Personally, I would neither ask for nor accept a mortgage that is over my abilibity to repay. This article is another diatribe about how the wealthy take advantage of the poor and the white males take advantage of the so-called 'minorities'. It's getting very tiresome, and it is not the fault of the lenders. The last thing on earth any lender wants to do is foreclose on a loan and take a house. They are not in the real estate business, nor do they want to be.
Three years ago, after a big move when I made a killing on my previous tiny old house, I convinced myself that I "deserved" a large home on an acre of land. I easily qualified for the loan, a 5-year ARM at 4.25%. The montly payments even at that rate were $1000 more than my previous mortgage, but I figured my spouse would be working soon and we could cover it easily. Three years later, my spouse has just started working at a very low salary, our property taxes have gone up twice, and we are spending a fortune on utility bills and lawn care for this huge property. I'm not facing foreclosure, but I can sure see how easy it is for people to get in over their heads, especially in a boom time when it seems everyone is buying bigger and nicer homes and money seems so cheap.
One result of this problem is a push for government to step in and prescribe tighter underwriting standards so that people can't ever qualify for a loan that is more than they can realistically repay. There will certainly not be a bailout of lenders.