You've nailed this down beautifully, Abe.  COnsumerism is a large part of the problem, especially when added to the instant gratification mentality many seem to have.  It was - wait and save for a 20% down payment; now (and Marchel above nailed it) it's why bother to wait when you can get 100% and even have the closing costs paid.

I know folks will blame lenders, but that's not fair either.  As soon as the first lender offered the program the rest had to in order to stay competitive.  And in fairness, they did penalized those with less than 20% down by requiring MI and higher interest rates, or high rate seconds.  And if the borrower was sub-prime the rate was higher yet and generally only fixed for 2 to 3 years before going to an ARM.  In so doing, the lender was providing impetus for the borrower to clean credit, pay faster, increase equity in order to bring the loan into a standard 80% or less lent configuration.

It's a tough call to say who was at greater risk, the lender or the borrower.  I feel that lenders, by and large, did a decent job of splitting the risk (the high rates were their impetus to do so).  Are lots of those loans the one's we see going into foreclosure - yes.  Did the lenders cause it - no.  Did the brokers cause it - no.  Did title agents cause it - no.  And neither did underwritiers, appraisers, taxation authorities, etc.  By and large foreclosures happens because folks make the decision to spend money on other things and end up missing mortgage payments.  In some case it is unavoidable, in many that's not the story.  Most of these folks never call the lender to ask for help or advice - even though the papers they signed at closing give this option. 

Lenders took a chance on these loans and are being bit in the backside for it.  Just about every lender I work with has therefore tightened up on high LTV loans, requiring more assets, higher credit, better job time, etc. to make the loan.  They have to to continue in business.