Who's fleecing the lenders? Is there any evidence of people allowing foreclosure because of a negative change in the value of the property? I've never heard of it, and if anyone is doing it, they're fools. If they signed up for an ARM, they're fools, anyway, so it's not outside the realm of possibility. It's not in their interest to default on a loan, regardless of changes in the value of the property.

Sub-prime lending is nearly predatory by definition. They were well aware, as all lenders are, of the financial position of those seeking the loans. The individual loan officers push people into loans without any consideration for the reality of the situation. It's great salesmanship, as most loan officers are paid based on the initial loan, but it's a poor lending practice. No one else, the consumer or the lender, benifits from a loan doomed to foreclosure.

I don't have much sympathy for either side of this debacle, and it's hardly the huge issue that they claim it is. I heard someone on the radio commenting on what percentage of the housing market these loans made up, and it is very, very, very small. I don't remember the exact number, but I believe it was less than 1%.