GFC - Blame for Toxic Mortgages

I've heard a lot of people bagging consumers for their choice in crappy mortgages as the prime reason for the GFC and whilst they have some blame to share, it's been clear that the banks hold a responsibility - and this piece in the Economist with Robert Reich sumed it up perfectly:

DIA: In America, there's a lot of anger aimed at corporate executives, especially in the finance industry. But by buying houses they couldn't afford, weren't American consumers complicit in fomenting this crisis?

Mr Reich: Yes. But the important question to ask, in terms of avoiding a repeat of this fiasco in the future, is which of these parties -- financial executives and mortgage lenders, or american consumers who took out over-sized loans -- were in the best position to know the risks involved and to avoid them. Many consumers had no idea what they were getting into. Mortgage lenders and the financial industry behind them had every reason to know.

One has to wonder how much impact the trend to on-sell mortgages had in this problem as many of the retail banks no longer maintained an on-going interest in the mortgages they granted. In fact, there's some talk that banks ONLY interest in the mortgage was for the $800-odd in fees levied at the start of the loan - everything after that was on-sold to a third (or as we've discovered, 3rd, 4th, 5th, 6th ...) party.