From the security of their own homes, many sneer at the get-rich-quick crowd that lost money when the tech bubble burst. But many who would throw stones are living in glass houses—barely maintained by fragile second mortgages. The brash sales pitches, reckless spending, and short-sighted decisions that fueled the dot coms’ rise and fall have taken over the mortgage market. Everyone now knows about the tech bubble because it has already burst; fewer recognize its near neighbor, the mortgage bubble because they are living in it. In the third quarter of last year, home mortgages increased at a record annual...