Many, if not most, of the homebuyers were middle- and upper-middle-class households operating under the belief that they could make a whole bunch of money flipping houses indefinitely, unaware that, yes, house prices can and will fall.

Wikipedia: Subprime lending

Generally, subprime borrowers will display a range of credit risk characteristics that may include one or more of the following:

• Two or more loan payments paid past 30 days due in the last 12 months, or one or more loan payments paid past 90 days due the last 36 months;
• Judgment, foreclosure, repossession, or non-payment of a loan in the prior 48 months;
• Bankruptcy in the last 7 years;
• Relatively high default probability as evidenced by, for example, a credit bureau risk score (FICO) of less than 620 (depending on the product/collateral), or other bureau or proprietary scores with an equivalent default probability likelihood.

Roland E. Arnall (1939 - March 17, 2008) was a U.S. Ambassador to the Netherlands, named to that post after becoming the billionaire owner of Ameriquest, which was once one of the United States's leading wholesale sub-prime lenders. The company was one of the largest privately held retail mortgage lenders in the United States. In early 2006, the company announced a $325 million settlement with state attorneys general and law enforcement agencies and financial regulators in 49 states and the District of Columbia over allegations of predatory lending practices. Ameriquest faced allegations that, among other things, it misled and overcharged borrowers, and falsified loan applications.^{[citation needed]}