I'm sure a lot of poor people got mortgages for "political" reasons, but there was a lot of house flipping, second-and-third-home, condo speculation, and other middle and upper class real estate games that contributed to the real estate crash, not to mention a lot of plain folks who were convinced they could trade-up. There is also a lot of office space and commericial property on the market, too.

When I bought my house in '98, the realtors and banks really pressured us into balloon mortgages and extravagant housing we knew was beyond our means. Happily, we resisted. And over the last 11 years 4 separate mortgage companies, BofA, American Home Lenders, WAMU and Wells Fargo have held our note. Surely, just the administrative costs of this constant re-bundling must have been enormous, what could have the dildoes been thinking?

And to this day, the financial industry fills our mailbox with spam offering refinancing and lines of credit and (what balls!) foreclosure insurance. The real estate crisis happened because it was perceived to be a very profitable enterprise. They were wrong.