You bet it is!! I have been "in the business" for years and it is still confusing to me. Let me give you one example that might make it easier for you to understand how we got into this position. In late '06 I had a previous client, who I had assisted in buying a home 4 years earlier call me and indicated they wanted to buy a new home. Great, I thought! They told me they were pre-qualified and ready to go so I proceeded showing them homes in a 60K higher price range than their previous home. In the process of working with them I discovered they had lost their previous home to foreclosure. Wow, I wondered how they could be buying a higher priced home just 2 years from losing one to foreclosure. I know credit was easy and plentiful but my preferred lenders could not get them financed. At any rate, they had the pre-qual so we found a new sub that had homes that suited their desires. This was one of the big national builders and had their own mortgage division. I held my breath as they spoke with the mortgage division for approval of their purchase. Surprise, surprise, not only were they approved to purchase, but all their closing cost will be paid by the seller, zero down payment would be required and they will be getting a 2% lower interest rate for the first 2 years. Absolutely amazing! But I am an agent, not a mortgage company so I proceeded with the sale and it did, indeed, close. I have not checked up to see if they are still in the home, making payments, etc. but left wondering what would happen in 2 years (late '08) when the payment go up. Not there yet, but this is an example of people not qualified still getting a loan they may not be able to pay back. This was going on all over the country and many of these buyers were not able to make the higher payment and end up in foreclosure. Who's fault is it? Well, in my opinion, the goverment is somewhat at fault for the loose standards for loans, the builders and mortgage companies are at fault for being more concerned with selling the home and pocketing the profit from the sale and the buyer is at fault for going in over their head. Even I deserve some of the blame for going along with a purchase like this. Plenty of blame to go around. This example is not, by any means, the full answer to the crisis but just a symtom of the excesses that were going on to bring about a "Housing Crisis".