Subprime: Let the finger-pointing begin!

Point your finger at mortgage brokers and appraisers, and they will quickly point theirs at the banks and mortgage companies. "Our industry shouldn't take any more blame than lenders and Wall Street," says Peter Ogilvie, president of the California Association of Mortgage Brokers.

To hear Ogilvie tell it, his mortgage brokerage, based in Los Baños, Calif., would often refuse to touch loans proposed by well-known banks, because the terms were so disadvantageous. One mortgage he says he declined was to a non-English-speaking, single-parent strawberry-farm worker, who was expected to pay around $12,000 a month.

Once they'd made all the loans they could reasonably make to qualified borrowers, the banks began relaxing the rules and reaching further down the credit scale. No income? No job? No assets? No problem! The industry even came up with a cute acronym for such deals: NINJA loans.

Many lenders are paying a price for such recklessness. Dozens of mortgage companies have gone bankrupt, including American Home Mortgage. And Countrywide Financial, the nation's largest mortgage lender - responsible for nearly one of every five mortgages in the U.S. - has seen its stock crater amid concerns that it will become a victim too.

Senator Barack Obama thinks the industry should pay more: He wants to fund a homeowner relief program by fining lenders "that acted irresponsibly or committed fraud." The mortgage providers made billions from the boom. And judging risk is at the very heart of what they are supposed to do. Otherwise, why not just hand the money out to anyone who asks for it? Oh, wait ... they did.