Tighter rules for mortgage lending?

U.S. Treasury Secretary Henry Paulson is recommending that the government impose tighter regulations on mortgage lenders. He says this is necessary to avoid another credit crisis. He says that the regulations are behind the times and we need to update them and exercise more oversight of lenders. This includes licensing for mortgage brokers and tighter guidelines for credit rating agencies.

Really? Did the lack of government oversight cause this "credit crisis"? Or was it more a combination of consumers buying properties that they couldn't afford and lenders all to eager to earn money by writing their mortgages regardless of their income or credit? Because I don't know that more oversight is really the answer. Frankly, I'd like to see the government butt out of our lives and businesses a little more.

Here's what I think: The lenders who wrote bad mortgages should suck it up and deal with it. No government money to help them out. The homeowners who overbought should also suck it up and either sell their houses or get out of them. No bail outs for the borrowers. They can fix their credit problems on their own.