Pretty much this except i believe it was a combination of the banks, gov't, and american citizens fault.
Predatory lending is when mortgage and loan houses go out and and lend subprime loans, or loans with high interest and less favorable terms because of the high risk associated with them. People with these loans have low credit ratings and have trouble making repayments, which is why lenders are compensated with higher interest rate payments.
This allowed for many people, initially unable to buy houses, to start buying, which in turn increased housing sale prices. Once people started defaulting on these loans, houses foreclosed, and the housing bubble burst, and home prices dropped to their real value at the time.
When a bubble bursts, it means the value of whatever at hand was over priced, so something worth $1 is inflated to $10, then the bubble burst and it drops down to $1, or the real market value, and you lose money. The same happened with the tech bubble in 2000. Internet companies were a brand new thing and no one knew much about them, but they were growing. They grew to an overvalued state until rational investors realized they were not worth this much, pulled there money out, and the dot com bubble burst.
Going back to sub prime mortgages, these mortgages were securitized, or packaged together by their risk and sold to investors with a correlating return. The main investors who bought these were the big banks and mortgage houses themselves who used the proceed to lend even more, so the money is going in circles basically. When you add a huge amount of defaults on these loans, the banks investment in them becomes worth nothing and they have to write them off.
Frannie Mae and Freddie Mac where 2 businesses that solely did securitization, and were taken under control but the U.S. govt during this meltdown to help mitigate the crisis. Lehman brothers was the first big bank to fail, and the govt did not bail them out. However, the Fed saw that their failure was creating a domino effect and soon other banks would start to fail, thus creating a huge global financial meltdown.
So, banks merged (Bear Stearns and Merril Lynch), or were bailed out with tax payers money (Goldman Sachs and Morgan Stanley). This has now created even larger banks (HSBC and Barclays) that would cause an even bigger crisis if this problem were to happen again.
What I was trying to get at was this crisis was in part the lenders fault for failing to realize the huge risk associated with sub prime mortgages, U.S. home owners for failing to fully understand the terms and agreements of their mortgages (people who were qualified for regular mortgages where given sub prime instead), and finally gov't and their lack of lending regulation.
Fuck I wrote a lot, but here is a good article my professor wrote that explains the federal and international deficit we have going on, how the various aspects of the U.S. and world are interconnected, and solutions to fix the problem.
http://www.alineofsight.com/sites/alineofsight.com/files/Bhagat_How-to-Grow-Employment-and-the-Economy.pdf 
