It was much deeper than that. While you're partially correct, that people not paying back their loans is what ultimate set off the collapse, the reason for it w

It was much deeper than that. While you're partially correct, that people not paying back their loans is what ultimate set off the collapse, the reason for it was the straight greed, and manipulation of the repackaged junk sub-prime mortgages by the banks. Collateralized Debt Obligations, and even worse CDO-Squared, bundled up complete crap, and sold them off with triple-A ratings. When the mortgagor failed to pay, those CDOs were finally downgraded and became worthless, losing banks hundreds of billions. Predatory practices on homeowners, and bank greed.