Scan through the posts on The Housing Bubble. Behind the dry-sounding statistics about increasing foreclosure rates, there’s a world of hurt going on. People are losing their homes. Worse, the loss they take on the house can be taxable and recent bankruptcy laws mean they may not be able to walk away from it.
It is insanity to give low-income first-time buyers a no money down, 100% financed mortgage, both for the owners who will lose the house, for the subprime company that made the loan (many such companies are going broke now), and for the banks who will eat the loans.
And when banks go belly up because of this, and they will, guess who pays for the bailout. The taxpayers. The rich get will subsidized yet again as the poor get shafted.