A lot of the so-called "subprime" crisis stems from federal banking regulations enacted during the Carter administration. Legislation passed way back when forces banks to make a certain percentage of loans to "underprivileged" home buyers. If the banks don't meet this certain percentage, they are not allowed to expand their businesses. It's very similar to the credit card regulations that allow deadbeats to walk away from credit card debt if they make a "good faith" attempt to pay back a fraction of what they owe.
There are a couple of bills floating in Congress right now that would extend these same insane banking regulations to the mortgage industry. If that happens, you can bet we will see a mortgage crisis the likes of which no one has ever seen. Can you say 30% mortgage interest rates? If this happens, it will bring the construction industry, and every industry related to it, to a screeching halt. Then, you'd better have a good way of feeding yourself, because it's going to make the Great Depression look like a cake walk.
It all boils down to the fact that we have the best goobermint that money can (and does) buy.....
You’re correct, there will be a crash in the housing industry. I would say though that there won’t be a ‘mortgage crisis’ per se since there simply won’t be a mortgage industry. Mortgages will simply be unavailable.