I found this information at www.the balance.com
This was in the USA but something very similar happened here in England.
The first sign that the economy was in trouble was in 2006 when house prices started to drop. Realtors - estate agents in this country - (people that help you buy and sell houses) applauded at first. They thought that the over-inflated house market would go back to a sustainable level.
The estate agents didn't realise that there were too many homeowners with questionable credit. Banks allowed people to take out loans 100 percent or more of the value of their new homes! Many people in the USA blamed the Community Reinvestment Act. This act encourages the banks to lend money to people who did not earn much.
I think that all this means that the banks were being irresponsible and not thinking about who could pay back the money and who couldn't. Lots of people couldn't afford to repay the banks so they had to sell their houses for less money than they paid for it.
What do you think about this?