"They opted for an interest-only, adjustable-rate mortgage and counted on the value of their house continuing to rise as a way to build up equity. ..."
I stopped reading THERE.
An "interest only" ARM is NO way to build up "equity".
Of course it is, and giving you the greatest leverage on your investment. But your house has to appreciate in value. It is like buying a stock; it only appreciates if it goes up in value. Except that the leverage is 10x (or more).