By ABIGAIL FIELD Posted 6:30 AM 01/20/11

As the foreclosure crisis has escalated over the past several months, one overarching debate has been about who bears the most blame: homeowners or banks?

After everything I’ve learned and written about the foreclosure mess, my verdict is: The banks are responsible for 90% of the problem, troubled homeowners 10%.

Yes, every foreclosure involves a homeowner not paying his mortgage. But every foreclosure also involves a bank that made the loan. And usually another bank, or several more, that profited from securitizing the loan. And still another bank, or several, that profited from servicing the loan. Together, those banks have done three things that created the massive glut of foreclosures choking America’s legal systems and laying waste to its real estate markets:

• They knowingly made millions of loans doomed for foreclosure as soon as the check was written.
• They deliberately and/or incompetently failed to modify many salvageable mortgages.
• They were so careless with their paperwork and processes that they’ve undermined the rule of law, clouded the title to untold numbers of properties and complicated the processing of the massive backlog of foreclosures that hurts the economically crucial real estate market.

Let’s take a closer look at each factor.