This is a situation that has been bubbling up for a few years now. I work for a "major mortgage company" in the payment processing department, and the number of distressed loans (ever seen the terms of a "workout" program? If you can get your shit together by the time it expires, you're in good shape, but if not, you're worse off than you were before...)/foreclosures (sometimes people will just send us the keys to their house in an envelope. No explanation offered, none needed) we've seen has been increasing steadily (and dramatically) for at least the last two years. It's cut across regions and (apparent) income levels too.
I've seen the promotional literature for some of these ARMs, and they're all predicated on taking out loans with a built-in/guaranteed "bite in the butt" at some future point and avoiding that bite by either reselling the property at an appreciated value in a few years, or else having personal income that undergoes a healthy rise over time. In other words, "the bubble is going to last forever, so dive in!" Well, guess what?
Like most things "financial", the strong(est) will survive, like they always do. For the rest of us, the name of the game is to get in at the right time and then get out at the right time. Otherwise, you end up giving it all back, and often what you give back is more than you took out in the first place. Not nearly as many people are as financially "strong" as they're led to believe by those who really are strong. It's not loan sharking by any stretch of the imagination, but the net effect is somewhat similar - you take out and take out, and then, BAM, you find yourself unable to pay back and it all goes back, and then some.
I'm sure that there are any number of financial "experts" who will insist that none of this is a ripple-effect from the Outsourcing/Wal-Mart-ization of America, but I remain to be convinced otherwise.
Tip of the iceberg indeed...