In real simple terms, what caused the financial crisis we are now facing?

im from britain but i know its now widespread crisis. RegardsIn real simple terms, what caused the financial crisis we are now facing?
basically, it was the U.S. I hate to say that but this funny video kind of shows how we got here.



http://www.youtube.com/watch?v=EcI70v5V1鈥?/a>In real simple terms, what caused the financial crisis we are now facing?




In simple terms, Mortgages Sold to Sub-Prime people (aka: Poor Folks) who didn't have the income to afford the house they got a loan for. Then that loan was resold to Wall Street who then bundled it into a product called a Mortgage Back Security.



Sounds great, right? Well we the poor people stopped paying their mortgages because they couldn't afford it, the MBSs became worthless. And the suckers holding the bag were firms like Bear Stearns, Lehman Brothers, Wachovia, etc...In real simple terms, what caused the financial crisis we are now facing?
Basically, in a word greed. People were able to get ninja (no income, no job, no asset) loans on homes they couldn't afford. The mortgage companies and banks wanted to make more money on those loans so they re-packaged them for sale as mortgage backed securities and sold them. As people defaulted on the loans they could not afford, the banks and financial institutions hid them on their balance sheets to improve the appearance of their financial condition. The house of cards crumbled and the sub-prime crisis became the credit crisis.