>What difference does it make if mortgage rates are at historic lows? Are you claiming that the low rates are evidence of low risk? No, but interest rates woul

>What difference does it make if mortgage rates are at historic lows? Are you claiming that the low rates are evidence of low risk? No, but interest rates would be tied to risk if principle adjustments were on the table in court proceedings That's why it's important they're currently at historic lows, as it would mean rates in risky areas would go up. As banks are better than random people at assessing risk, this would also push people towards safer investment. >Ask anyone buying today what he/she expect the real estate market to do... i.e. how much he/she thinks his/her new place will appreciate each year over the next 15 years. You'll find that they are greedily expecting 5-7% returns annually. As are the banks and those who buy mortgages. Everyone is taking risk, lenders and buyers, just they're not doing it in the most sensical way. You can't malign one party without hitting the other.