> Why is there never any blame put on those on "main street" who took the loans that they couldn't repay?
They did repay them; they gave the bank their house back. In a non-recourse state (which California is), when you make a loan you the lender agrees that it will take the house at any time instead of the full value of the outstanding loan.
Given this, any sane lender wouldn't make a loan without a reasonable down payment to protect against any downside. The lenders however were giving no money down, no income, no asset loans where one didn't even have to pay the full interest (though it still accrued) for the first 5 years (and then selling them as quickly as possible to investors).
Don't forget selling the split up mortgage out of the back of the house before the ink was dry on the papers. So the people extending the note where not the people backing the note.
They did repay them; they gave the bank their house back. In a non-recourse state (which California is), when you make a loan you the lender agrees that it will take the house at any time instead of the full value of the outstanding loan.
Given this, any sane lender wouldn't make a loan without a reasonable down payment to protect against any downside. The lenders however were giving no money down, no income, no asset loans where one didn't even have to pay the full interest (though it still accrued) for the first 5 years (and then selling them as quickly as possible to investors).