Of course, falling house prices make things harder because you can't sell or refinance your way to stability. But unless you just suddenly lost your job--in which case, you probably can't be helped by a workout, because you don't have any income--then it's not reasonable to say that all the information was on the banking side. People knew a lot. They just chose not to think about it.
Bob Altemeyer says the way to neutralize an authority is to have a competing authority. People get confused and give up. There were lots of people confusing the issue, declaring that the situation was simply too complicated to understand. For every Krugman who warned that ARMs were dangerous there was a Megan McArdle claiming that bankers managed risk better than ever before, computer modeling made loans safer, and Greenspan knew exactly what he was doing.
And now she wants to claim that it's all the homeowner's fault, so they won't question her bad advice.
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