The chickens have come home to roost, so to speak..it is a perfect storm..the confluence of bad decisions on every front for quite a few years now..ignoble people doing ignoble things, thinking they could get away with and finding, much to their dismay, they couldn't..now the "spin" begins..the fingerpointing..that's how incompetent people deal with the results of their incompetence..they always blame others! :(

Similarly to the "irrational exuberance" of the American public with the "dot com" stocks of the late 1990's, the American public thought it had found another "get rich quick" scheme in real estate. Real estate became a solid investment following the "dot com" bust. But people bought more than they could really afford expecting the value of the real estate to go up so that they could refinance and/or sell. In fact, the market dried up and prices fell. That means that some people who recently bought homes had negative equity in their homes. They couldn't sell the property for what they had paid for it (usually via mortgage). Throw in the unexpect doubling of gasoline, and people started having problems making ends meet and foreclosures started. Now the banks were caught holding properties which were worth less than what they had lent the money to buy, and they were losing money. The blame goes NUMBER ONE to the idiots looking to get rich quick in the real estate market. NUMBER TWO blame is on the lenders, some of whom did not exercise good judgement and follow standard lending procedures during the boom (in an attempt to get business).