The Center for Public Integrity yesterday released a dynamite report on the interconnections between Wall Street and the subprime-mortgage industry. It’s after The Audit’s very heart, and it’s gotten wide play in the press, including on the front page of the Financial Times.

The center looked at the top 25 subprime lenders and found that almost all of them were owned or financed by mega-banks. Take a look at the lede in its “key findings” (emphasis mine):

The top subprime lenders whose loans are largely blamed for triggering the global economic meltdown were owned or backed by giant banks now collecting billions of dollars in bailout money — including several that have paid huge fines to settle predatory lending charges. The banks that funded the subprime industry were not victims of an unforeseen financial collapse, as they have sometimes portrayed themselves, but enablers that bankrolled the type of lending threatening the financial system.

The center ran the numbers on more than seven million subprime loans made from 2005 to 2007 to come up with the top 25 lenders. Countrywide’s at No. 1. And seven of the top 25 (many of which are now defunct) have gotten government bailout funds.

The report smartly notes that most of these companies weren’t banks that could lend off their deposit bases. They depended on others for their lending capital. That’s, of course, where Wall Street and Europe come in:

Since the confusion and panic of 2008 has receded, angry taxpayers have been looking for someone to blame for the mess. Subprime lenders that originated loans they knew were likely to fail are widely cited as a good place to start. But the subprime lenders could never have done so much damage were it not for their underwriters — those giant investment banks in the U.S., Germany, Switzerland, and England.

See, for instance, the funders of the notorious and now defunct Ameriquest:

Ameriquest, according to Center research of prospectuses, had relationships with virtually every major Wall Street investment bank. The lender sold billions of dollars in loans to Lehman Brothers, Bear Stearns, Goldman Sachs, Citigroup and Merrill Lynch. Some of its other financial supporters included Morgan Stanley, JPMorgan Chase, Deutsche Bank, UBS Securities, RBS Greenwich Capital, Credit Suisse First Boston, and Bank of America.

Fannie and Freddie come in for their deserved lumps:

In addition to Wall Street, the Federal National Mortgage Corporation (Fannie Mae) and the Federal Home Mortgage Corporation (Freddie Mac) also fed the subprime monster. Fannie and Freddie were created by the government to promote home ownership by buying mortgages from lenders and selling them to investors, thus freeing up cash for banks to make more loans.

The center’s report is also very good to take a look at the boiler rooms at these top 25 lenders. Nearly half on the list “have paid significant sums to settle allegations of abusive or predatory lending practices,” the report says, and is particularly nice to note government-aid gobbler Citigroup’s doings:

Two of the largest settlements ever reached for lending problems were with AIG and Citigroup, two financial institutions that have received billions in federal aid. Citigroup has a history of subprime lending, dating back to its purchase of Associates First Capital Corp. in 2000. Citigroup at the time was building a global banking empire thanks to its success in convincing the government to deregulate the financial services industry the year before.

Associates had been criticized by some as a predatory lender, and in 2002, Citigroup paid a price for it. The bank agreed to pay $215 million to resolve Federal Trade Commission charges that Associates had engaged in “systematic and widespread deceptive and abusive lending practices.”

In 2004, the bank was hit again, this time by the Federal Reserve. The Fed levied a $70 million civil penalty against CitiFinancial, Citigroup’s subprime lending unit, for abuses during 2000 through 2002.

And the center notes that the signs of wrongdoing were there all along. This article is a good summary of many of the Cassandras of impending subprime and financial doom.

This sentence about sums up the whole crisis:

Subprime loans weren’t designed to fail. But the lenders didn’t care whether they failed or not.

And I love how the Center for Public Integrity packages the report, including a commentary by its executive director on what it all means, as well as interactive charts and data and a backgrounder on the overall financial crisis.

The commentary, by Bill Buzenberg, is superb. I’ll leave you with his first few paragraphs, which speak for themselves:

There is something of a myth surrounding the current economic crisis, how it unfolded, and the precise role of the world’s largest financial institutions in the global meltdown. That myth suggests these banks and investment houses were somehow surprised “victims” of unscrupulous subprime mortgage lenders, and that they could not have anticipated the damaging toxic assets that have so infected their balance sheets.

What’s missing from this story is the fact that this was a self-inflicted wound for which the rest of us are picking up a massive tab. The largest American and European banks and investment houses were not the unwitting “victims” of an unforeseen financial collapse, as they have so often been portrayed. The mega-banks not only invested in subprime lending institutions — they were the enablers, bankrollers, and instigators driving high-interest lending, and they did so because it was so lucrative and unregulated.

Worse, in many instances these are the same financial institutions the government is now bailing out with tax revenues.

Why hasn’t a newspaper or magazine done this?

If you'd like to help CJR and win a chance at one of 10 free print subscriptions, take a brief survey for us here.

Ryan Chittum is a former Wall Street Journal reporter, and deputy editor of The Audit, CJR's business section. If you see notable business journalism, give him a heads-up at rc2538@columbia.edu. Follow him on Twitter at @ryanchittum.