Who's to blame for the credit mess?

Michael Brush at MSN Money provides a list of who is to blame for the credit mess. I'd like to just give you the names and then send you to the article for the reasons.

1. Alan Greenspan - Federal Reserve Chairman who encouraged the housing bubble and the shoddy loan underwriting
   
2. Countrywide CEO Angelo Mozilo - Mortgage broker who knew how badly the loans were being underwritten, but joined the crowd to maintain market share.
   
3. Christopher Ricciardi - he turned Merrill Lynch into the "Wal-Mart of the Collateral Debt Obligations (CDO) industry." He packaged the bad loans into securities (CDO's)and sold them. So did a lot of others, but he was the largest purveyor of crap.
   
4. Ralph Cioffi and Jim Kelsoe - Cioffi ran a hedge fund for Bear Sterns that was trying to buy higher than market-level interest returns to invest in, and borrowed money to do it. Kelso ran the biggest mutual fund specializing in subprime-related instruments at 'Regions Morgan Keegan Select High Income'
   
5. The ratings agencies - The three largest ones are 'Standard & Poor's',' Moody's Investors Service' and 'Fitch Ratings'. The rating agencies competed with each other to offer the highest ratings indicating that the debt instruments were secure investments. Institutions like Merrill Lynch would then give the business to the rating agency that promised in advance to give the highest rating. Since the rating agencies are paid by the institutions that sell the debt obligations, any rating agency that failed to give a high rating had no business and was not paid.
   
6. Mortgage brokers - Brokers are salespersons who get paid when they make loans. The more loans, the more pay. They were paid to lower standards so as to to generate more loans. When the decision was whether to refuse to issue unethical loans or to make more money, they went with greed over ethics. There is no oversight or licensing to ensure that loan standards are maintained. A large number of mortgage brokers are independent operators with no oversight at all.
   
7. The lawyers drawing up the mortgage-loan contracts - The contracts were so complicated that they knew that very few mortgage buyers would or even could read them, but they did not provide any summary of the dangers and risks involved in the contracts they were writing. The lawyers, like all the other players in the game, get paid only for loans that are sold, so they didn't want to warn the customers and run any off before they signed the contracts.
8. Add also the free market conservatives (both Republican and Democrat) - they object to government oversight of standards, procedures and ethics on a misplaced theoretical basis. A similar attitude towards not regulating banks prior to the Great Depression was a major cause of the disaster we call the Depression. Life insurance and health insurance had a similar history before the states began regulating sales, underwriting and issuance of policies. People would start companies, sell policies, collect premiums, then not pay off or even close the company rather than pay off. Sales of pharmaceuticals had a similar history of criminality and lack of ethics before the FDA was created.

This is not all of the individuals and groups who are at fault, but this is a representative sample.

A common thread through all of this is that the players only got paid for completed mortgages, and there was no regulation of any kind to maintain high underwriting standards. Is it any wonder that with all these players who got paid only when they completed a sale, there was a great deal of pressure to get everyone to finance or refinance homes? Alan Greenspan is first on this list for encouraging the use of ARM's and junk mortgages back in 2004,then taking no action to improve underwriting standards and quality of the mortgages being sold, among his other crimes.