lack of regulation in Wall St.

Subprime mortgage industry was boosted by the mortgage backed security industry from wall street.  Wall street's stance against any government regulation is the main cause for the market collapse. 

The government's policy of increase home ownership mostly directed to Fannie and Freddie.  They were out competed by the wall street backed subprime mortgage, and got into subprime mortgage themselves and got burned and now they are under conservatorship by the FHA.