Is it the mortgage -- or the mortgagee? As The Wall Street Journal reported this week, more than half of all the hybrid mortgage loans built around i? 1/2 teaser ratesi? 1/2 have been made to buyers with good credit, suggesting that the willingness to take big risks in the midst of a housing boom is not confined to the impulsive or the myopic.

Using the same comprehensive database, Milken Institute researchers have unearthed other, equally surprising facts about the origins of the current mortgage mess. First, a majority of foreclosures between 1999 and September 2007 were made against borrowers with prime-credit mortgages. Second, among sub-prime mortgages foreclosed in the same period, teaser-rate hybrids accounted for no more than a third of the total. And while this percentage will undoubtedly rise in coming months, it just doesn't follow that hybrids are the true villain of the piece i? 1/2 or that regulating away their use would take the air out of future housing bubbles. Indeed, we believe that barring hybrids (as the mortgage bill passed by the House before Thanksgiving would effectively do) would erode the efficiency of the mortgage market by limiting consumer choice.

Propriety data from LoanPerformance on some 80 million mortgages originated since 1999 makes it possible to trace the evolution of the current crisis. Hybrids, which offered low fixed rates for periods of two or more years before becoming adjustable rate mortgages, were not common until 2002. Thereafter, however, they rapidly became popular, peaking in 2005 before becoming an endangered species at the beginning of 2007.

Categorizing these Rube Goldberg mortgages as prime or sub-prime is not as straightforward as one might expect. For while many analysts use a FICO credit score of 620 as a rough-and-ready dividing line, there is a considerable gray area in lenders' practices. Using the originators' own standards, some 2.4 million hybrids (out of a total of 70.8 million) prime mortgages were issued between 1999 and the fall of 2007. In the sub-prime category, 3.1 million hybrids were issued out of a total of 9.5 million.

A far higher percentage of hybrids than conventional mortgages have gone into foreclosure i? 1/2 9 percent of hybrids compared to 3 percent of conventionals. And that gap will almost certainly widen as the teaser-rate periods for millions of hybrids come to an end during the next few years. But, judging by the experience of the recent past, very substantial numbers of conventional mortgages will also go south.

The money question, then, is how many foreclosures would take place if teaser rates had not been legal or if (as the House wishes) the regulatory barriers to using them had been more formidable. The answer is surely i? 1/2 feweri? 1/2 i? 1/2 but perhaps not many fewer. In 2005-2006, at the height of housing bubblemania, two-thirds of all the sub-prime mortgages issued were conventional fixed- or adjustable-rate loans. We find it implausible that more than a modest portion of the people with marginal credit who used hybrid mortgages to bet that housing prices would continue to rise would have been unwilling or unable to make the same bet with conventional financing. And what is true for sub-prime borrowers is surely true for prime borrowers, who have defaulted on more mortgages since 1999 than their less-creditworthy peers.

Still, why should we put up with hybrid mortgages if they make the end of housing bubbles even a little bit more traumatic? For the same reason that we put up with car loans that require no money down and credit cards that are easy to obtain but charge premium interest rates. Any limit on the terms of credit exacts a price in both the convenience of credit and its availability.

The one area here in which we think Washington could play a constructive role is in making sure borrowers know what they're getting into: a recent Federal Trade Commission study revealed a third of mortgage borrowers didn't know what interest rate they were paying, while half didn't know how much they borrowed. Hence, tougher disclosure standards may well make sense. But, in the end, it simply isn't the government's job to convince people that some financial risks aren't worth taking, or that housing prices can go down as well as up.

James R. Barth is a senior finance fellow at the Milken Institute, a Lowder Eminent Scholar at Auburn University, and former chief economist at the Federal Home Loan Bank Board. Peter Passell is a senior fellow at the Milken Institute.