You are kind of on to something in that people had loans they shouldn't have gotten in the first place. But as with many things of this nature, the casualties w

You are kind of on to something in that people had loans they shouldn't have gotten in the first place. But as with many things of this nature, the casualties were all over the place. The labor market turned to shit, just as prices crashed and interest rates went up. People who paid faithfully and thought they had equity were shocked to find they were underwater in months. That's one HUGE down side of low down payments: it doesn't take much for a price swing to wipe out all your equity and leave you in a no-win situation when it comes to selling your house. Down payments ought to be at least 20% of the price of the house, to discourage people from taking out bad loans or walking away from them. The government should not subsidize mortgage credit or fix interest rates in any way.