banking rules helped lead the way to our current situation but they were responding to the demands of the consumer.