This excellent web-only American Prospect article by Peter Dreier and John Atlas analyzes the roots of the sub-prime mortgage crisis:
Some political observers believe that the American mood is shifting, finally recognizing that the frenzy of deregulation that began in the 1980s has triggered economic chaos and declining living standards. If they needed proof, the foreclosure crisis is exhibit number one.
Although the immediate cause is the widespread use of sub-prime mortgages, the root cause is a decades old failure of government to adequately regulate the banking industry.
The Right can chant the "free markets" mantra all they want, but doing so will not make the problem disappear. Greed--enabled by lack of oversight--created this crisis. The antidote is not more of the same.