If borrowers can't control themselves, then the lenders should. The crash happened because of untested CDO's (broadly) and at the heart of that was people borrowing vast sums against worthless properties. These people very promptly blamed the bankers - when really it was their fault for borrowing more than their properties were worth.
The properties weren't worthless when the borrowing was taken out. Affordability was the issue, not equity ratios.
The two key issues, as I see them, were:
Lenders accepting self-certification of earnings and mortgage brokers knowing that if earnings weren't effectively checked they could coerce clients into stretched (fraudulent) applications
The creation of mortgage products with discounted interest rates for the first few years, which then ramped up sharply (allowing brokers to say "don't worry, you'll be earning more by the time that happens").
But blue-collar earnings didn't rise (globalisation) mortgage-holders started handing back the keys to their houses as arrears grew, and the bank balance sheets cracked as mortgage defaults finally dragged down the CDO debt securities the mortgages were packaged into. And a decade later, the world is still dealing with the mess it grew into.
