A Needless Housing Collapse
"The success of a pioneering program for moderate-income buyers proves that the subprime disaster was not the fault of homeowners...The answer, quite simply, is that borrowers who had fixed-rate loans without hidden costs were far likelier to hold on to their homes. Subprime borrowers with adjustable-rate mortgages have cumulatively faced a "serious delinquency" rate approaching 40 percent, meaning that four out of 10 borrowers ended up at least three months late on their mortgages. From there, it's usually very hard for them to avoid foreclosure. By contrast, only 8.5 percent of Self-Help borrowers -- in the same cities and with the same financial profiles -- have fallen into such deep trouble, and fewer than 5 percent have ended up losing their homes to foreclosure."
The article is by Alyssa Katz, whose book Our Lot: How Real Estate Came to Own Us is the best thing I've read on the housing crisis. Here she talks about a program that shows how it was the terms of the mortgages that doomed so many people to foreclosure.