While there is definitely a lot of blame to be placed on the creditors, don't you hold the homeowners to any standard of responsibility? They signed the mortgage.
So you want to blame people who probably didn't fully understand what they were signing up for (not least because they probably weren't responsibly disclosed to) for having been fleeced by crooks peddling predatory loans?
I'd bet real money that almost every applicant for one of these mortgages was reassured up, down, left, and right by the broker (whose interests were most definitely not aligned with the applicant's) that everything will be fine. "When the variable rate kicks in, you can just refinance. Rates will be lower than ever!"
Many of the families who lost their homes to foreclosure signed into a mortgage under the assumption that they would be employed/in-business for the next 20-30 years.
Unfortunately, when one economic domino falls and sets of a chain reaction leading to a market crash, a lot of hard working and responsible people get caught up in and swept away by the ensuing tsunami.
It was an example of how people place bets against the "Free Market" and lose sometimes.
Even if people are rational about this, the 1980s saw an increase of interest rates above and beyond 14%. If 1980s style stagflation ever hit today, I can assure you that even the "rational" home-buyers who fully understood the clauses would be forced out of their homes.
In any case, being forced out of your home, even if it is a situation you set yourself up for, is a traumatizing situation. I think we all can agree to that.
