[nomadking]

Because people were pressured by governments and the media, to make easy money by buying houses which they couldn't afford. So, when rather than if(or so they were told) the price increased they could sell it for a large profit and therefore cover any debts. The Banks etc lent money on the basis that if any individual borrower got into problems, the price increase could cover the bank's money. They didn't take into account what would happen when too many people got into problems and therefore there were more properties for sale, but less people able to buy them.