New Research Says The Subprime Crisis Would Have Happened Even Without Predatory Lending
An upcoming study in the Journal of Financial Economics found that "predatory lending was responsible for only about a quarter of the default rate, suggesting it wasn't the most important driver of the subprime crisis," said co-author Itzhak Ben-David of Ohio State's Fisher College of Business (via Bloomberg's Matt Levine).
Then there's this new San Francisco Fed economic letter, which found that borrowers' "tendency to choose adjustable-rate mortgages is consistent with mortgage decisions based on economic considerations, rather than just lack of financial sophistication."
As Levine points out, these papers offer a different story of the financial crisis. It's a tale much more sympathetic to the lenders (less "predator," more "presenting borrowers with the opportunity to take perfectly rational risks").
History will have to place the blame.