Back in 2001, my daughter and her husband bought a home for $160K, Over the next few years its value inflated to over $500K. At every opportunity, they refi’d. When their last subprime loan reset, they could no longer make their payments. Somehow they ended up owing about $550K. They lost the house thru a short sale for $275K. So over a few years they took out nearly $400K. Of course, they did have new SUV’s, RV’s, off-road toys, a boat and expensive vacations.
And their bank encouraged that behavior. If the bank wanted to loan the money thats their business. Likewise the bank should bear the reward for their poor decision.
So unlike what some of the posters' strawmen here, they didn't lose jobs or get sick. Unfortunately there was a lot of that going around. Now it's the taxpayers who are getting the ultimate bill. Too many people treat loans as income.