Wasn't the housing bubble driven in part by a form of passive investing, namely bundling mortgages (one of the "safest private investments")? Economic systems

Wasn't the housing bubble driven in part by a form of passive investing, namely bundling mortgages (one of the "safest private investments")? Economic systems are feedback loops. If something is the best investment that causes it to become a bad investment in proportion to how rapidly people realize it's a good investment.