Furthermore, I don't think house flippers created an industry that needed an ever-increasing supply of loans for securitization and corrupted lending institutions with that demand either.
Here is pushback against that thinking from 2008! It still has a lot of traction, probably as much as it did in 2008. With a bit of effort I could probably find a similar article from every year between then and now.
http://www.slate.com/articles/business/moneybox/2008/10/subp...
Edit: from 2013 http://www.businessinsider.com/republican-explanation-of-200...
At first, the encouragement was tied to home ownership programs that pre-screened applicants and provided training for owning a home. My dad ran one of these for a few years, and they were remarkably successful at transitioning section 8 recipients to homeowners and often homeowner/landlords.
Later, they decided that wasn't fast enough and they skipped the education and screening and just wrote loans.
However, with their typical junk rating they're a small portion of the market, interesting only to investors with an appetite for risk.
The systemic trouble started when instead of junk those loans were rated AAA, which then opened the door to pension funds and institutional bond funds.
I have money invested there because I feel it's a better social use than gambling on the stock market. I see good solid 5% returns. Most of the loans are repaid quickly.