One of the largely unreported white collar crimes in the mortgage business is that loan officers inflate the income of marginal buyers so they are approved to buy a home they can not possibly qualify for.

Greed on the part of the buyer for supposedly inflated home valuation and greed on part of the mortgage lender for a juicy commission. The bank regulators looked the other way, the mortgage higher ups tacitly approved the practice and now with a declining real estate market buyers are bailing out in droves. Foreclosures are rampant.

Unsuspecting investors buy these mortgage obligations from brokers assuming they bought a sound investment. For instance Goldman Sachs , one of the top sellers of C.M.O.’s (collateral mortgage obligations) for the past few years sold about $100 billion to unsuspecting investors.

With the real estate decline, the bubble popped and everyone is looking for a scapegoat.

The real cause is the mortgage scams and lack of enforcement in inflating mortgage applications at the entry level. With the interest only mortgage obligations, greed on part of all parties involved perpetuated the fiasco.