The problem with the sub-prime mortgage issue is that lenders really did not care if the home owner defaulted. Partly this was because the debt was just sold on - but mostly (I think) it was because house prices continued to rise so quickly: even if the owner defaulted, say three years down the line, it did not matter because the equity in the house had increased more than enough to still be profitable for the lender. It was when the house price increase slowed down that the whole thing came unravelled.

Mike