I feel no pain for people who were just trying to grab a quick buck speculating.  I toured my first flipper blow up on sunday.  I can see it from my office.  The debt is now $3.6 million and it's to go on the courthouse steps shortly.  It's an ok house right on the ocean, but waaaaaaaaaaay over valued in my opinion.  Some a-hole bet on the come, over leveraged and will now lose whatever he/she invested in the project along with the ding dong that loaned him/her money.  

I do feel bad for marginal buyers who were conned into buying houses they couldn't really afford at real interest rates.  Those teaser rates to con people out of their down payment or closing cost fees are criminal.  perhaps we should ban any loan to a homeowner without a fixed interest of at least 5 years??
And 100% loans to owner occupied units should only come from govt agencies such that buyers get as much slack as possible to recover from income hiccups.