As a business owner, you need to recognize all the costs of your marketing campaigns. It is not Groupon's fault if you fail to manage your business.

Actually there is a fine line. Is it the mortgage broker's fault if a homeowner has to declare bankruptcy due to the broker promising her that dream house and selling her a completely unaffordable loan?

Actually, I don't see it as the broker's fault, and I think it is a net negative for our society that so many people (especially the people who sign and aren't able to pay) do think it is the broker's fault. If the broker is lying or otherwise being fraudulent, that's a different story.

FWIW, I don't believe this is what the coffee shop owner believes.

In the Netherlands, law (dis)agrees with you.

Disagrees: Banks are obliged to make a honest effort of preventing that from happening.

Agrees: another way to look at that is that, alongside the mortgage, banks do give financial advice. Part of that is answering the question "can I afford this?". If they ignore that, you could call that "lying or otherwise being fraudulent".

As I said elsewhere, if the bank lies to you, they are certainly culpable. In the US, there are standardized forms that must be filled out that are supposed to give you all the "true costs" of a loan.

Beyond, that, though (and recognizing laws might differ), the bank is obligated to tell you what you "qualify" for, which may be drastically different than what you can afford.

The real grey area is in the tricks they can play with loans, and this is the point where "buyer beware" can certainly turn into "hang the SoB", depending on the behavior of the bank.

why don't you think it's the broker's fault?

If the broker lies or presents false information, then it is obviously his fault, and that includes hiding things like a a seven-year balloon payment.

On the other hand, if the broker tries to push you into a loan that is more than you can afford or has bad terms for you (like that seven-year balloon payment), it is your responsibility to know whether you can make that work or not.

<rant> I really believe that a good portion of the reason we are seeing so many foreclosures is because people weren't willing to take responsibility for their actions. They left it to mortgage companies to tell them what the could do instead of looking at their own lives to figure out what they should do. </rant>

responsibility is a matter of competence. the broker is the most financially competent party.