Did Banking Create the Real Estate Crisis?

In my last post, I mentioned that Al Gore cited individual home loan foreclosures as the cause of the 2007 Real Estate Crisis.  That piqued my interest: what really happened, now that the dust has settled?

There were more foreclosures in 2006 than in 2005, and more in 2007 than in 2006. However, the general real estate market at that time was reasonably solid; there were buyers for homes and the economy was still growing.

I noticed that articles of that time seem to suggest that the lenders were the first symptom of the crisis. In particular, Countrywide Finance had made a lot of loans that created a problem for them. They were later taken over by Bank of America, and issues such as "robo-signing" of documents emerged.

The government then sued the both of them for fraud.

http://www.reuters.com/article/2013/10/15/us-bankofamerica-hustle-idUSBRE99E12C20131015
http://realestate.aol.com/blog/2012/10/25/bank-of-america-lawsuit-countrywides-unethical-lending-was-br/#!slide=865671
http://www.huffingtonpost.com/2012/10/24/bank-of-america-mortgage-fraud_n_2009791.html

So, I've completely changed my own understanding of the real estate crisis: private lenders made stupid loans, committed fraud and broke the laws, and stuck the U.S. economy with the bill. So much for the business cycle excuse.