etbartley is right on the money with his opinion. While admittedly, mortgage brokers may have less scruples than say, well Lawyers, but the truth of the matter is that most consumers were reasonably aware that their teaser rates were going go higher when they entered into their purchase agreements, they knew that the rates they committed to were not tied into any kind of prime rate established by the Federal Reserve System, and they also knew they would be severely affected when that in fact happened. The homeowner dream is a great one. It is not a Constitutional right. Most people who need a good transportation car buy something to go to work in that is economical, affordable, and it is considered a tool. Those people bought a Nissan Altima, Chevrolet Malibu, Ford Escape or Focus. Many of them enjoyed an almost non-existent interest rate on the financing for up to 5 or 6 years. Most if not all did run out and purchase a $380,000.00 Rolls Royce, Bentley or Aston Martin because the first payment wasn't due for the next 12 months. Twelve months is not long when the Grim Reaper is looking over your shoulder and admiring you as his next meal. Lenders need to eat their greed. Consumers also need to take some responsiblity for their own actions. Lenders don't want to be landlords, don't want to pay the taxes on potentially foreclosed homes, don't want to pay real estate commissions on selling a property that is already priced as a short sale, (being sold for less than what the lender is owed). How about something novel? Instead of throwing good money after bad, such as offerring the foreclosed homeowner $500 to $3,000.00 in cash to leave peacefully without trashing the place, Why not offer the defaulting borrowers new terms with certain conditions, like maintaining homeowner insurance hazard policies, keeping the County property taxes current, and restructuring the loan to a level that the borrower would have qualified for in the first place if he or she had likely been informed. When my business takes an economic downturn, and it does from time to time, I can't recall the phone ringing off the hook with elected officials wanting to assist our firm economiclly at other taxpayer's expense. Perhaps, as I close, I wonder what would happen if the Federal government stayed out of the free market process and let the competition amongst competing interests let if rise or fall to where the natural market place dictates it should be. I don't know about you but I have had more than enough if not too much government. I am a three time elected official.

 If you had bought a property for the same amount as your neighbor and had put down a hard earned 10-20% by saving and skimping for years. The neighborhood looks great, values are going up,you are making improvements to your home and your little nest egg is letting you sleep good at night. Now your neighbors who got caught up in thier financial lie start to get called in by the banks, property values in your area drop like a stone, the neighborhood starts to fall into disarray,you are holding on barely with the equity you have built up with your hard work and wise spending habits, the neighbors move and rent out thier properties to try to save them, thier ARM just eats them up and the renters are neglecting the unit, it`s not thier property. Now you have a neighborhood with one house out of 4 that is maintained and has a green landscape and no boards on the windows. You want to sell and move, but you are stuck, no way to sell now without a loss. Should the Goverment step in and use YOUR tax dollars to reward the neighbors and fix everything or let the market reward them and readjust so that responsible home buyers( as you have to be today to qualify) can move in and bring the neighborhood back up to to a level of secure property values and pride of ownership.It will take years but the alternatives are..... 

 The problem with the "made your bed" attitude is it assumes all consumers made informed decisions. It's a nice assumption, but one that ignores the psychology in effect during this phase. There have been numerous reports of people being subject to a bait and switch at the closing table: what they thought was a fixed rate mortage turns into an ARM when they show up to sign the papers. Now, we'd all like to think that those people refused to sign and walked away from the table to find a more reputable bank, but again that ignores the psychological tactics at play. If they walked away, they'd quite likely lose the house that they probably battled quite hard to even get into escrow and perhaps also lose the deposit money unless the contract had a walk-away clause for failure to obtain a mortgage. I'm sure more than a few were told to go ahead and sign now and they could refinance to a fixed later before the rates increased (and probably also were told "and hey, in the meanwhile you pay less each month"). Most people think emotionally, even when it comes to such a critical financial decision, so such psychological tactics would work more often than not. I personally know someone that Countrywide did this to and now the property values are too low for that person to refinance.