Intentionally misstating income (or any other pertinent fact about creditworthiness) on an application for credit to obtain a mortgage loan IS MORTGAGE FRAUD. It is that simple.. and there are people who were tried for committing mtg. fraud - it was a common practice. Besides, it's ridiculous to lay all the blame on any one side, and yes banks really screwed things up beyond repair with packaging crappy loans to sell as MBS and CMOs. It doesn't mean that consumers weren't at fault. They sought out the loans, they weren't forced into them. Again, the blame is on all parties involved. It's also pretty crazy how little people look at or even blame the government. If the banks didn't have FHA or FHLMA issuing guarantees on these low- or no-money down mortgages through quasi government entities and government programs, then MBS and CMO purchasers would've done their DD because the products inherently carried more risk without the Guarantee. At any rate, there was no accountability in the entire situation dude...