[toomuchtodo]

To be clear, the fraud was banks packaging up subprime loans as prime and then dumping them on the secondary market to unsuspecting investors who thought they were getting quality mortgage bonds (I gloss over the nuance of tranches and CDOs for brevity).

This of course hurt homeowners who had loans made that never should’ve been made, but the root cause was investors not getting what they thought they were buying, and the resulting collapse in confidence. Homeowners were collateral damage, and as you mention, prosecutions were underwhelming (only 1 person was prosecuted).

[Gibbon1]

I felt really bad about ordinary people that got clobberd and then just left to fend for themselves. Ordinary people don't buy houses as 'prudent investments'. They do it because that's where they are in life.