Americans were willing to live beyond their means, and bankers were willing to finance that dream. The biggest problem with this easy money was the distinct lack of responsible financial regulation. “Declared income” made it easy for anyone to commit mortgage fraud, and banks didn't worry about the money they lent since the loan was ultimately backed by the government. Subprime borrowers were given the opportunity to get mortgages, and no down payment allowed people to get a home loan without really having “skin in the game.” Second mortgages were just icing on the cake and people believed that as long as house prices continued to rise, their home equity could be used as an instant money-making machine to living even further beyond their means. As long as lenders charged high interest and borrowers' monthly payments were low, everyone was happy. Wall Street was making a fortune selling CDOs and encouraging banks to make lending even easier, and the people signing their loans were more than willing to live a superficially wealthy, debt-ridden lifestyle. Ironically, Wall Street got its name from walls built to keep out wild pigs, but the walls of financial responsibility were torn down so everyone could come and feed on the mortgage frenzy. AAA-rated CDOs were sold around the world as “safe investments,” but they ultimately depended on the ability of a select group of Americans to make their monthly mortgage payments. Predictably, people started defaulting on their home loans, although most couldn't even afford to do so in the first place, and many now owed more than the value of their property. home after taking out home equity loans. Many have made the decision to abandon their homes altogether, believing that continuing was a bad investment... middle of paper... that should be reconsidered. The final part of my approach is to enact consumer protections for those who were responsible for their mortgages but fell on hard times. We need to create insurance policies for people with loans that would allow them to make mortgage payments if they are unemployed, sick or injured and cannot work. Mortgage insurance would provide protection to both the consumer and the value of the real estate market, and is an essential element in preventing foreclosures. I sincerely hope that the Obama Administration will take urgent action to promote practical solutions to the housing crisis and take precautionary steps to ensure that history does not repeat itself. It will be interesting to watch the future unfold as 'teaser rate' mortgages default and see how government intervention affects the outcome of this unique situation facing the people American..