Who is responsible for the current financial crisis?

The financial community is not the sole cause of the current crisis. It did what Congress wanted it to do, i.e., make risky loans to homeowners who would not otherwise get a loan in the unregulated mortgage market. American consumers were encouraged to buy homes whether they could afford them or not. Homeowners were also under the mistaken belief that homeownership was an investment, and not a housing expense. The annual costs of homeownership with mortgage payment, property taxes, insurance, utilities and maintenance can be over 10 percent of the value of a home. That means a home has to appreciate more than 10 percent annually in order for it to be a good investment.
 
These housing policies significantly contributed to driving up the prices of residential real estate over the past 20 years. They also contributed to overleveraged homeowners and more risky mortgage loans held by banks and investors. However, it was the regulation of financial institutions that contributed to the bust of the housing bubble and caused the financial crisis we have today.