It seems popular to ignore the balloon payment (usury, loan sharking) that actually sparked this. People were able to afford their loans before the balloon payments went into effect. Senator Orrin Hatch at one point pointed out that it had nothing to do with risk to have a payment balloon after someone pays on time for several years. It should go down. People could and did afford their sane payments.
And yes, it's their own fault for sitting in a room and closing the deal with professionals in that specific sector on the other side of the table, with billions of dollars invested in additional profiteering.
When I closed on my house I had to sign a piece of paper written in spanish (I'm told it was saying I could understand the English documents). I had a choice of not signing the document I couldn't read (my last name is Spanish, not my primary language) it or losing the house. People make stupid decisions, but we got our house.
A lot of average families signed stupid contracts put into place by professionals, lawyers and bankers sitting on the other side of the table who then made a whole market based ont he balloon (loan shark) payments.
But the fact is, they were able to pay on time until the loan shark portion kicked in. And did for years. And it had nothing to do with risk.