9 Reasons Why a Housing Bubble Exits

Here is reason number 3 according to this article.

3 - Lenders have been allowing riskier borrows to enter into this market in a big way. The so-called sub-prime applicants, the ones whose creditworthiness would in less speculative times be more closely scrutinized have been lured by, and this is how the Mortgage Bankers Association refers to it, "innovative" financing. These lower standards increase the risk of default at a time when the nation's bankruptcy laws are about to change.