Two readers suggested exotic loans as a topic. "Many of us have talked about the creative loan issue. Some study results. (I was surprised to see this in the San Diego Union Tribune, the biggest RE shill paper in the country IMO). Some highlights: 'Nearly 54 percent of payment-option users in the sample had FICO scores below 700.' (Wow, I didn’t realize 'sophisticated borrower' meant 'below average borrower')."

"'Some industry experts estimate that upward of 70 percent of payment-option borrowers elect to go with the minimum payment.' (Shocking, to anybody who hasn’t been looking at what the option arm customer is like, or the average American even). 'One out of eight payment-option borrowers and one out of six interest-only borrowers earned less than $48,000.' (We’ve brought the dream-soon-to-be-nightmare to so many people!)."

Another replied, "I agree. Too many had no business whats so ever being in ownership; job stability suspect, credit history exposing the inability to properly manage small amouts of debt and then we hand them enough debt that will likely sink the boat. I wonder how bad it will get??"

From the Denver Post. "In a two-block loop of Mockingbird Lane and Mockingbird Street, a neighborhood built just seven years ago, there have been 23 foreclosures among 94 homes in five years. That's nearly one of every four front doors. One home has been foreclosed three times, two others twice."

"The house-building boom and loose lending practices that ended disastrously for so many people here mirror a pattern stretching across Adams County, which has the worst foreclosure rate in a state with the worst foreclosure rate in the nation."

"The problem now, experts say, is that too many working-class families take on crippling debt loads to seize their piece of the American dream. They overpay for starter homes. They take on extreme mortgage rates to avoid making a down payment with money they don't have."

"'If you have a job and breath in your body, a builder will put you into a new home,' said Jan Buckner, who invests in foreclosure properties in Colorado. They wind up in a trap from which there is only one escape: losing their home."

"Mockingbird Lane (was) initially zoned for manufactured housing. Then a national builder, KB Home, showed up in the late 1990s. On Mockingbird Lane, many who moved into homes designed for first-time buyers put little or no money down. KB offered easy financing. So did other lenders."

"Some homeowners refinanced quickly. Many accepted adjustable-rate loans that could run as high as 16 percent when conventional 30-year mortgages were below 6 percent. It is common practice for lenders who originate a mortgage to resell it to other investors. In almost every case, the lenders who foreclosed on the Brighton homes did not originate the mortgage."

"Jim Spray, a Colorado mortgage broker and his wife, Linda, a Realtor, reviewed foreclosures on Mockingbird Lane and Street at the request of The Denver Post. They say they saw minimal down payments, and also refinancing loans, that left homeowners owing more than their homes were worth. At foreclosure, some buyers owed $20,000 to $30,000 more than their original purchase price. 'That's a killer,' Linda Spray said."

"Margie Ibarra was among those who started out with a newer, and riskier, 80-20 loan. Her first mortgage covering 80 percent of the purchase. Another lender supplied the remaining 20 percent in a second mortgage. That enabled her to buy a $160,500 house without a down payment in 2002."

"Her first mortgage started at 6.5 percent interest but could climb to 12.5 percent. Her second mortgage, on the 20 percent balance, came in at 12.75 percent. Her payments started at $1,148 a month: $811 on the first mortgage and $337 on the second."

"'I kept trying to refinance. They would tell me you have to wait, due to the fact that all of the properties in the area had gone down in value,' she said. 'The foreclosure was due to my financing,' she said. 'I would have rather had the mortgage company be honest and say, 'No, this is too steep.' Why couldn't they have made me make just one payment at a fixed rate? They make it sound so good.'"

"A car accident finally sank her hopes. She needed surgery. She borrowed more money to buy a replacement vehicle. After that, 'I couldn't catch up,' she said. Her home was foreclosed in 2004, less than two years after she bought it. She filed for bankruptcy protection and let it go."

"She said she drove through her old neighborhood the other day, passing the home she loved. It sold for $131,000, nearly $30,000 less than she paid for it. Around the neighborhood, 'so many houses are for sale,' she said."