because income typically goes up, home values go up, and a conventional loan stays flat.
Throw in a hefty itemized deduction, and the government is paying 20-30% of your mortgage (not as tru now with the std deduction increase)
The 2008 crisis issue was the 1/1 adj rate mortgage at 4% below the index, so after two years the 4% they qualified for can't possibly support the 8%
it flexed to - the bank was betting on getting the house and flipping it for the gain. Problem was that it was a ponzi scheme based on mortgage insurance.
a failure of the legal system to prevent banks (and the lenders making huge commissions) from preying on consumers who didn't understand what they were buying.
They bailed out the insurance companies because everyone's pension fund/annuity would have collapsed. So ultimately they saved the people that worked hard,
had a pension, and lived in their homes that they earned. Not the people that purchased a home they couldn't afford - even if they were taken advantage of.
it may have seemed devastating to some 20somethings to have to declare bankruptcy, and go through that. But they had time to recover.
Grandma didn't need to become a destitute ward of the state for her last few years.
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