In a recent paper, Christopher L. Foote, Kristopher S. Gerardi, and Paul S. Willen report (pdf):

This paper presents 12 facts about the mortgage market. The authors argue that the facts refute the popular story that the crisis resulted from financial industry insiders deceiving uninformed mortgage borrowers and investors. Instead, they argue that borrowers and investors made decisions that were rational and logical given their ex post overly optimistic beliefs about house prices. The authors then show that neither institutional features of the mortgage market nor financial innovations are any more likely to explain those distorted beliefs than they are to explain the Dutch tulip bubble 400 years ago. Economists should acknowledge the limits of our understanding of asset price bubbles and design policies accordingly.

Scott Sumner summarizes the twelve points here:

Fact 1: Resets of adjustable rate mortgages did not cause the foreclosure crisis.

Fact 2: No mortgage was “designed to fail.”

Fact 3: There was little innovation in mortgage markets in the 2000s.

Fact 4: Government policy toward the mortgage market did not change much from 1990 to 2005.

Fact 5: The originate-to-distribute model was not new.

Fact 6: MBSs, CDOs, and other “complex financial products” had been widely used for decades.

Fact 7: Mortgage investors had lots of information.

Fact 8: Investors understood the risks.

Fact 9: Investors were optimistic about home prices.

Fact 10: Mortgage market insiders were the biggest losers.

Fact 11: Mortgage market outsiders were the biggest winners.

Fact 12: Top-rated bonds backed by mortgages did not turn out to be “toxic.” Top-rated bonds in collateralized debt obligations (CDOs) did.