No need to blame mortgage companies, blame those who purchase beyond their means, and who do not plan for emergencies.
"Beer budget and champagne tastes". Bingo. Learning to live within your means is one of the true hallmarks of adulthood.
Our congregation had a family who had the same problem, perhaps worse. They didn't own a home but they rented a very nice one (and proceeded to trash it). They were constantly in need of help with bills and groceries yet their home was filled to the rafters with toys, toys, toys as in huge television, nice furniture, pool table, several computers, guns, game systems, motorcycles, the best cooking equipment and on and on. They took their kids to Disneyland and other places. When I would help them on their food orders, their menus amazed me. I couldn't think of any other parishioner who could afford to eat as that family wanted to do. In one two-week order, they wanted 68 pounds of high quality meat, all for a family of with six kids ranging from age twelve to newborn. They wanted bacon and eggs for breakfast, chicken enchiladas for lunch and roast for dinner, every night. This was a family where only the husband worked, and sporadically at best, where the couple had married in their teens and had little or no upward bound job prospects yet they wanted to live like the yuppie professionals around them.
They eventually moved away and I saw the husband awhile back, picking up more food paid by their congregation, still living far beyond their means. I suppose my congregation was somewhat at fault for enabling them but when we or another congregation would start to put pressure on them to scale down their lifestyle, they just picked up and moved on to another gullible group. They will probably never grow up.
When my husband and I moved to California back in 1992, I nearly choked at the home prices. A wise supervisor at my husband's business advised us to try to purchase a home with which we could live for a long time. He said he saw too many younger people settle for an inadequate house, thinking they would move up, but instead being stuck in a home they hated. We went with the upper limit of what was advisable for us and it worked. Of course, we were very frugal, use no credit cards, and our only debt is the house, in which we now have around $400K equity. Most people take risks. A few of us luck out. A lot get burned like this couple.
Although I tend to agree, the fact is that the old "champaigne taste on a beer budget" used to get people in trouble. Now it can ruin them for life.
You can quickly get into so much more trouble than you could just a decade ago. It took serious incompetance and financial narcissism in the past to get into the kind of trouble you can pretty much just slide into today - with a lot of peoples blessing.