Convicted them of what? Or maybe you don't care?

If we take the example of blending junk rated mortgage backed securities with AAA rated securities then selling the whole lot as AAA securities, fraud seems to be an obvious starting point.

What you describe is exactly the issue, because there's no "obvious fraud". You need to understand these instruments, simply:

Banks didn't deceptively mix mortgages (which isn't fraud, anyway) and sell them to unassuming buyers. They constructed portfolios of mortgages (assuredly some good, some bad), a third-party rated those new financial instruments as AAA without fully accounting for risks, and sophisticated buyers purchased those instruments, also without fully understanding the risks.

If anything, the blame should be on the pension funds and large institutions who purchased these things and who pay people large salaries to manage this money. But I have a hard time seeing fraud in this process.

I mean, you can read this in The Big Short. Characters like Michael Burry read the prospectus' for these securities and could see what was in them, thought much of it was crap, and made their investment decisions based on that. Anyone who purchased the instruments had the same opportunity, and in the case of pension funds the obligation to do so.

Everyone simply thought “real estate only goes up.” In valuing the mortgage, the credit worthiness of the borrower was secondary to the value of the home, and the data still bears out half the story. In rising real estate markets mortgages simply don’t default. Problem is, everyone forgot real estate can go down.

I don’t think you understand securitization or bond ratings.