Which comes first, the availability of loans with no proof of income requirement or people willing to sign the papers for one?

We never used to have a problem with deadbeats taking out mortgage loans because the lenders asked for proof of income and required the borrowers to have some money in savings (typically 10% down was needed). FHA-backed mortgage loans were available to lower income folks, but they still required 5% down and proof of income. The mortgage industry changed those rules, not the lenders.

The best thing the fed could do to prevent this problem from happening again is to outlaw mortgage loans that don't verify income. The bill would a few pages long, cost nothing, and it would do more for our future than the $700 billion bailout.