Shady lending is part of the problem, certainly, but there’s a flip side component to the foreclosure crisis. Like the Great Depression, easy and cheap credit has helped fuel the fire this time around, and it’s not just the banks at fault.

It’s important to acknowledge the fact that this kind of behavior was common.

We should also keep in mind that it takes two to make a mortgage. If you and I can tell that pulling $400K of equity out of your $400K house is dangerous, the mortgage companies should’ve been able to as well.

I don’t have access to the WSJ, so I’m more passing this along for Ritholtz’s commentary and the comment thread attached which has a few diamonds in there. I love Ritholtz’s top line comment:

“To be blunt, I don’t think Standard & Poor has the stones.”

This is a somewhat technical post, but take a look at the volume of jumbo mortgages in CA along with what kind they are. It’s not a good situation.