My wife and I were in a pinch in 1999. We had just gotten married, yet she had a house with her ex-husband which hadn't sold. He was willing to do a quit-claim, so we could buy the house. Unfortunately we got suckered into an ARM. It was bad news. Despite the assurances that the rate would only raise a little bit in a few years at which point we could refinance, we were upside down in the mortgage after 9 months. ARM's are criminal and the person who sold us on it was a blatant liar. We suffered for it and finally did refinance, but took about a $20,000 hit. This with a yearly income of the time of under $25,000.

Its interesting that there wasn't even an instrument to bet against the housing market until there was a market for it. The greed of the bankers saw a market for the instrument and paved the way. Nobody in that movie was a hero.

Despite the chilling last line of the movie, there have been quite a few changes in the housing market. Anybody who has bought a house since 2008 knows that the bar is raised much higher than before. Sadly ARM's are still legal, even though that was the biggest reason for the crash. As usual the most important lessons went unlearned.